With the level of competition continuously increasing in the legal industry, we are constantly challenging ourselves to figure out ‘what good looks like’ and how we can separate ourselves from the rest. Ultimately, it boils down to how you keep a client happy and deliver a first-rate service, as well as constantly testing ‘is there a way we could be doing this better?’
From advising general counsels on their dispute resolution and regulatory legal services, we found that major institutions are often selecting their law firm advisers not on the basis of technical expertise alone, but on their ability to deliver a solutions orientated service.
The challenge in defining quality of service is that each client has a different perspective, and ultimately the barometer moves depending on which client you’re dealing with. This can be characterised by the balance of good value for money, strong technical expertise and the maintenance of good client relationships across each of the firms’ jurisdictions. No longer does a firm with a lower charge out rate escape the high standards expected from those with a higher rate, with many of the GC’s that we have spoken too suggesting the exact opposite.
Through our discussions, we have managed to outline below the four key trends that GCs find most valuable from their law firms.
It’s all about the individual
There is a preconception that the elite firms in the market offer the best service, whereas the view from those instructing was quite different. When we spoke to a handful of senior decision makers within financial regulation to find out if they were altogether happy with the service they received from the Magic Circle, the question was met with general acquiescence. Notably, when the same question was asked of firms with specific regulatory expertise outside of the Magic Circle, such as Simmons & Simmons and Norton Rose Fulbright, they were not only satisfied with the capability of these firms, but also praised them for their level of service in this area.
What made these firms stand out in the eyes of their clients was the performance of individual partners, offering greater value and innovative solutions. This has enabled them to build a solid reputation for offering good client service. Regardless of a certain platform’s size and scope, if your client can see your dedication to their business, it will always be recognised.
Take inspiration from the elites
So how do elite law firms differentiate in their service to clients and how can this be emulated?
Simply put, the pre-eminence of the Magic Circle in today’s legal environment can be distilled down to their international reach and delivery of a consistent, reliable global service. Therefore we have identified one of the key markers for quality of service being the resource of law firms to be able to act whenever an issue arises, and to do so with the same quality of service as would be expected from any other of their international offices and on par with the leading domestic offering.
Law firms must market their international capability along the lines of consistency of service across their respective regions. However, in the modern legal landscape these international offices will only thrive if the firm’s global clients trust the quality of the people in other jurisdictions. This has a cumulative effect on the other offices in the network, and can under-pin or undermine future business development if a standard of service to clients cannot be maintained.
PEP means nothing
One value law firms often measure themselves by is Profit per Equity Partner (PEP). PEP is an indication of profitability but it is misconstrued to think that the greater the PEP figure the greater the level of service. In fact we could argue the potential for an inverse relationship between PEP and service. Does a high PEP figure always attract the best calibre of lawyer, is it a barometer that the lower your PEP the worse the lawyering is? No, is the simple answer.
Increasingly, firms outside of this elite are gaining a seat at the table, and are challenging the market by focusing on service and delivery and a value-based proposition to be executed by quality lawyers.
We consistently witness the diversification of panels, as major institutional clients recognise the increase in value and service quality when you instruct an alternative to the Magic Circle. Efforts have been made by these firms to strategically invest in human capital, establish meaningful client relationships and improve service levels through the use of technology and innovative resourcing models.
Hire the right people
Strategic hiring is a key enabler for firms aspiring to improve their service and in turn market share. This can be achieved by being attuned to your clients’ needs and developing your capability in whichever areas are best suited to serve your client. Although this is more of a long-term approach to improving the service you deliver, it is a great method to further reinforce the long-lasting relationship you have built with your client. One example of this is how US firms are expanding their regulatory practices in London, by adding key regulatory figures to their offices in order to serve their top banking clients. These firms include Gibson Dunn & Crutcher, with the hire of James Perry from Ashurst, Latham & Watkins, who brought on Rob Moulton also from Ashurst, and Cleary Gottlieb Steen & Hamilton with the hire of Bob Penn from Allen & Overy.
Whilst these significant ‘headline making’ hires are important and provide a clear strategy and ambition to not only clients but the legal marketplace, other lower profile hires can be just as effective. We have seen through certain strategic hires both in London and internationally whereby firms invest in younger partners or Counsel type figures there has been immediate reward through client instruction and appreciation of talented sensible hires. This point is important to acknowledge as while the ‘headline making’ hires are pleasing on the eye and from a PR perspective, well thought through and strategically planned investments whether big or small will always make an impact on clients.
The law firm market is becoming less binary, and traditional law firms are needing to work harder to retain and build new client relationships. With increasing pressure coming from new legal services providers, such as the Big Four, it is important to ensure you’re keeping your clients happy by not only providing reputable practice area expertise and geographical presence, but by convincing them of your attentive client service, showing you are truly observing and listening to their needs.
If you would like to find out more or discuss this topic further please contact Director Ed Parker, T: +44 (0) 20 3642 1872 E: eparker@fidessearch.com