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What Client Surveys Are and Why Law Firms Should Do Them
by Dr. Mark T. Greene, Ph.D.
This article is the first in a three-part series by Mark Greene on client satisfaction research. Next month, Dr. Greene will discuss how these surveys should be conducted. In the third and final installment, he will explore some of the important specific information that the research can produce.
Lots of law firms do them. Very few do them right.
Client satisfaction research seems so simple that one wonders why it’s not a universal practice. Imagine developing new business from existing business and, at the same time, uncovering and solving problems that might be threatening vital client relationships.
Client surveys uncover what clients feel is important in their relationships with outside counsel and how they rate law firm performance. The conclusions are drawn from numeric and open-ended questions and converted into hard statistical data.
As law firms have learned, surveying clients is not a job for amateurs. You can’t simply mail clients a questionnaire and expect to get back useful information, if you get back any information at all.
It’s Not Rocket Science, But It’s Science
The best results are obtained by outside market research consultants who know how to set up phone interviews and extract information from clients. They have developed benchmark data with which to evaluate and interpret client responses to a broad range of questions.
Moreover, outside market research consultants know how to underscore the information they develop in a way that reveals persistent problems in the relationship. Armed with the information, responsible partners follow up with the client to solve problems that have been uncovered or to explore openings for new business that have been revealed.
Client Research: Worth Its Weight in Opportunities
“Too bad they don’t have an environmental practice,” the client may say.
Findings like that often shock lawyers. They’re often appalled to learn just how little even their oldest clients know about them. In addition, firms often are surprised to learn how much business is leaking away to competitors.
You may know your environmental practice is blue chip. Half a dozen clients may know it. But the rest of the world, including the rest of your clients, may be clueless. If nothing else, the client research process underscores the areas in which you now need to do some concerted marketing and PR. Business development, after all, is about market perceptions, not reality.
Research Provides Opportunities to Enhance Relationships
The follow-up conversations that grow out of the client research open the door to discussing client problems that demand solutions. The conversation sends a reassuring message to the client. It creates a greater predisposition to expand the relationship.
Relationship building is what marketing is all about in the professional services. There is no greater return on investment, as a corrective measure to reverse erosion in market share and a proactive measure for increasing market share.
How’em I Doing?
Once upon a time in New York City, former Mayor Edward I. Koch kicked off his first administration into early high gear by adopting a very special tag line. In public appearance after public appearance, Mr. Koch would earnestly search his audience in the eye and exclaim the question, “How am I doing?” It yielded gobs of good press.
Historically, however, law firms have been mighty resistant to doing anything of the kind.
Why Do Law Firms Dread Research?
In the late 1980s, and well into the 1990s, Of Counsel ran annual marketing surveys that quantified law firm marketing activities. Year in and year out, the number of firms that reported formally auditing client satisfaction never exceeded 25 percent of total respondents. Sometimes, the number was as low as 15 percent. These were firms that, since they were bothering to respond to a marketing survey in the first place, presumably had a greater commitment to marketing than many others.
Furthermore, there was no way to tell from the Of Counsel surveys whether the firms that had perennially reported doing client research were doing it right or developing information that was at all useful to them in the long run.
Year in and year out, the best and most respected marketing consultants in the country were begging and cajoling law firms to put client research on their front business development burners. Their blandishments went unheeded, even though they could point to corporate clients that clearly wanted their law firms to formally conduct such research. Indeed, they could quote major legal services purchasers who were explicitly advising that some interview time on the phone with a professional market research would be altogether salutary.
Generally, law firms dreaded the idea of client research even as they saw the wisdom of it. With all the client hoarding that goes on at many firms, satisfaction research was feared to be a political powder keg. Who would do the interviewing? Might the results leave some lawyers feeling exposed to the withering criticism of their partners?
Also, who wants to hear, even if you know you need to hear it, that a client relationship has problems? Most lawyers, being only human, can think of a thousand better ways to spend their time (including billing it) than by asking important clients to detail their shortcomings.
Catalog of Excuses
If individual lawyers were politically and emotionally averse to the challenges of client research, firm managers and law firms as a whole had their institutional excuses as well.
One went something like this: “We already know where our weaknesses are. Why invest time and money to find out what we already know?” The answer to that is twofold. First, you might be surprised! The client survey might well tell you something you don’t know. Equally, if not more, important, client satisfaction research isn’t necessarily supposed to reveal something new. As we’ll explore further in the final article of this series, an abiding purpose of the research is to prioritize your strengths and weaknesses as well as the corrective and opportunistic actions to be taken.
Research Points to Where to Spend Your Time and Dollars
For example, one of the statistical instruments that our research uses charts several attributes in terms of their importance to clients and how important the firm’s attorneys believe that they are to clients. Here, the data may show that certain attributes, such as communications skills and knowledge of the client company, are ranked as highly important by the law firm but less important by the client, or vice versa.
You might know where your weaknesses lie, but where do you want to invest the lion’s share of your corrective energies? Do you want to invest in solving a problem that the client considers marginally important? Or, do you want to invest in solving a problem that the client considers crucially important? Knowing thyself isn’t enough. The research tells you what part of yourself is actually relevant.
Finally, when law firms did venture into doing client research, they generally did it all wrong. We will discuss what they did wrong, and how specifically to do it right, next month. Suffice it to say for now that they followed corporate research models wholly inappropriate to the relationship-based realities of professional services marketing. In the worst cases, they used mass-market research methods that actually damaged their relationships with the clients that they were hoping to help.
For many law firms, client research turned out to be a junk-in-junk-out debacle that discouraged them from ever trying again to do it right. It gave the best marketing tool in town a bad name.
Today’s Imperative
Today, the client-research process has finally caught on because law firms are realizing that they have no choice. It has finally dawned on them how much money they’re leaving on the table, on a per-client basis.
As a competitive marketplace consolidates, the realization has been forced on them that, while they may have once rejoiced in a $5 million per annum client engagement, that $5 million represented, say, a mere 20 percent of the client’s total legal budget. Ever-bigger competitor firms were sharing the remaining 80 percent and, sooner or later, were gobbling up the $5 million stake as well.
Today, law firms will continue to leave significant amounts of money on the table if they can’t answer these questions:
• What legal work is being done by outside counsel?
• Who’s doing it?
• How satisfied is the client with the service provided by its current firms?
• What is the firm’s image with respect to these services?
• How should we address this opportunity (if at all)?
The firms that are in the worst trouble are the ones that typically have handy excuses for each decline in client share. For example, a major litigation ends, and so the firm assumes that there just isn’t any more work to do. Watch carefully for this danger sign when you listen to your responsible partners and practice group heads discuss their books of business.
Law firms that attribute declines in client share to “natural work cycles” or to the happenstance of particular cases or deals are the ones that most need to pursue formal client satisfaction research simply as a matter of survival. Their clients are in danger of just fading away.
The awful problem for such firms is that there is no moment of crisis that brings the real reason for decline to the fore. The satisfaction research, in a sense, creates the critical moment of awareness. It makes explicit the tacit cause of the decline.
Action Points
The data produced in the client research process should compel two different kinds of action points. The first is direct action that the firm can take to rectify, improve, or expand client service. Typical examples include:
• Day-to-day operations. For instance, the client says, “We need regular reports. We’re not getting them.” So, for goodness sakes, give them regular reports!
• Larger strategic issues. For instance, the client says, “We need you to understand our company better so that you can gear your legal services to our business objectives.” For the responsible partner and, indeed, the entire client team, that is a cue not simply to run out and start doing research on the company helter-skelter, but to drill down deeper to ask: What aspects of the company do we need to understand better? Is it your growth plans, your product development, or your financials? Can we interview C-Suite or other employees to help us develop more understanding and to better define your business objectives?
• Resources. For instance, the client says, “Firm X is developing an extranet that is really useful to us. It would be great if we had something like that from you to help us manage our potential caseload in areas where we’re exposed.” The implicit but obvious message is that Firm X, rather than you, might get more of the client’s business because of that extranet or similar resource.
The second generic action point is less direct but equally important. Your research will reveal client discontents that you simply cannot do anything about. What do you do then?
The most typical case in point is cost. “You’re too expensive,” says the client.
The action point here actually might be a reexamination of the entire relationship. Indeed, it has become a strategic imperative among many law firms to review their client bases and identify the profitable work and the unprofitable work. If there is real resistance to your rates and billable totals, even if those rates and billables are in line with what similar law firms are charging, it might be a cue to disengage.
The objective at that point is to disengage in a way that will preserve the relationship. The same company that is balking at your rates for commodity work could yet have premium work for you further down the line. A forthright, respectful conversation might show that the client would have no problem with your cost structure for those higher-quality assignments.
Client satisfaction research thus directly supports one of the most important law firm goals in today’s market – the migration upward, from commodity to premium engagements. Toward that end, it is important to use professional outside researchers with experience in the legal market, for they will have gathered benchmark data from many other studies.
Remember, clients generally gripe about costs. It’s part of their job to do so; but information collected by a firm with deep experience in the legal marketplace will provide benchmarks allowing you to gauge whether their complaints are unusual, whether they’re things to be really concerned about or whether they’re likely just postured.
Other problems or client discontents might be unsolvable but shouldn’t normally prompt you to any drastic action. Often, the action point in such cases is simple handholding and sending the crucial message that the client really wants to hear. The message is: We can’t solve the problem, but we do still care very much about you, and we will do everything in our power to at least assuage the difficulty.
For example, the client might say, “Your billing system is too cumbersome for us.” Usually, a firm is not in a position to junk and redesign its entire billing system. If the client satisfaction research reveals this particular problem, the firm should first acknowledge that it is an intractable problem clients also appreciate candor but then commit to provide as much support as possible. Make your support personnel available 24/7 to walk the client through every wrinkle in its bill.
Clients do not expect you to be able to fix every problem, but there is great benefit to the relationship in just showing that you hear, understand and care. It’s bad not to know what’s troubling the client, and it’s much worse to ask what’s wrong and then not even acknowledge that you’ve heard it.
Culture Change
Earlier, we talked about the fundamental psychological and political issues that deterred sound client satisfaction research for decades. The good news is that, once launched, the research process helps solve the very cultural problems that had forestalled its implementation.
The lawyer who never did have the guts to make the first call to the client finally does so, and then the second one is easier, and the third even easier. The partnership doesn’t implode either. Quite to the contrary, instead of exposing certain lawyers or practice groups to an unwanted spotlight, the opposite happens. Other lawyers and practice groups get jealous.
It’s a really wonderful revelation when a lawyer learns that these conversations are not awkward confrontations to be feared but rather, if planned and conducted appropriately, positive and productive conversations about how each party can benefit.
Inevitably, they will see business growth among the groups that engage in serious research and follow-up. As often happens with all meaningful marketing initiatives, the naysayers are suddenly clamoring to participate. Most important, the research component becomes a regular part of the business life of the firm, not an ancillary activity or annual event. The firm’s business culture itself changes. It becomes more client-centered and therefore more growth-oriented.
It is at that point that firm management can begin making assessments about the firm as a whole. Armed with data affecting multiple key practice groups, it can now start thinking about its perceived institutional identity and base a firm-wide strategic planning process on demonstrable marketplace realities. Once you have achieved a critical mass of completed interviews, we move from client-specific tactical information to strategic information applicable to entire practices or the whole firm.
Final Message
There are obvious reasons why clients love good client satisfaction research. Their relationships with outside counsel are crucial to them, and when they see outside counsel taking concrete steps to improve those relationships, they respond accordingly.
Remember too, many, many clients survey their own customers. It’s a process that they already believe in. When they see their law firms pursuing such sound business practice, it assures them that the firm is likely pursuing other sound business practices as well, from refurbishing their infrastructures to managing cases more efficiently, which will also redound to their benefit as legal service consumers.
Finally, it reassures the client that the firm does not see itself as some special class of artisans, trafficking in esoteric mumbo jumbo, and mystically exempt from the laws of supply and demand. By auditing your clients, you are acknowledging that you live in the same business world that they live in, and think the same way that they think.
Be careful nonetheless! Law firms must not make the mistake of thinking that their approach to research should necessarily mirror the approach that has proved successful for their clients. Your services and their products may actually mandate very different approaches.
Our next installment will show how market research surveys can do more harm than good if they’re not tailored to the special realities of law firms and their clients.
Mark T. Greene, PhD, is Managing Director of The Brand Research Company, which focuses on providing all types of market research for professional service firms. He has been conducting research for law firms worldwide since 1984. He can be reached at mgreene@brandresearchcompany.com.
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