The biggest challenge for law firms is finding new clients and winning new business, according to 2015 research conducted in Australia by LexisNexis and ALPMA. At the moment, researchers found, this is largely done through face-to-face business development and marketing interactions focused on building the illusive relationship with key decision-makers at appropriate companies.
Earlier research, conducted by LexisNexis in 2014, reveals some other interesting insights about how corporate in-house legal counsels fit into this relationship dialogue. This research highlights that, when it comes to selecting outside counsel, relationship is again the most important factor – outweighing pricing, cost transparency and proven results.
At Lawcadia, we argue that this old law model of a long, strong relationship with a single lawyer or law firm must change as the focus of in-house counsel shifts towards visibility and control of legal costs, and justifying legal spend, while simultaneously managing risk and keeping law firms accountable.
So, for law firms, which is more important: winning new business or improving client service? The simple reality is this: if law firms don’t have clients, they are not in business. Accordingly, firms focus a significant amount of energy and resources on building relationships with companies in order to win new work.
Good relationships are desirable; however, as a partner in the Hong Kong office of a UK-headquartered firm recently pointed out to us, a good relationship and good legal advice do not necessarily go hand in hand, as the work does not necessarily find its way to the best person to be doing that work (whether within the relationship partner’s law firm or outside their firm). Also, just because a partner is good at business development, it does not necessarily mean that they are the best lawyer to be advising you on your business (or at least on every matter).
In an ideal legal market, law firms would focus on doing great legal work, providing transparent legal fees, charging what they say they will charge, focusing on innovations and technology that improve the way that they do their work, and delivering excellence in client-focused service.
At Lawcadia, we believe that this ideal legal market will only become a reality when clients are connected with the best people to be doing their legal work. For this to happen, clients need to question whether their existing method of engaging lawyers – relying primarily on relationships – is the best method of procuring legal services. If clients change their behaviour, law firms will then be incentivised to improve their practices through innovations and technology, as they will have a sales channel to properly leverage those advances.
Until things start to shift in the legal industry, law firms will continue to focus on building relationships to win new work rather than on improving their processes and methods. A more innovative, dynamic legal market is possible, and at Lawcadia we hope that change will come soon.
