60% of large clients have replaced one of their 2 primary law firms—the highest turnover rate in 7 years. The overwhelming reason—mediocre client service. The scary part—the client service isn’t bad—it’s just not great.
Corporate counsel show shrinking patience for anything short of a superior client experience. Clients now believe even average client service costs them money and time—the 2 things corporate counsel have little of.
Few if any of these new primary law firms gained their spots through RFPs. Almost all built their position starting as a secondary firm with smaller but substantive issues. As these law firms moved into a primary position, these firms then engaged in 2 driving activities simultaneously:
- Delivering superior client service
- Actively developing larger swaths of business
Superior Client Service Is Your License for More Business
Virtually each and every one of these firms moving successfully into a primary position had a clear plan. They would cultivate new business while continually making big gains in their client service performance. Too many firms focus on one to the exclusion of the other.
Many firms believe their business development prowess will win the business. A few firms believe superior client service alone will win the business. The reality is—even the firms with the best client service also need to pursue new business.
Client service is a license to get new business but is not necessarily an entitlement. The lesson: back up your superior client service with a plan to get new business.
The spike in primary firm turnover is a warning bell. No law firm is safe or immune. Every firm planning on a robust future is compelled to protect their client base and then figure out how to turn their secondary relationships into primary relationships. Again, these are not RFP driven. These are the relationships we develop. Your partners will play a big role whether they want to or not. The first steps to protecting and then gaining primary relationships:
- Conduct in-depth client feedback on a large enough scale to cover your top primary and secondary relationships. Acquire client feedback for those clients you need to keep. You will learn where you are strong and where you are at the most risk. You also will learn what it takes to keep these clients.
- Provide training in advanced business development skills. Building and keeping primary relationships is not for newbies and partners who don’t like developing business. This is deadly business. Train only those who can and want to develop clients. And give them the authority to make it happen.
- Form client teams, develop a plan, and train the team. This training is more focused on how to work as a team. Unleash the team on individual clients—and give the team a budget.
- Measure and track client retention for the firm’s largest clients on a year-over-year basis. Set a goal, a number-based goal, to improve retention and include it in partner goals.
59% of the new primary firms are from outside the Am Law 50 while 41% are in the Am Law 50. Both the largest firms and the more midsized firms are feeling equal impact—and neither is a runaway winner.
Clients are shopping for client service. BTI research reveals most of the firms moving into the new primary roles are the same firms who have been gaining market share for several years in a row. These firms have a more developed formula for both keeping their existing clients and gaining new ones.
Large Clients Are Markets of One
Each client you want to keep has now officially become a stand-alone market or market of one. Securing a new primary spot demands a focused plan, elegant execution and the resources to make it happen. With virtually no new growth in outside counsel spending, each primary relationship you gain is coming as another firm’s expense. Much like in Monopoly, the firms with the most primary relationships win.
MBR