In the last few months I have been writing about law firm service delivery: how firms can optimize the experience of their top clients to gain share of wallet and increase profits. This includes deploying tools such as legal project management, process improvement, technology for efficiency, deep knowledge of the client’s business, and client teams. As I begin pitching this idea as a consulting offering, I have been concerned about the tension between individual partner and firm institutional interests. So I was interested to read The McCormick Group’s Take…on The Value of Client Teams by Steve Nelson.
Firms should want to institutionalize clients but individual partners may resist. Partners may want to keep their clients and “books of business” portable. Steve Nelson, a leading legal recruiter, lawyer, and former legal journalist, writes in an e-mail update today that the market is shifting away from individuals, toward institutions. Reproduced here with his permission is “The Value of Client Teams":
“At the recent Legal Sales and Service Organization meeting in Chicago, there was an invigorating discussion about client team programs at law firms. While there was debate as to whether these teams actually produce any significant additional business for the firms, one of the participants, Adam Severson, Chief Marketing and Business Development Officer at Baker Donelson, pointed out that these programs can provide one significant additional benefit. In the event a key lateral leaves, the teams can help galvanize the firm to reach out to existing firm clients to communicate its commitment to the client and ability to handle that client’s matters properly and without any interruption, and thus, in the end, keep much of the work at the firm.
This story seemed to coincide with another trend that we’ve been hearing from managing partners throughout the country, specifically that there is a widening gap between the prospective portable billings that incoming laterals vouch for and the actual results that occur months after the laterals arrive. While some of this can be attributed to overly optimistic predictions by the laterals themselves, we believe that other factors are more significant. In particular, the old adage about “we don’t hire law firms, we hire lawyers,” often no longer applies. Instead, in an era where increased pressure is on corporate counsel to reduce outside legal spending, there has been an increased emphasis to consolidate legal providers who both know the client’s business and can offer increased efficiencies. So the ability of one partner (or sometimes even a group) to hold onto a significant amount of a client’s business in a particular discipline is diminishing each year. Add to that the key client programs that many firms have instituted, which include client feedback interviews, secondments, and other initiatives, it’s clear that the landscape of client relations has changed.
There are a couple of implications for the future. One is that law firm lateral hiring should be the acquisition of “talent", not simply the acquisition of books of business. The dangers of that latter strategy are well illustrated in the recent Dewey debacle. But perhaps more subtle is the importance of hiring the best possible business development talent. Those professionals who can help a firm solidify existing client relationships, and perhaps forge some new ones, are well worth the investment.”