How to Keep Your Key Clients and What to Do When One Still Walks Out the Door

Target Audience: Law Firm Professionals, Lawyers, Law Firm Associates, Paralegals, Law Firm Staff, Lawyers Offices, Law Firm Client Relationship Improvement Interest, Customer Satisfaction Interest

“We’ve decided to take our business elsewhere.” These aren’t the words you want to hear from a client — especially a major client that’s brought in 20% of your firm’s revenues for the past few years. Whether it’s because of client dissatisfaction, a merger, recession, consolidation of legal services or another reason, losing a major client can be financially devastating. Fortunately, there are steps you can take to help prevent it or at least soften the blow when you can’t.

Developing Meaningful Relationships

Having regular meetings with clients, taking them out to lunch and sending them holiday gift baskets are great ways to show clients that you value their business. But client expectations are increasing, so your firm needs to set itself apart from competitors by nurturing these precious relationships.

You can do so by ensuring partners and associates invest the necessary time and effort to understand each client’s business from both a legal and operations standpoint, including these areas:

• Industry and market conditions and trends,
• Competitors,
• Customers,
• Staff,
• Annual revenues and profitability, and
• Technology.

At the end of the day, clients want to know that your firm understands their business and can meet their full range of legal needs.

Treating Clients Well

It may seem like a no-brainer, but it’s not unusual for clients to complain about lackluster service several months into the relationship. Just as you pull out all the stops when courting a client for their business, you need to be especially attentive once the “honeymoon” is over. Keep the momentum going by requiring staff — lawyers and non-lawyers — to up the ante on client service by returning calls in a timely manner, quickly responding to questions and requests, and being well prepared for meetings.

Also, consider ways to further personal service for clients, such as giving them a mini-orientation to welcome them to your firm and explain its practices and procedures, and ensuring business processes are meeting their needs. And with today’s technologies, you can manage client information easily to customize service and be proactive. A client relationship management (CRM) program, for example, can help you cater to client needs and preferences and identify best practices.

It’s also important to keep the lines of communication open. This will convey to clients that they’re important to your firm. Plus, it will give you time to detect signs of dissatisfaction so you can swiftly resolve issues. Having associates keep clients up to speed on news and developments is a great way for your firm to stay connected with them.

The bottom line: A high level of service translates to happy and satisfied clients who will likely be loyal to your firm and provide referrals.

Dazzling Them with Your Services

Firms that successfully cross sell clients and provide them with varied legal services have a good chance of keeping them. In a Redwood Think Tank study of one large law firm, less than 15% of clients who’d used the firm for three legal areas left the firm within two years. And less than 5% of those who’d used four or five areas departed. But more than 35% of those who’d used just one area stopped doing business with the firm. Similar results were observed at four other large firms studied.

To enhance your cross-selling efforts, consider data mining. It’s the process of reviewing data about your client relationships to discover any areas in which your firm can increase business with that client. For example, an analysis might show that only a few lawyers in the firm are servicing a client, when that client actually may require more to adequately meet their needs. This is an excellent time to discuss how else your firm can serve that client and broaden the relationship.

On the flip side, you may find that a client for whom you devote a significant amount of development time and resources is actually not a profitable one. Even if you continue to work with that client, review ways to cut costs and increase profitability.

Cutting Your Losses

If, despite your efforts, a major client decides to leave, inform staff as soon as possible to avoid the spread of rumors and misinformation. There may be some anxiety about job security and planned bonuses and raises, so be forthright about the impact of the loss and how the firm plans to address the peripheral issues.

Next, devise a “recovery” plan for your firm. Its financial condition will likely be a significant factor when determining whether to make significant cuts or rebuild business — or both. Consider these strategies:

Focus on contraction. With this approach, cutbacks are inevitable to control overhead costs. When cutting staff, eliminate the marginally productive staff and retain your best staff on all levels. Develop your stars to further enhance workflow and performance.

Request new levels of billable hour productivity and administrative involvement from partners and staff, but be careful not to dramatically reduce the ratio of support staff to attorneys. Moreover, try not to lay off paralegals. The last thing you want to do is overload hard-working associates in whom you’ve invested time and resources, only to send them running to your competitors.

Enhance business development. Particularly during tough economic times, it’s essential to focus on marketing efforts. You may wish to establish a line of credit, so you’re better prepared to weather the financial storm. Also, concentrate on developing additional business with existing clients, rather than exploring new practice areas.

Making Client Service a Priority

Rigorously managing your key client relationships helps increase client satisfaction and loyalty and sets your firm apart from a crowded pool of competitors. Gain greater control over your firm’s future by investing in client relationships today.

Sidebar: What Do Your Clients Think of Your Firm?

Keeping clients happy shouldn’t be a mystery to your firm. Regularly gauging their level of satisfaction is one way to keep them satisfied with your services. Here are some simple and effective ways to get this feedback:

• Hire a neutral party, such as a research firm, to conduct comprehensive interviews to solicit clients’ opinions.
• Have partners or relati­onship managers visit clients regularly to discover their needs.
• Solicit feedback from clients on whether your firm’s satisfaction surveys and interviews address their most critical issues.

To contact Feeley & Driscoll, please click here.