Law Firms Can Learn From Accounting Firms
Q&A with James Stapleton, Chief Business Development and Marketing Office of Dickinson Wright
Studies of the legal services sector reveal what law firm leaders know only too well: Growing revenue is, and will likely continue to be, a significant challenge. The decline in demand has been attributed to factors beyond firms’ control, such as the fallout from the 2008 recession; stagnant or shrinking business sectors and markets; and the loss of clients through mergers, acquisitions and bankruptcy. In response, many companies slashed legal spend and shifted some legal services to offshore firms. Law firms can no longer continue do business as usual.
In comparison, accounting firms faced diminished demand for services years before law firms. They responded by making many changes to their business model. Chief among them were processes that served to “institutionalize” clients — client team/key account programs were essential elements of their survival.
In order to gain an insider’s perspective on what law firms can learn from accounting firms, I spoke to James Stapleton, Chief Marketing Officer of Blank Rome, who migrated to law from the accounting industry. James previously served as the Chief Business Development and Marketing officer of Dickinson Wright and CMO of Littler Mendelson honed his client team expertise at PwC, where he was in charge of several client teams.
Q: What do you see as the difference between client teams at accounting and law firms?
A: Even though they are partnerships, accounting firms are essentially hierarchical and more similar in culture to corporations than law firms. Decisions on policies and procedures are made from the top down. This means that if firm management decides to initiate a client team program, the program is adopted with little debate among the partners. Though key account programs have been utilized by some accounting firms for at least 30 years, the more recent rules governing the audit side of the business accelerated the move to this business model.
In order to ensure the independence of the firm’s audit opinion, accounting firm partners are now required to rotate off of a client every five years. Partner rotation has an added benefit: It promotes institutionalization of clients. Accounting firms now have training and business processes that ensure that clients receive the same level of high-caliber service from everyone who works on its account. Client teams work fairly seamlessly in accounting firms, where there is a high premium on client retention and satisfaction.
Law firms are essentially flat organizations with individual partners wielding significant power and discretion about clients. In many firms, partners can decide whether to opt into a management-initiated program. In law firms, the client and its billings are controlled by the individual partners rather than the firm. This model produces little incentive to introduce new programs. Law firm partners have to first be convinced that client team programs will not endanger their client relationships.
Since so many lawyers are risk-averse, they would rather maintain the status quo, despite evidence showing that they are more likely to increase billings through better knowledge of their client. Client team programs are in the experimental phase in most law firms, except the leading global firms where they have been part of the fabric since about 2000.
Q: Do client teams work?
A: Yes, they maintain and deepen client relationships and increase billings. Client teams also enhance the training and development of associates who are able to see all aspects of the client’s business and how the law firm addresses business, legal and service issues.
Q: What contributes to the success of a client team program?
A: There are several characteristics of successful client team programs:
- Firm leadership is firmly behind the program and clearly understands its benefit.
- The program complements firm culture and is integral to the growth strategies for the firm.
- The team leader is well prepared and trained. Leading a team requires effective communication with all of its members and the management of the flow of information to and from the client. The team members are committed to providing top-notch service and exceeding client expectations.
- When issues arise, they are resolved quickly and not allowed to fester.
- Processes are in place to facilitate the identification of service problems as well as client business and legal issues. Chief among the processes is the systematic collection of client feedback.
- Clients are directly involved in the development of the plans for service and in resolving any service issues.
Q: Why are client feedback programs integral to successful client team programs?
Client feedback programs are essential elements of a client team program. Done right (i.e., scientifically, according to rigorous market research standards and protocols), they provide deep insight into the client relationship, the market and competition. Client feedback programs demonstrate to the client that the firm is seriously invested in the success of the relationship and satisfied with their services.
Client feedback should be a regular part of the firm’s business processes. The larger the client, the more important it is to make sure that the firm is aware of how happy they are with the attorneys assigned to them and the services they receive.
Collecting and analyzing client feedback that can inform strategic business decisions is wholly dependent on the quality of the data itself. Law firms follow different models for eliciting client feedback, ranging from having partners conduct the interviews to engaging outside resources. My preference, based upon my experience with law and accounting firms, is to engage highly trained market research professionals so that you get back objective, analyzable, enterprise-wide and actionable data.
When partners or internal business development staff conduct the client feedback interviews, the situation is rife with firm politics and bias. It is impossible to be a dispassionate researcher when you work side by side with lawyers who are providing the services.
Q: What is the role of the business development team?
A: The firm’s business development team should be an integral part of the client team initiative. They have the resources for mapping client relationships, enhancing internal and client communications and ensuring that all issues are resolved quickly and effectively.
Q: Any last words of advice?
A: Law firms need to internalize the message that the accounting profession heard years ago: Listen to your clients because they will give you the firsthand information you need in order to keep their business and compete in the marketplace. If you are not rooting out issues before they be come real problems, then you are opening the door for your competitors. As you keep hearing, “adapt or become extinct.”