Skip to content
Legal Practice Management

How does a lawyer’s business understanding add value for clients?

Lizzy Duffy  Global Head of Client Services for Thomson Reuters Acritas

Lizzy Duffy  Global Head of Client Services for Thomson Reuters Acritas

Clients most often cite their lawyers' ability to understand their business as the number one way that law firms can increase their value in clients' eyes

Business understanding is a critical factor in the client-law firm relationship. It is something that clients consider to be a hallmark of their best relationships with law firms, and it creates distinction for the (few) firms that do it well across the board, leading to higher rates (via less price sensitivity).

Not surprisingly, understanding their business is cited by clients and lawyers as the number one way to increase a firm’s value in the eyes of clients.

It makes sense. When lawyers have an in-depth knowledge of clients’ business, they can be more proactive in advising those clients of upcoming risks because lawyers then know what to look for. They also can provide tailor-made solutions for that client, based on its business and industry, and give recommendations that support the business goals as well as address any legal context.

Indeed, the advice lawyers can deliver in these cases already is in a business-ready format — clear language, concisely put, and immediately understood by stakeholders across the business without the client having to translate.

clients

Yet, there continues to be a gap between clients’ expectations of their lawyers’ business understanding and the reality of working with their law firms. Of course, some lawyers do an extremely good job of conveying their business understanding — they are natural at it — for others it is a discipline that can be learned.

Why is this? Well, there are several reasons.

1. Admitting what you don’t know

First, lawyers are not comfortable admitting they don’t already know something. Because lawyers are often regarded (by themselves and others) as the “expert” in the room, they are not comfortable showing any weakness.

For example, a partner I coached a few years ago (and who was actually very good at getting to know his clients’ businesses) was in a tricky spot with a long-time Agribusiness client. He had never been to visit the client’s site and felt that so much time had passed it would look bad to ask now. He told me that he felt so awkward, he couldn’t ask.

Although his feelings were understandable (I mean, we’ve all been there), we needed to get creative and frame the request around a new associate on the team who was eager to learn. By framing the request as the new team member wanted to visit the client’s site, the partner was able to tag along and finally visit the client’s site, minus the awkwardness. As a bonus, the associate on the team was now building a relationship with the client, too.

This situation demonstrates how lawyers are skilled in asking questions to elicit a certain response and trained to ask questions to which they know the answers. Yet, when it comes to business understanding, knowing it and showing it are two very different things. To demonstrate good understanding of the client’s business, lawyers need to ask questions to which they don’t yet know the answers.

2. Spending the time to build relationships

Second, partners are rarely incentivized to spend time off the clock learning a client’s business, even when their firm cites this as a top priority. Against the high targets of achieving hours and rates, doing the day-to-day work will naturally take precedence over the extra relationship stuff.

Until this mindset changes and firms enable their lawyers to make relationship-building a priority and lawyers are held accountable for time spent building relationships and learning the client’s business, this dynamic unfortunately will not change.

3. “What do you mean, I’m not a good listener? I talk to my clients every day!”

And third, lawyers aren’t very good listeners. Across all the examples that corporate general counsel gave of areas where their lawyers could do better at understanding their business, what stood out clearly is the importance of listening. In fact, as one client asserted, “Not listening to respond, but listening to learn.”

When I coach lawyers and business professionals on how to best conduct client feedback interviews, the golden rule is to focus on active listening, which is being completely focused on taking in what the other person is saying. It’s not about showing off your own knowledge of the subject. I recommend an 80/20 rule so that you only get to talk for 20% of time and you actively listen for 80%.

Here’s a few ways to wisely use that 20% of talking time you have in a formal client conversation to focus solely on active listening for the other 80%.

Prepare: Reduce the risk of rambling by preparing a short, clear introduction to the meeting that recaps the purpose of the meeting. And come prepared with a short set of questions that will structure the conversation.

Do your homework: Don’t ask the client to tell you facts that can be found on the company website or other publicly available sources — this appears lazy. However, it is critical to use that information to springboard into more substantive questions.

Use open-ended questions: The best way to reduce the time that you are talking and encourage the client to share more is to use open-ended questions, such as:

      • How would you describe your legal strategy?
      • Where do you see the greatest competitive threat for your business over the next three years?
      • What expectations does your Board have of the company’s legal department?

Stop talking: It’s easy to fall into the habit of asking an open question and then immediately filling the silence with your projected possible answers for example:

“What are the strategic goals for the business over the next three years? …Is it just to grow, is it to close the deal in Asia, return to normal — I suppose no one really knows when that will be, right?”

Here, you should stop talking once you reach the first question mark.

Ask follow-up questions: To make sure you understand the full picture and demonstrate that you are listening and understanding, ask follow-up questions, such as: “How does that impact you in your role?”

Get comfortable with a little silence: It can take clients a few seconds to digest a question that’s been posed, and collect their thoughts before they answer. This is a good thing, and you shouldn’t trample over the thought process with extra words.

In conclusion, while law firms can always find more costs to cut and efficiencies to be gained, the number one way they can increase their value to clients lies in getting and staying close to clients’ businesses in order to deliver more strategic advice.

That is something every individual lawyer can do in their own client relationships and the added value to the lawyer, the firm and especially to clients is priceless.


For more on measuring and tracking brands and market trends in the global legal sector, visit Sharplegal, now part of Thomson Reuters.

More insights