What makes for great client service at a moment when new technology, rising legal costs, and economic and regulatory uncertainty are complicating and, in many cases, eroding law firms’ relationships with clients?
In August, BTI Consulting Group, which gathers client feedback and advises firms on client relationships, attempted to identify the qualities that, in chaotic times, separate law firms delivering excellent service from their peers.
Perhaps not surprisingly, firms that want to please their current clients and attract new ones “act with lightning speed,” BTI said. They also “include clients early in strategy, field the absolute best team, make it easy to work with their firms on every front, and deliver ultra-practical, actionable recommendations.”
Clearly, clients are facing an ever-more complex business landscape and yet, according to multiple industry surveys, they are deeply unsatisfied with how the bulk of their outside law firms are managing their relationships. The firms bucking this trend are providing creative solutions to help clients cope with what BTI calls the “jolting changes in [their] needs and expectations.”
A New Era?
Each year, BTI surveys legal decision-makers at organizations with $700 million or more in revenue, focusing on companies that spend the most on legal affairs, lawyers and executives who hire or influence the selection of law firms, and industry thought leaders. In August, the company named 240 individual lawyers to its annual list of “Client Service All Stars” and inaugurated a new list of “Client Service Trailblazers,” 55 law firms that BTI said “are at the leading edge of client service.”
BTI said it found that overall client satisfaction is at a 25-year low, in part because many firms are “still holding onto legacy models” that do not meet the demands of clients. BTI posits that firms have entered an “era of anticipatory counsel” where they must deliver insights before clients ask for them. Simply being responsive to a client is “ice age behavior,” the consulting firm said.
The rewards for law firms that change their model are significant. “Client service used to feed business development,” BTI said. “Now, they’ve fused – driven by CEO impatience, blurred boundaries, and sky-high expectations.” Proof of a firm’s indispensability can be found in their clients’ willingness to accept higher rates—even at a time of economic insecurity. “Top firms didn’t pivot,” BTI said. “They jumped into managing the chaos. And their rates prove it.”
Five Attributes of Success
Firms and lawyers who are delivering cutting-edge service share five key attributes, BTI said. They are:
Embedded. Outside counsel take opportunities to become part of the client’s part of the decision-making process by providing real-time insights, ensuring legal issues easy to understand, providing clear and actionable choices for decision-makers, and making in-house counsel look good by providing them with ammunition for their interactions with other C-Suite executives.
• Business Aware. Without stinting on the legal soundness of a matter, outside counsel make their clients’ business goals “their North Star,” BTI said. That means lawyers consider how a legal decision will affect the client’s market position, its risk profile, and its operations. The advice they give, BTI said, is “as commercially fluent as it is legally sound.”
• Creative. Given the slate of new issues in-house legal departments are facing, outside counsel should be bringing new ideas to the table. Lawyers who are succeeding at client service are able to “thrive on creating precedent,” BTI said, adding that they have a knack for “sidestepping stalemates, reframing risk, or unlocking hidden opportunities.”
• Fast. This is not an age when outside counsel can take a client’s problem back to the firm, noodle on it for days or weeks, and get back with a lengthy memo outlining myriad options in a blizzard of legalese. “Today’s CEOs want answers now – not in a week, not tomorrow,” BTI said. Firms that are successfully meeting client demands are delivering “fully formed, business-ready advice while others are still outlining the issue,” BTI said.
• Practical. Lawyers should know their clients’ businesses, deliver “simple, concrete, and fit for purpose” answers, and do so on a timeline that makes it possible for the client to take action, BTI said. They “cut out fluff and theory, drawing on deep client knowledge and experience” to deliver advice.
State of In-House Counsel
In-house counsel “are caught in a squeeze,” facing ever-tighter timelines, increased risk, and “relentless pressure” from their CEOs, BTI noted. Indeed, in its annual State of the Corporate Legal Department report—a survey of more than 2,400 corporate general counsel released in March—Thomson Reuters identified four “spinning plates” that GCs say they are currently facing.
First, GCs are concerned about their effectiveness—how they can create “operational value.” Are their interactions with their business colleagues and the legal advice they are providing adding value? Do their teams have the right expertise to meet business challenges? Efficiency is another issue. The pressure is on to create greater value for the company’s dime, or “how do GCs serve the needs of the business in a way that gets the best value for their investment,” Thomson wrote.
At the same time, legal departments must consider how they will protect the business, Thomson said, particularly those assets that provide their companies with a competitive advantage. And, Thomson added, GCs must determine how the legal department can “use the legal function to enhance and enable the value that [the] company is trying to generate.”
It's a complex mix, and it’s hardly likely to get any simpler. “GCs today,” Thomson noted, “are considering the value of their law departments across a wide spectrum of applications given the multi-faceted role today’s in-house legal team plays in corporate life, taking into account how departments must work in the most efficient and effective ways possible to serve the rapidly evolving needs of the business.”
A Perception Gap
Law firms that can proactively, quickly, and practically assist in-house counsel in managing these issues are, in BTI’s formulation, most likely to enjoy client satisfaction and success. Whether firms are self-aware enough to gauge these issues is another matter.
A recent survey by Case Status, a client engagement software provider, found a sizeable gap in the way clients and outside attorneys view their relationships. More than 70 percent of outside counsel described their firms as “caring.” Only 40 percent of clients agreed. And just under 80 percent of clients said that they did not feel “reassured that their legal team cared about their experience or asked for feedback.”
The company found that many firms lack structured ways for clients to provide feedback and that most are failing to track key metrics, such as the time it takes to respond to clients or the total time spent on cases. Just 35 percent are tracking response times, and 25 percent are measuring case time, the survey said.
There is, the survey said, “a significant perception gap between how service is delivered and how it is received.” (The Case Status survey included more than 400 law firm clients and 100 lawyers, as well as included anonymized usage data from law firms and clients who use the company’s software.)
Ancillary Businesses
Some firms are taking an entirely different approach to filling holes in their client service offerings—by building new, ancillary businesses designed to address specific client issues. While the overall numbers are still small, the average number of ancillary businesses owned by Am Law 100 firms has risen 50 percent in just four years. According to data compiled by Law.com, Am Law 100 firms operated 0.8 ancillary businesses per firm in 2020. By 2024, the average had jumped to 1.2 per firm.
The businesses, Law.com said, “encompass areas including tax and accounting, health care, education policy, government relations and investment advisory work” and are “often staffed by non-attorney business professionals.” Some of the businesses have outpaced their firms in terms of profitability and have even been spun off. “But short of that, in most cases it's more realistic to view these units as opportunities to fortify client relationships and develop new revenue streams,” the website reported.
In doing so, law firms are emulating the Big Four accounting firms, which have long-established ancillary businesses. The accounting firms, in the words of one law firm chairman, “understand the value of diversifying your revenue stream in addition to creating more value links to your clients.”
Ancillary businesses may also allow firms to demonstrate some of the qualities BTI mentioned. In particular, an ancillary operation can demonstrate that a firm is able to offer creative, yet practical, solutions to solve client problems—even if they don’t fall within the typical legal function. And by taking on those problems, firms can further embed themselves in their clients’ operations, becoming even more integral to the success of the business.
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David L. Brown is a legal affairs writer and consultant, who has served as head of editorial at ALM Media, editor-in-chief of The National Law Journal and Legal Times, and executive editor of The American Lawyer. He consults on thought leadership strategy and creates in-depth content for legal industry clients and works closely with Best Law Firms as senior content consultant.
