Who makes the decisions in a company? Is it the CEO, middle management or the employees? The answer is actually none of the above, as it is the customers who decide ultimately.
“Put your customers at the top, and it will permeate through the entire organisation,” proclaimed chairman of the board and management consultant, Jens Moberg, a guest speaker at a recent knowledge-sharing day for lawyers organised by Deltek.
And the customers are certainly the ones who have begun calling the shots at law firms as well, with more and more customers asking for flat-rate agreements instead of traditional hourly billing ‒ and to top it off, clients have also become less loyal and do not automatically use the same law firm every time they need to resolve a legal matter.
Customers, or ‘clients’ as they are known in the legal sector, are making greater demands for transparency. What does this mean for the business side of things? In this respect, it may be better to call them ‘customers’ instead of ‘clients’, as the knowledge-sharing day was all about how to move from a traditional client-orientated business to a modern, new business sales model – at the centre of which are the customers.
Greater demands from customers, heightened competition and pressure on margins all mean that law firms must learn how to deliver services differently, and this naturally affects the way in which the business is run. To summarise, we see four characteristics which are now separating the legal sector from others actors in the knowledge-based service industry, which includes the likes of consultancies and accounting firms:
- Law firms seldom employ dedicated sales representatives
vs. the rest of the knowledge-based service industry, where some actors are miles ahead when it comes to securing sales and keep up with the latest trends, such as social selling and inside sales
- Law firms do not have a clearly defined sales process
vs. the rest of the knowledge-based service industry, where the sales process has been defined with sales filters, and, in the majority of cases, with clear processes that cover the entire spectrum, starting with the opportunity and finishing with contract being signed
- Law firms seldom have a well-founded CRM process
vs. the rest of the knowledge-based service industry, where actors have almost played a CRM volume game, with plenty of tracking and quantification of opportunities
- Law firms are among the best at maintaining and building on relationships with existing customers
vs. the rest of the knowledge-based service industry, where caring for existing customers is not always given top priority
By taking a look at the knowledge-based service industry and finding inspiration in the way others do business, your law firm can find new ways to optimise business. We are convinced that the legal sector must embrace ‘the new normal’, i.e. start to run your business as others in knowledge-based services do. Here are four areas in which there are both risks and potential for optimising your business:
- Less customer loyalty means that you should:
- remain focused on existing customers
- while becoming more focused on new sales and marketing
- Increased competition means that you should:
- develop and implement an alternative business structure and professionalise staff functions, e.g. by appointing a CFO and an HR director
- develop additional and new price structures that match the customers’ needs and wishes
- New business models mean that you should:
- develop pre-packaged solutions that enable you to standardise assignments
- offer set-price agreements
- The New Normal, or adapting the legal sector to the rest of the knowledge-based service industry means that you should:
- change management structures
- change the business processes and implement KPIs
- implement product development.
The challenges are many. A number of law firms are already well on their way to optimising their processes in relation to ‘the new normal’ to ensure that they can continue to grow. This is not something that can be done overnight, and it is not an easy process, as evidenced by the large turn-out at our knowledge-sharing day, where some of the largest and most successful law firms in Denmark shared experiences of turning around their business perspective. And, as Jens Moberg said, the time has come for the customer to decide, not the CEO. Even if the customer is a client.
If you would like to know more about our knowledge-sharing day for lawyers, do not hesitate to contact Michael Toft here or on LinkedIn. You can read more about The New Normal in the legal sector in our white paper, Bring in the Professionals.
Michael Toft, Principal Sales, and Katrine Hertz Østergaard, Corporate Marketing Communications Director, Deltek