Corporate counsel continue to insist that reducing outside legal costs is their number one goal, yet those costs continue to rise. Despite the concern with costs, the number one reason for corporate counsel to terminate a relationship with outside counsel isn’t cost, it’s lack of responsiveness.
Those are just a few of the significant findings from the latest survey of corporate counsel conducted by Serengeti Law, developer of Serengeti Tracker, a Web-based system that helps in-house counsel work with outside counsel. The annual survey was conducted on behalf of the Association of Corporate Counsel, the largest professional organization of corporate counsel.
Here are some of the more notable findings from the Managing Outside Counsel Survey:
The survey offers detailed information that law firms can put to good use. For instance, it contains details on the sources that in-house counsel use to find new outside counsel. The most common sources (and the percentage of in-house counsel that cite them) are:
According to this data, if you’re looking for new clients, you need to meet the right people – and they’re not potential clients; they’re people who can refer potential clients to you.
Most legal departments find new law firms by word-of-mouth, by referrals from ‘trusted sources.’ So the most effective way to reach new clients isn’t to call on them, it’s to spend time with their trusted sources, to get them to ‘spread the word.’
The figures support this advice: partners and associates need to attend events – meetings, seminars, trade shows, lectures, and what not – where ‘trusted sources’ can be found, and they’ve got to impress them. If they can do that, trusted sources will think of them when in-house counsel asks for a reference. Plus, they’ll have all the advantages that go with being referred by a ‘trusted source.’
The reputation of a single lawyer can be more important in the choice of new outside counsel than the reputation of the entire firm. According to the survey, the top five criteria for selecting new outside counsel are:
The data suggests that partners and associates should spend some of their time writing articles and speaking at seminars. They need to advertise themselves. The data also suggests their time isn’t best spent writing or speaking about very technical issues that few can understand. Better it is to address a large audience – an op-ed piece for the Sunday paper, an article for a popular Web site, a letter to the editor of a popular magazine: something that will be seen by thousands, rather than dozens.
If an associate writes something that’s read by the CEO of a key prospect, and the CEO thinks – “Impressive. Who wrote this? I wish he worked for me” – then that associate’s found a trusted source, one that in-house counsel considers most persuasive.
Nearly half (45.1%) of those surveyed terminated law firms last year. The main reasons given were:
The results tell it like it is: in-house counsel won’t stay with a firm that’s ‘unresponsive.’ And it hardly matters whether you think your firm is responsive or not. What matters is what others think. Do your clients consider your firm responsive? If not, you’re going to lose some of them. The math on this is real simple: conduct regular customer satisfaction surveys to keep up on what your clients think about this critical factor of your service. If the results show your clients don’t consider you responsive, take action. And make it real easy for customers to complain; provide a way for them to do it anonymously.
The best advice for firms that want to attract new corporate clients is this:
The message here is that you need to think like you’re in-house counsel, as if you were the GC of your client’s company. You’ve got to imagine that you could be fired just for making one big mistake (or too many small ones); if your annual review is favorable, you’ll get a good raise; and if your boss takes a particular liking to you and your work, he’s going to keep you. Go at it that way and you’ll be addressing the major concerns of in-house counsel: a smart thing to do.
The top five concerns of in-house counsel are:
1. reducing outside legal costs,
2. being informed about company activities that have legal implications,
3. too much work to do with not enough money,
4. staying abreast of relevant changes in the law, and
5. demonstrating the value of the legal department.
If costs are the major concern of prospective clients, then think about costs. When you talk to a prospect, listen very carefully to things related to costs, and then ask about those very things. People are always looking for ways to save time and money, and they’re willing to discuss their problems if they think you can help (or know someone who can).
Do your homework. Suppose you learn that a good prospect might be confronted with a lawsuit alleging, say, copyright infringement. When you meet that prospect, you know what to mention: a copyright infringement case your firm handled (quite successfully) for another client. If you know what’s of particular interest to a prospect, you can turn that to your advantage.
Make noise. Suppose your firm wants to represent clients whose business involves software patents. Then you need to let prospects (and their trusted sources) know about your firm’s expertise in this area. Suppose there’s going to be a big software development conference next month. Invite the executives attending the conference to the seminar your firm is hosting on software patents.
Or write an article that an executive at a software development firm might read; tell the story about how some company lost big time just because a patent application was mishandled. Find out which trade magazines, journals, and Web sites your key prospects consider ‘trusted sources,’ and write for them.
According to the survey, most corporations find new outside counsel the way most of us find babysitters for our kids or mechanics for our cars: by word of mouth. So, if you want to be new outside counsel, what you need to do this: get people (e.g. trusted sources) talking about you in a positive way.
You need to make an impression. If you represent a firm, socialize. Attend bar association meetings. Attend dinners with guest speakers. Be the guest speaker. Spend time at social events where you can meet key prospects, their current outside counsel, and their trusted sources. Hand out your business card, get theirs, and develop relationships. Sell yourself!
If you’re not comfortable with crowds, then sit alone and write. Get your ideas, along with your name, into circulation. What are your key prospects talking about these days? Write about those things – do a fine job of it, and get your work published where many eyes gather – and people will be talking about your ideas (and you).
And finally, this: if you want to retain your current clients, return their phone calls and reply to their e-mails. Fail to respond to your clients, and you can kiss them goodbye.
The survey was conducted by Serengeti Law. The survey questionnaire (containing 34 questions) was sent to 6,600 members of ACC (www.acca.com). There were 239 respondents. The full 150-page report has all the details. It’s available on CD and can be purchased from Serengeti Law (www.serengetilaw.com). The regular price is $750, the price for ACC members is $500, and the price for LMA members is $650.
About the Author: Mister Thorne is a freelance writer and editor in San Francisco. To contact him, send e-mail to mister.thorne@sbcglobal.net.