What Your Clients Aren’t Telling You
Here are seven things your client isn’t telling you:
You do good work for my company. You haven’t done enough to help me personally. In fact, you’ve never even asked me about my individual concerns or goals.
You haven’t brought me a new idea in a very long time.
It is critically important for me to prove my business acumen when I’m working within my company. And you perform your work with attention to the legal issues rather than the business implications of your legal work.
You don’t know my industry, and you don’t participate in it.
You don’t know enough about my company and you haven’t taken pains to learn about it.
I don’t like how you handle fees. I don’t like your communications around fees, I don’t like the way you bill, I don’t like the fact that I have to ask for a non-traditional fee structure. You should be bringing that to me.
Your customer service is indifferent…but you clearly think it is excellent.
For a decade out of college, I did what I do now for a living…I spoke with potential clients all day, every day. Not about the quality of the work of their current firm, generally speaking, but about their satisfaction level, which incorporates quality and wide variety of other factors. I track client opinions closely and gauge their potential timeline to fire their current firm and hire another firm.
I realized three critically important elements of this process way back in my 20s. First, opinions change. A lot. They change over the years, but they also change from day to day. My first boss used to say “every client is one bad day away from being a former client.” And he was right.
Second, potential clients will reveal critical information to me long before they share that information with their current firm. A few years ago, I spoke with the key decision maker of a very large, long-time tax client, just outside of the Fortune 100. She casually dropped into the conversation that she was leaving the company within six months and the partner didn’t know her replacement. Her replacement had been named…and he was a former partner from another law firm. I’ve had potential clients tell me that they liked their firm so much, they could increase their fees dramatically and they would still be happy.
What partner wouldn’t appreciate that information?
The practical result is that I would know a client was about to switch firms months before their current firm knew. And this advance warning is invaluable. We could perform relationship building activities at a time when the other firm wouldn’t realize that they needed to do so, thereby gaining relationship advantage. And even if the client didn’t switch, inside knowledge on the relationship is still invaluable to improve the relationship.
At one time, I reported to the Vice Chair of a Big Four accounting firm. I ran new client development for about 1/3rd of that firm. The first duty assigned by my new boss was to perform post-mortem interviews of 120 publicly-traded audit clients that had fired us over the past two years. When a public audit client terminates their accountants, it is embarrassingly public. They file an 8-k with the SEC noting the termination and identifying the new firm.
So not only did we know how many times we had been fired, we also knew that our competitors had been fired far less frequently than our firm. To get to the bottom of this, I spoke with almost all of the former clients and their former partners. The discrepancy between the reasoning of the clients and our partners was extraordinary, and resulted in meaningful, significant changes in our firm.
During the fifteen years comprising those activities, I compiled a list of 140 separate elements that clients didn’t share but influenced their decisions to seek different firms, or at least an improved relationship with their existing firm. I captured those elements elsewhere in this blog: https://www.clientsciences.com/63strategies/blog-post-four-4dhfh
Along the way, I had some interesting experiences:
- A client told me that if we didn’t get rid of their partner – a former Chair of the firm – and replace him with the younger partner serving the account, they would fire us within six months.
- A new client received some bad tax advice from another firm. The client fired them on the spot when their former tax partner told them “you should have known better.”
- A large, privately-owned client worth $3.5 million in annual fees was owned by a very prominent Midwestern family. They asked us for a meeting. For 45 minutes, they recounted a very long list of everything we had done to offend them over the prior decade. For example, our industry group leader made a public pronouncement that caused their cost of borrowing to go up 75 basis points. We demonstrated extreme cultural insensitivity when we replaced the partner on the client. And our partners had demonstrated indifferent client service throughout the term of the relationship. We had one saving grace: we were their largest single client, which our CEO reminded them. And they fired us anyway. As they should have.
- A competitor didn’t get a $2 million IP litigation, though they performed the underlying work. Why? They offended the client by expecting the work and not asking for it.
- A competitor lost a $3 million patent licensing assignment to us. The competing firm had contacted the client about the work, strategized it…and inexplicably stopped calling.
- On a number of occasions, we engaged clients because their firms failed to challenge their internally-developed strategies.
- I once noticed that clients of a specific competitor were experiencing pervasive quality issues with their law firm.
- In another series of calls, a law firm decided to inexplicably pull back from a client group that was not particularly lucrative. That’s nominally understandable, given that their attorneys were overextended. Unfortunately, this group of clients were responsible for much larger fees later in their lifecycle.
- And finally, there are numerous clients who are on the verge of firing their law firms because one toxic attorney, not central to the client, is threatening the entire relationship.
One could fill a book with the critical information clients keep to themselves until it is too late. There is much that clients choose not to share with their lawyers.
One solution: partners are fundamentally client account managers. Most businesses have client contact individuals independent of the service team, whose sole reason for existence is to be active listeners and manage the account, sensitive to the changes and developments that occur at clients. These developments can have long-lasting, and potentially damaging consequences.
I’ll leave you with one final thought. When I perform a client feedback interview or a post-mortem on a lost client or prospective client, the last question I like to ask is this:
“If you could tell our firm’s managing partner just one thing…what would you tell them?”
My favorite answer: “I would tell her that your competition is calling on me every day. And I don’t mean four days a week.”
James J. Stapleton is the Managing Principal of Client Sciences. Mr. Stapleton spent several decades building multiple AmLaw 100 law firms and large accounting firms including PwC and Arthur Andersen, during which time he managed over 7,500 transitions between law firms on behalf of clients.
Client Sciences works with clients to reduce legal fees, optimize relationships with your law firms and streamline your internal legal processes. Mr. Stapleton can be reached at 408.440.7660 or via e-mail at: james.stapleton@clientsciences.com.
