Creating a feedback loop between clients and their law firms can provide benefits to both parties, regardless of the nature of the feedback itself
Every law firm wants to hear “Good job!” from their client. Not many, unfortunately, know how to actually receive it. According to the Thomson Reuters Institute’s 2022 State of Small Law Firms report, 83% of respondent firms view client satisfaction to be a key measure of their success, yet only 40% actually said they track client satisfaction metrics.
Tanja Podinic, advisor to corporate legal departments and law firms through her firm Digital Legal Ventures and former Global Director of Innovation Programs at Dentons, says she has seen the same issue from the client side. At one general counsel conference she spoke at in March, she explains, only about one-in-five GCs said law firms approached them for feedback following an unsuccessful panel appointment.
Clearly, feedback is something that law firms require, and corporate legal departments would like to receive better service that could arise from feedback. So where is the disconnect?
Understanding the value
Podinic notes that oftentimes, the onus is on the law firms to initiate feedback mechanisms. But in many cases, before law firms have anything to solicit, legal departments themselves need to think more critically about the value they want their law firms to provide first.
“General Counsel are now expected to be strategic business partners to their organization, they have a key role in helping their organization execute on strategy and meet goals. As a result, GCs would benefit from law firms being their strategic business partners in a similar way.” Podinic says. “In order to place that expectation on law firms however, GCs need to be more open about their business priorities to enable law firms to collaborate and deliver value more effectively. This lack of stakeholder alignment results in missed opportunities for both, law firms and their clients.”
She gave an example of a GC looking to appoint a panel of law firms for their corporate litigation matters. Firms focus on what they think is of value to the client — offering discounted legal fees, use of technology, client secondments, etc.
There is a rarely a conversation to establish what the client would value most, what would result in the greatest impact for the client. The GC may need to deliver internal data privacy and cyber security training, could the law firm offer to do this training as a ‘value add’ in exchange for a slightly lower discount on fees? Alternatively, could a law firm leverage its own legal project management team to assist the GC to roll out an internal operations project more effectively? Such creativity requires transparency from both sides, and this is not the norm.
Feedback is another powerful tool that is often not used for fear of criticism. When engaging in feedback, it’s important to pinpoint exactly what expertise the law firm is expected to provide in a matter — both from the law firm perspective and the corporate perspective. “The thing is most law firms don’t really promote themselves in this particular way because it’s not what they are used to and they fear that the result may be negative,” Podinic adds.
“When you receive feedback and the feedback isn’t necessarily positive, you are almost forced to actually change something that you’re doing in order to be able to be successful in the future, or to actually not lose a client.”
Indeed, Podinic explains that while law firms are often asked to be proactive in asking for feedback from their clients, there’s nothing stopping legal departments or general counsel from providing feedback themselves and speaking more clearly about what they desire out of an engagement.
“More beneficial for the GC would be: We complete a really big matter, let’s do a quick assessment of how the law firm did. Whether or not they met our requirements, how were they to deal with? Were they pleasant or did they respond in a timely fashion? These are really basic metrics that can influence whether or not that particular firm is reappointed.”
The benefits of an open conversation
The mutual benefit to both parties is knowing exactly where the relationship stands. If the client experience was a positive one, then both sides will want that to continue. On the other hand, negative feedback from a client to law firm can also provide a necessary impetus for change, Podinic says.
“A GC is unlikely to remove a firm from their panel based on negative feedback, but it could strongly encourage the client relationship partner to improve the service to the client to ensure the relationship continues.”
“I think this may be one of the reasons why law firms are slow to change, there’s no formal feedback loop.”
A formal feedback loop doesn’t necessarily mean a data-heavy feedback loop, although that can certainly be part of the ultimate plan. Podinic notes, however, that especially for law firms first initiating feedback with a particular client, it’s near impossible to develop key performance indicators (KPIs) because the firm doesn’t understand that value the client wants them to bring. As a result, she cautions: “Let’s start small and then get to the specific metrics and the detailed data later.”
And the other key suggestion that Podinic had for beginning a feedback conversation: Be brave.
“Law firms, particularly partners have a hesitancy to ask difficult questions of GCs, and understandably so, they’ve likely fostered this relationship for many years,” she says. “But I think the reality is that open and honest conversations will lead to more satisfied clients, who will retain their existing law firm relationships.”
Reticent law firms may just find their clients are more receptive to having the conversation than they might have believed.
“I don’t think many GCs would make decisions to remove firms from their panel as a result of negative feedback,’” Podinic adds. “It’s less about disruption, and more about stakeholder alignment. Law firms need to get comfortable with the idea that being a client’s strategic business partner may mean they need to change how (and in some cases what) they deliver to their clients. The key is to support clients to achieve their priorities and goals as a business. At the same point in time, GCs also need to be open to this shift. Creativity and transparency, along with meaningful collaboration could unlock value for both, clients, and law firms.”