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Legal Practice Management

Forum magazine: Boosting law firm business development by turning key clients into strategic accounts

· 8 minute read

· 8 minute read

In the recent Forum, we see that all clients aren't created equal & don't have the same strategic value to the firm, making it vital to focus on key client

All law firms deliver great service to their clients. Most have key accounts – those clients designated for special attention. But very few law firms focus with the proper precision on the small percentage of clients that are truly the foundation of the firms’ future, which is to say strategic.

To put it bluntly: All clients are not created equal. They do not all have the same strategic value to the firm, and not all of them merit the highest level of attention. In light of chronic flat revenue growth and pressure on profit that characterizes much of today’s legal profession, we recommend that law firms do the difficult work of identifying the small number of truly strategic clients, and then go all in on them with an unprecedented investment of resources, focus, and devotion.

We are, in short, calling for law firms to deploy formal, contemporary Strategic Account Management (SAM), which has proven so successful over the last 60 years in the traditional commercial world outside of law firms.

We advocate for a delineated, new (at least for law firms), comprehensive approach, which we call SAM-Legal, and which consists of four primary components: Plan, Select, Implement, and Sustain, with numerous sub-steps to support each of these components. For our purposes in this article, we focus on just one of these components, the Selection of clients for inclusion in a SAM-Legal program.

Before even considering which specific clients might be included in a SAM-Legal program, we recommend spending a good deal of time establishing – essentially in a vacuum – the criteria by which decisions about final selection of SAM-Legal clients will be made. This discipline ensures an orderliness and uniformity to the selection process over the long term and insulates the program from firm politics or ad hoc-ism.

Each law firm is different, so no one set of guidelines will suffice, however firms should consider clients that:

      • Are of great potential economic value to the firm – Many firms first evaluate their top revenue-producing clients, and that’s a reasonable place to start. While midsize or even high-potential small clients have an upside, perhaps a phenomenal upside, most firms elect to focus on those that currently generate the most revenue. Beyond the big dollars that top clients offer, it’s important also to consider wallet share. Perhaps the firm already has a large percentage of the client’s legal spend, which may indicate that there is not sufficient upside to justify the client’s inclusion in SAM-Legal. Conversely, while some clients may represent big revenue for a firm, the firm still may have accessed only a small percentage of the potential revenue, meaning that this client may be a prime candidate for the program.
      • Have proven over time to be not just a source of significant revenue, but, importantly, profitable revenue – No matter how significant the revenue, the ultimate measure by which the owners of the law firm are compensated is profit. Unless there are significant reasons to consider otherwise, SAM-Legal initiatives should be directed to clients that are consistently profitable beyond the norm of the client base as a whole.
      • Engage only one or a few of the firm’s practice areas, industry teams or geographies – Most law firm marketing and management professionals are aware of the technique known as white-space/green-space analysis. At its simplest, this analysis takes the form of a spreadsheet where across the top a firm lists its practice areas, industry offerings, discrete products, geographies, etc. Down the first column appear the names of clients. In spreadsheet cells, the firm indicates (perhaps with a check mark) the practice areas, industry offerings, products, and geographies currently provided to the client. What’s left are the white spaces that might be opportunities for the firm. Upon analysis, a firm will determine that some of the most promising of these white spaces, where opportunity realistically exists, should be marked as green spaces. The more green spaces, the better candidate the client is for inclusion in a SAM-Legal initiative.
      • Represent strong existing relationships between law firm professionals and high-level client professionals – No matter how strong and enduring the relationships between the law firm and the client are now, there is almost always room for improvement and further growth. A foundation of strong relationships and client service excellence only enhances the chances of SAM-Legal taking the client to the next level. Conversely, those relationships that are not strong and perhaps even strained may provide opportunity. For such clients, firms need to consider if and how SAM-Legal intervention can improve the trajectory.
      • Are served by the right leader and lawyers – Despite a client having all the right coordinates for inclusion in a SAM-Legal program, it is critical to evaluate the skills and experience of the lawyers and professional staff who would lead a SAM-Legal program geared to a specific client. Some great lawyers who are highly valued by the client may simply not have the requisite leadership, people skills, time, or inclination to lead SAM-Legal. We encourage you to do your utmost to select not just the right clients for SAM-Legal, but also the right leaders within your firm.
      • Appear, at least at first, to possess a willingness to consider a deeper, broader, more-integrated, institutional relationship with a single law firm – It’s not just the firm’s SAM-Legal service and leadership team; what about the personalities, leadership skills, and open-mindedness of the key legal buyers at the client? If these individuals do not have the right aptitude and attitude to countenance a SAM-Legal program, it’s a no-go. Remove this client from the consideration list and replace it with a more viable candidate.
      • Represent brands that will dramatically elevate your firm’s own reputation and brand – How great would it be if your firm could bask (at relatively low out-of-pocket cost) in the glow of a client’s premiere brand in which it already has invested significantly? Law firms don’t often include in their thinking intangible considerations such as the market value of client marquee, but they should. Premiere-brand clients have connections, resources, and industry reputations that can significantly enhance your firm’s own trajectory in the marketplace.
      • Are financially sound and principled – Some of a law firm’s most lucrative clients are those that are troubled, either financially, legally, or reputationally. Despite the big bucks in play, such clients may not be the best choice for including in a SAM-Legal program. After all, we’re talking about a long-term strategic relationship, which would render the client’s operational, ethical, and financial soundness a key consideration for inclusion as a SAM-Legal client.
      • Will encourage the growth of engagement with your firm – Some clients are very specific about the type and amount of work they send to an outside firm. Because of this, not all great clients with needs that a firm theoretically could address are suitable for inclusion in a SAM-Legal program. Find the ones that have both the needs that your firm can address and will not limit the arenas in which your firm can serve.

A Few Final Considerations

We have pointed to several potential criteria for evaluating your firm’s client base to determine how to best identify potential SAM-Legal clients. Frankly, though, ours is an outsiders’ view. You know your firm and its clients best. Use some or all of the considerations that we have identified to create your own list.

The point here is that these or similar criteria be identified in advance to ensure that your SAM-Legal selection process is orderly and uniform in a way that will reduce the influence of internal politics or ad hoc solutions. Of course, additional nuance and negotiations will be in order, but using criteria such as this will mean that as you begin the selection process in earnest, the heavy lifting will have been accomplished.

This article was written by Silvia L. Coulter & Steve Bell, and originally appeared in the Spring 2020 issue of Forum magazine. This article is excerpted from the authors’ forthcoming book SAM Legal: From Key Clients to Strategic Accounts, available through Amazon and on the LawVision website in Summer 2020.