Commercial lawyers “are failing to understand their clients”, reports survey

Money worries: fees are more important to clients than lawyers realise

A sizeable slice of corporate lawyers is misunderstanding the fundamental drivers of client satisfaction, according to new research which also found that less than a fifth of general counsel have final choice over selecting external legal advisers. 

The survey, conducted by the Financial Times and the Managing Partners Forum (MPF), quizzed clients and legal advisers about a host of issues regarding their business relations. What emerged was significant discrepancies between what clients want from a law firm and what a law firm believes its clients want 

Simon Lord, head of B2B marketing at the Financial Times, said clients are looking for “deeper, more strategic conversations” and law firms “could do more” to understand the nature of each client’s business. 

Sir Nigel Knowles, MPF chairman and joint CEO of law firm DLA Piper, added: “This survey is a clear call to arms to management across all professional firms to get to know their equivalent at clients as part of a leadership strategy to shape the overall client experience.” 

When asked for the three most important attributes when judging the health of a law firm-client relationship, the ability to solve problems quickly was by far the most popular from clients (54% of respondents). In contrast, it was the fifth most selected option by external lawyers, with just 34% making the selection (see table). 

The most important attributes for a healthy law firm-client relationship

 ClientLaw firm
 1The ability to solve problems quicklyKnowledge of client’s business needs
 2Knowledge of client’s business needsFrequent communication
 3TrustConsistency in meeting client expectations
 4Frequent communicationTrust
 5Transparency and opennessThe ability to solve problems quickly

Similar levels of divided opinion were found when the respondents were asked for the three most important attributes when selecting a law firm for complex matters. Specialist legal expertise was selected the most times by the vast majority of lawyers (68%). Expertise was also chosen the most by clients, although only by 45%, narrowly ahead of “understanding of our industry” with 42%. 

Fees was one particular area of divergence in complex matters. While over a quarter of clients deem competitive pricing (28%) and transparency of fees structure important (26%), that figure fell to 15% and 11% respectively for lawyers, indicating that the message over the costs of external legal services is not getting through fully. 

When it comes to commoditised work though, reliance from law firms on cheaper rates was evident. Almost three-quarters (73%) of lawyers gave competitive pricing as a reason to be instructed. compared to 56% of clients. Over a fifth of law firms even gave a strong brand as a factor, while just 7% of clients said that reputation had any bearing. 

The research also provided insight into the law firm selection process and outsourcing. Despite the prevalence of panel reviews, only 19% of general counsel have primary responsibility for selecting a law firm. The chief executive holds the ultimate power, with 54% having the final say over instructing external counsel. 

Despite the rise of legal process outsourcing, neither clients nor lawyers are enthusiastic about it. Only 15% of clients and 18% of lawyers believed that outsourcing would benefit the relationship, against 36% of clients and 30% of lawyers who said it would not. 

The findings come as the UK’s top 100 law firms look set to shake off a turbulent few years with modest increases in fee income for the last financial year. The market is expected to see a growth of 3.9% for the year ended 30 April 2011, according to Deloitte.

    Readers Comments

  • I find that many firms know they need to get better at managing the customer experience but often struggle with the “how” to do it. Many firms could benefit hugely from just asking customers what they think. This may be simple and basic but with out doing this, as firms start to invest heavily in marketing, they could waste good money.

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