PwC is out to steal your clients. They just told you so.
PwC, through its legal arm, ILC Legal, has formally announced its intentions to open its US office. ILC indicated it will “wait to see how the market reacts” to decide its future plans—we interpret this comment to mean: How many clients can they sign up and how fast?
And, by extension, the remaining 3 of the Big 4 accounting firms can’t be far behind.
This is more than a wake up call or point of observation—it is a rare defining moment. This is also the kick in the pants any organization would see as a screaming voice for change. The nature of competition has changed. Law firms will be competing against a new beast who has already been through the changes law firms need to make to be winners.
The Big 4 accounting firms faced the same issues as law firms face today—about 30 years ago. At the time, I spent a decade working for PwC predecessor firm Coopers & Lybrand and helped to implement their changes to make client service the top priority, rivaled only by business development. This included training in business development and working across practices and offices, selling multiple services to a single client, going to market by industry, segregating high priority pursuits from others and using partners with skills to land these prized clients, and harnessing the power of finding the right partners at the right time to win big-time work.
They figured it all out and haven’t looked back since.
The last time BTI measured (by interviewing more than 300 CFOs, CAOs, and other top financial executives a few years ago) we found:
- PwC has the best client service of the Big 4
- 58% of clients recommend PwC to a peer (the highest of the Big 4); for comparison – only 31% of clients recommend their primary law firm to a peer
- PwC has a highly developed business development process designed to identify the strategic nature of potential clients, locate the right partners in terms of chemistry, industry and skills, and talk business issues to win big, sophisticated clients
- Clients report PwC partners work collaboratively across the globe; clients say the majority of law firms don’t work collaboratively within their own firms
- PwC was the first to develop the paperless audit—inventing new ways to use technology
- PwC’s thought leadership is considered to be one of the gold standards
- PwC plays hard and plays to win big
All of this is already built into the fabric of ILC Legal and will change the business development and client service rules in the legal industry.
The best clients will be the first to go on ILC’s target list. And your new competitor(s) will be playing by different rules. The most dangerous part will be in how this all plays out. No client will hand over all their work to ILC. The shift will unfold one assignment at a time and be hard to notice until it’s too late.
But, every law firm can still take steps to protect their clients and make it harder for ILC, or anyone else, to encroach on and poach your clients. Here is what we recommend you do about it, now:
Develop a Meaningful Client Retention Plan
Identify what the firm would do if you learned a client was thinking of shifting work elsewhere. Who would lead the charge? Exactly what steps would you take? The steps include intense client feedback, coaching from top rainmakers and consultants, changes in the team, adopting client service standards for these mega clients who might be defecting, forming a dedicated client team and meeting quarterly to discuss progress internally, and talking to clients semiannually to check progress. The sooner you start taking the steps, the less likely your clients will defect.
Get Deep, Meaningful Client Feedback
Not client satisfaction feedback, but performance feedback—and, the type of feedback which reveals how your clients want you to perform. Clients view performance improvement as equal to/or more important than understanding their goals—because if you can’t improve, you can’t meet their goals. And, they will never be satisfied.
The winning firms are getting feedback from their:
- Largest and most important clients
- Large clients where you do only a limited amount of work
- Large clients (as measured by client revenue) where your fees have flat lined or declined
- Clients where they have a new GC
Implement Your Client Teams Now
Dedicate your most skilled and high potential resources to care for, look after and grow client relationships on a long-term basis well beyond the current case. Make the leaders accountable for a robust business development plan and give them the budget they need to keep your clients for years, if not decades.
Train Partners in Business Development and Client Service
Most partners in law firms readily admit business development is their biggest weakness. And you can’t develop business without superior client service. The Big 4 are decades ahead of law firms in establishing business development and client service cultures. The firms unable to beat the Big 4 back with superior client service and business development are already at a disadvantage.
You can start changing now—and see business development skills, and client service soar in less than a year with the right training.
While there is more you can do, the steps above are game changers for most law firms. Follow these recommendations with the same zeal as you track and bill time and you will be ready for battle with any firm—Big 4 affiliate or not.
You battle the Big 4 (and other law firms) on the client-facing front lines of competition. The law firms who make the investments now and build these skills into their culture will leave all others behind—some far behind. Few industries get a wake-up call announcing one of the final chances to change is upon them. No firm serving medium to large clients is immune.
BTI has successfully helped our clients work through and accelerate the pace of change and improvement—at the Big 4 Accounting Firms as well as the law firms wanting to keep pace and even move ahead. We can help you with any or all of these recommendations—I welcome your call to discuss what this would look like for you and your firm. Reach me at firstname.lastname@example.org.