Enormous amounts of money are poured into capturing new clients.
Target lists.
Traffic light systems: Red to Green.
Annual legal spend.
All of these have, in the past, taken up voluminous amounts of time.
Firms have also woken up to the need to cross-sell their services but few understand how to do this.
Often they take their lead from the Banks and assume, wrongly, that because a client used your service once, they will want to use you again for something else.
The missing component: people.
How about the lifetime client?
How many of those have you gone after?
I don’t recall a single meeting where such a term was mentioned. Of course, there were repeat clients but they were normally of a sufficient size to warrant an annual legal spend.
Lawyers often see clients in a one dimensional way.
They look at them as continuum of: file open, do the work and close the file. And indeed many lawyers don’t see the opportunity of developing a client relationship but doing the work as quickly as possible and getting paid. That is not to say that lawyers will ignore ways of generating more revenue from clients but their modus operandi is focused on doing something for free (normally writing off time on the file) in the hope that the client uses them again.
Try changing the mindset.
Not all clients will fit the lifetime model but most will.
If you were to view every client from this proposition, how much would they be worth to your firm?
A residential conveyancing client?
8 sale and purchases over their lifetime = £10,000
A wills, probate and tax planning client?
3/5 wills and tax advice = £7,500 (a conservative figure)
A SME business instructing you to deal with their employment advice, T&Cs, IP/IT and commercial matters generally?
More difficult to predict but probably a conservative figure of £20,000.
And if you scale things and expand out the likely circle of relatives, friends and acquaintances (say a circle of 150 people), then the lifetime client starts to look increasingly attractive.
One wills client could be worth (if you only capture 10% of the available referral network):
£7,500 x 15 = £112,500!
Of course, I make it sound easy. It isn’t. First and foremost it is a mentality issue.
Lawyers lose interest in clients.
Most want the next big thing to walk through the door, almost as soon as the file is opened on the current client.
One thing that is key is to focus as hard as you can on working with the clients that you really want to. This means moving away from acting for everyone who walks in the door.
Very rarely do firms proceed to pre-qualify their clients, even on the basis of their financial standing, and no doubt many of us have applied hindsight and wished we had not taken on a particular client (or two). As has been reported on in the last few days, the Banks have gone through a series of stress tests. Why don’t you do the same for your clients? Or better still, ask yourself are they a genuine lifetime client?
If they are then you will have to change your approach to include the following key disciplines:
- Cherish them.
- Make sure you under promise and over deliver on everything that you do.
- Stay in regular contact.
- Don’t screw up the billing.
- Say thank you and mean it.
- Send Thank You notes profusely.
- Have a flowers budget for your best clients, and use it.
- Make sure you stay in regular contact once the current job is complete. By regular I mean once a quarter. Ignore this and they will drift off and go elsewhere.
- Find out as much as you can about your client and see how you can leverage this to your advantage. Find about the usual stuff like birthdays, hobbies and interests and remember to do something with it.
- If you mess up, make it your job and not someone else’s to fix things.
- If you do mess up, say sorry and don’t couch things in language that only you can understand.
- Don’t pass the client around without understanding what is going on. This doesn’t mean you have to police everything but if you do refer the client to a colleague make sure you know what is going on.
- From a succession perspective, given that quite a few people may work with your lifetime client, start to introduce people into the relationship at the earliest possible stage rather than hoping the client will stay with the firm when the new person eventually comes along.
- Treat the client as one of you and not one of them. Yes, you need to remain neutral but if you do have firm news share it.
- Be honest enough in the relationship to say when you don’t have the expertise to help the client. If you must refer them elsewhere have a non-poach agreement with your referring firm.
In the final analysis there has to be a Win Win for you and the (lifetime) client. If you find that things have got to a point where you are no longer able to act in the best interests of the client (not just that you get fed up with them) then you must make this clear and be strong enough to bring the relationship to an end.
Summary
The lifetime client is precious. In these days of hyper-competitiveness finding a client that is willing to stick with you is rare. You need to make sure you give them very little excuse to move.
~ Julian Summerhayes ~