If lawyers hope to deliver practical, commercial legal advice to their clients, they need to understand their clients’ businesses and the unique challenges they face
As some parts of the world begin to emerge from the 18-month pandemic era, one which swung from crisis to doldrums and back to crisis at times, it is becoming clear that many clients are looking forward to moving their business into whatever version of normal we will now experience.
Thus, it is even more important now for outside counsel to understand their clients’ businesses and the unique challenges clients’ face in today’s environment if they hope to deliver practical, commercial legal advice.
Already, clients’ corporate law departments have a huge range of challenges and strategic priorities, each with a combination that is unique to their businesses, their markets, and their geographic locations. The main broad areas of focus for law departments in the coming 12 months are likely to be:
- safeguarding the business in an ever-changing world;
- partnering with the business and demonstrating value;
- making the best use of its in-house talent and outside resources; and
- (of course) doing more with less.
When asked what they think their client’s most common priorities are, lawyers on the whole showed a good understanding — the areas they cited were very similar to the list put forward by clients. However, there were some differences, mostly in the weight and importance one side or the other placed on certain priorities.
For example, outside lawyers tended to overstate the importance of such areas as cost reduction and diversity, equity & inclusion. And while these topics likely come up quite often in lawyer-client conversations — as they are among those items that are more relevant to on-going matters and are areas in which clients commonly think their law firms could and should be supporting them — these areas weren’t highlighted in the same way by clients.
Cleary, clients think these items do matter, but in their minds, there are other issues of equal or higher priority.
On the flip side, lawyers tend to under-estimate the importance to clients of more outside challenges, such as increasing government regulation and digitalization. Indeed, our recent research shows that there can be some wide differences in expectations — even when both clients and their outside counsel agree on the importance of a certain priority.
In a recent survey, both clients and their outside lawyers cited an outside law firm’s ability to demonstrate its business savvy as one of the most important factors in a law firm’s value proposition. About 38% of outside lawyers surveyed said this, while just 29% of clients did.
Sometimes, the differences are even more stark. For example, just 16% of outside lawyers said they think their clients see efficiency and resourcing as key to providing value, while clients actually ranked these areas higher by 5 percentage points. Similarly, other areas — like pricing and service delivery — are thought of as much more crucial to a firm’s value by clients, rather than by outside lawyers.
Realigning the expectations of clients and lawyers
How can law firms and their clients move more on the same page on these critical issues?
Lawyers need to be having wider-ranging conversations with their clients in order to recognize the bigger picture around the most critical and pressing issues that clients are facing, especially those issues which may not come up in day-to-day matter-related conversations. This may mean that lawyers have to get out of their comfort zone and begin asking questions that may be outside of their personal expertise.
Undoubtedly, these conversations can be difficult for many lawyers, and too often regular client discussions are put off by the very lawyers who may most need to hear what their clients are saying and where their clients are focusing.
Yet, there are several ways that lawyers can get over the fear of client meetings and avoid pitfalls that could derail client relationships.
First, identify which clients your firm should be talking to. While it initially may make sense to focus on clients that have an impact on the firm’s bottom line — such as the firm’s top 100 clients, clients where revenues have dropped over a three-year period, high-growth potential clients, etc. — remember, you should be seeking client insight that will help the firm align its priorities with clients’ stated priorities. Often happy clients won’t provide the insight a firm needs to make necessary pivots in its service offerings or focus.
Second, make sure you’re conducting enough client conversations to identify key priorities and areas of importance. One of the biggest mistakes that law firms make in client discussions is not speaking to enough clients and allowing insight from just a few clients to skew their list of expected client priorities toward the inclinations of just a few.
Finally, remember that comparative insights are critical. While it definitely can be uncomfortable for lawyers to ask their clients about other legal service firms the client is using, most clients do rely on several providers, often for different work. If your client identifies key priorities that other firms are addressing for the client, find out why that is. Is your firm ready to pivot and address those priorities in order to try to gain back that business?
The old saw of giving clients what they want is as true in law as in any other business. However, smart law firms are those that make sure that the priorities they think clients want addressed, and what clients actually say they want addressed are the same thing.
Check out Thomson Reuters Strategic Insights to find more about client challenges and priorities for law firms and request your free demo today.