How to get more legal work from existing corporate clients?

Written By: Richard Brzakala

For those law firms that are fortunate enough to have successfully navigated their way through a request for proposal process and landed a coveted spot on a clients preferred counsel list they may be surprised to find out that the competitive pressures do not subside after the selection process has concluded.

In fact, many firms face greater challenges as they come face to face competing against the best of the best of preferred counsel firms. Yes the field of competing firms may have been drastically narrowed to a select number, but for many firms the fact remains that they must focus their efforts on maintaining their status by continuously meeting high client expectations and performance deliverables in order to remain on the list. Most corporate clients who maintain panels or lists of preferred counsel do not make any commitments with regards to the volume of work a firm will receive.

So after a while it’s not surprising to find that some firms may begin to feel anxious about the quantity of work they are receiving or not receiving for all that they must cope with.

If you are a law firm currently on a clients approved counsel list, the following tips may be of use to you in assisting you to stand out from your peers and potentially gain more work from your client?

Do not take things for granted. Understand that you are in a relationship and like all relationships you need to give it attention and you should never take things for granted, avoid being indifferent, apathetic or entitled to the work you receive.

Leverage existing clients and their network of contacts for introductions to other internal business partners. Many times legal work at large companies is decentralized so that regional executives and managers source legal work directly to law firms and not through the legal department. You will want to get in front of those folks in order to offer up your services. If your existing client relationship is solid, your current client can help with introductions. This is a huge advantage over cold calling and chasing someone who doesn’t know you.

Are you competitively priced?
Market pressures over the past 10 years have forced many clients to become increasingly fiscally prudent. Understand that clients are now more than ever cost conscious.
Many General Counsels (GC) will never compromise their company’s reputation because of price. Nevertheless, GC must show their CEO’s and Board of Directors that they are actively working to reduce. if not, control external legal costs. Consequently, in-house counsel are always looking for experienced, innovative and competitively priced firms. Fortunately, or unfortunately, there is always a firm out there willing to charge less to get in the door. Pricing therefore is one of the most important factors in your existing relationship and presents a challenge to your bottom line and the dynamics of your relationship.

Be cautious with annual rate increases and consider carefully the implications of any increases, at any time.
Gone are the days when clients would automatically accept increases without questioning why a law firm was increasing. Chances are that if you have landed a preferred counsel spot, it is in part because of how your firm prices its legal services. The last thing you want to do is unilaterally increase without either informing your client in advance (3-4 months notice is adequate) or more importantly discussing, and I mean really discussing (face to face) your proposed increases.

Many clients today have deployed legal e- billing software in part because they want to be empowered with data to make intelligent decisions on which firms to utilize. The power of big data has allowed clients to be in the driver’s seat when procuring legal services. Therefore be prepared to be challenged and to explain your pricing strategy.

If you currently use, or plan on using, any of the following “explanations” justifying your proposed increase, think again as you might be doing yourself a disservice:

• “our consultants have advised us..”
• “we need to be competitively priced..”
• “market conditions require us..”
• “ the market is increasing..”
• “ we only increase once a year..”
• “ it’s our firms policy..”
• “our executive board is requiring..”
• “our admin overhead costs have increased..”
• “we forgot to increase last year”
• “you approved the increase last year without questioning us..”
• “we automatically do this with all clients”
• “no one objects to our increases”
• “other firms are increasing as well”
• “we do this every year at the start of every year”

It might be worthwhile to also do your own (independent) due diligence on your client(s) and the market you operate in. A study on market rates of Wall Street or Bay Street firms may be less applicable to smaller regional markets or firms where clients expect rates to be lower and increases to be minimal. Also, question the reliability of information you hear on “the street” or from other firms who tell you that you need to be “competitively priced” to reflect “market conditions”.

In my opinion, nothing spoils a relationship more than a bad surprise that leaves the client feeling betrayed or taken advantage of. For that reason I recommend that you consider the importance of how you communicate the message of your rate increase.

Talking about your proposed increase in relation to the value of the work you do and not in relation to the rate increase is crucial to getting buy-in and acceptance from your client. Therefore, I believe the communication portion, including your value proposition are just as important, if not more, than the actual numerical value of the rate increase.

If you have adequately communicated your intentions, discussed options and agreed mutually on an effective start date in advance of any proposed rate increases, you will have significantly minimized the potential for negative impact to your relationship.

Alternatively, if you believe in unilateral across the board rate increases every January 1, without client consultations or advanced warning then you run the risk of potentially damaging your client relationship and/or finding yourself with lower market share then your peers.

Retroactive fee increases are frowned on, particularly if unauthorized.
Also, think twice about requesting an increase after you have already completed the work. In other words wanting an increase to be retroactive to the work completed. The client may authorize it for a particular matter, but they may also decide that it was your final matter with their company.

Propose alternative fee arrangements (AFA's) and ways that a client may save money instead of the traditional hourly rate model.
Sophisticated buyers of legal services are now moving many of their preferred firms to value based billing or AFA’s. Don’t wait for the client to suggest this. Not only will your client appreciate your innovative thinking, but you will score points for introducing a new way to save them money and manage their budgets for the matters you work on. For most clients today if a law firm cannot propose an alternative fee arrangement, the client may be more than happy to find an alternative firm that can accommodate AFA’s.

If you mutually agree on a budget, do not exceed the budget.
The whole purpose behind budgets is to give the client a firm and confident expectation of the legal costs on the matter. Clients expect their firms to be sophisticated enough that they know how to calculate ‘all in costs’ and deliver their work on time. Clients don’t want to hear firms whining and making excuses after the fact. Inaccurate budgets = loss of credibility.

Distinguish yourself from all others (e.g. quality of service, timeliness, communication, relationship building) – don’t send generic and glossy marketing material. No one has the time to read it and many clients will simply question the value and toss it aside. Perhaps instead book a 10-15 minute meeting ( conference call preferable) with your client to communicate and update them on changes, advances or innovation at your firm that will help the client with their business needs. Maybe a client’s business strategy has changed....so consider changing yours.

Offer up complimentary (free) legal work (capped hours or dollars) in a new or existing practice area. Most firms are looking to grow their business.
Offering up to do free work with new business partners shows the new and existing client that you are vested in your relationship with their company and that you want to grow your relationship and lastly that you are willing to take on the risk of writing down legal costs if only for an opportunity to prove yourself to another client.

Avoid “nickel and diming” your client on every single little cost or disbursement and avoid submitting small balance invoices months after the conclusion of a matter. Optically it may look like you weren’t managing the matter that well or that you are struggling for revenue and required to charge the client on every single item. Senior executives do not appreciate seeing an invoice coming in months after a matter was concluded. They hate any administration and having to authorize irritating questionable invoices doesn’t help your firms reputation.

Offer complimentary (free) value added services such as education material and webinars, short term secondments, access to your firms law library, sponsor clients for education courses, offer your facilities to host offsite events or meetings for clients, offer free credit legal advice that a client can tap into for quick simple legal issues without having to worry about being billed.

Do not compromise integrity and professionalism. No two clients are exactly alike. They are all unique and consequently will require different approaches and/or strategies. You need to always demonstrate that you are their trusted legal adviser looking out for their best interests. Do not be afraid to disagree with your client and always provide options and reasonable cost expectations for those options. Lastly, it is always better to ask questions then make false and costly assumptions.

Understand and be in compliance with your clients internal policies and procedures.
Many corporate clients have a myriad of internal policies and procedures to manage external counsel. Everything from billing policies to code of conduct and terms of engagement. Know them all and live by them. When in doubt ask about a potential conflict situation or obtain clarification regarding whether the client will accept certain disbursement costs or whether the client has a policy around accepting gifts from you.

Also, tread carefully with respect to gifts and entertainment. Many clients today have Gift and Entertainment policies in place for their internal staff to comply with. GC and senior management will not compromise the integrity of their staff and company reputation over a few playoff baseball tickets or inappropriate gifts.

Don’t minimize the importance of your relationship. I have seen this over and over where perhaps because of apathy, indifference or neglect; law firms have dismissed the importance of maintaining regular contact and or follow up with their clients. I cannot stress enough how important it is to engage with your client in order to solicit their feedback on your performance or to understand if their needs or business strategy has changed. Regardless of the type of engagement arrangement you have, volumes of work you receive, or practice area you assist the client with, the importance of understanding your clients needs is paramount to your relationship. Just because the client continues to pay your bills, don’t assume and take it for granted that everything is alright.

Learn to manage the unknown and variances. If you are uncertain or unclear about the scope of your engagement, communicate this to your client.

Do not make unapproved assumptions that cost your client money and if you do, be prepared to explain why and perhaps even write down legal costs. How a firm deals with this type of situation is their own discretion, but reducing or writing down legal costs for the client (regardless of who’s at fault) may speak volumes as a sign of loyalty and goodwill.

“No surprises” has been one of my mantra’s in managing outside counsel relationships for many years. Whether it relates to legal work, staffing of a matter, budgeting or legal costs, clients have a very low tolerance for the unknown but yet have high expectations for their preferred counsel on delivering timely and expert legal advice without any surprises. Anything less than satisfactory is sub optimal and sours the relationship. However, clients may tend to be more lenient if the surprise is explainable by a reasonable variance and has a low impact to their budget.

Adopt what I refer to as the golden rule of collaboration which demonstrates to the client that your firm cares and understands their needs, that your firm gets “it” and that you have listened to what they want and need and that you want to be their go to firm and strategic partner.

Do not offer up reciprocity for your services.
Many law firms fall into the trap of thinking that clients will hire them only if the firm brings or refers business to the client. This could not be further from the truth. If your client hires you on the basis of counter trade, chances are pretty good that your skill set or expertise is taking a back seat to other factors. Reputable clients will not hire on the sole basis of counter trade. They will instead look to your expertise, skill set and reputation and whether you are a right fit for them rather than focus on revenue generating or quantifiable factors tied to counter-trade.

Having said that there may be clients who after a period of time may approach preferred counsel to discuss opportunities to grow or extend their business to accept new clients or deploy operations to a new geographic location or offer consumers a new product and therefore may want to leverage your firms expertise, knowledge and business contacts.

Leverage your competition by creating cross firm business alliances, networks and legal synergies with other law firms across geographic regions or practice groups.

Gone are the days where law firms can do it alone. The legal market place has undergone a seismic shift as traditional law firms have been forced to alter their delivery models, reach out to newer markets and/or practice areas. For many small and medium sized regional firms market pressures have also forced competing firms to join forces in order to leverage each other’s strengths and maintain or improve market share. Advising a client that your firm has an existing, historical relationship with another firm or network of other firms that can be trusted to provide the same level of service that you do is an added bonus for large companies and in some instances they may expect this of you.

Promote innovative solutions
Never assume and never take it for granted that your preferred counsel status will not change. The legal marketplace today is oversupplied with competition such legal professionals, technology innovators, legal paraprofessionals and third party legal service providers that are not only reinventing traditional law firm models but also changing and re-engineering how legal services are being delivered to clients. All of these competitors are actively vying for the attention of your client.

Look into your model and think ahead to understand where you are headed and where your clients needs will be. If you are uncertain, meet with your client to discuss their needs 12, 16, 24 months from now and how you can be there for them. Perhaps offer up some of the following examples; collaborate on technology projects; consult on process re-engineering; assist them with creating greater efficiencies and effectiveness in their business operations; assist with standard document preparation and other back office support etc.

Become a strategic partner
We have all heard various maxims and expressions such as; never stop looking over your shoulder or someone is always inventing a better mouse trap. These could not be further from the truth when it pertains to your relationship with your client. Nothing in today’s marketplace is guaranteed. Business strategies for a client may shift and consequently impact the status of your relationship.

To help you remain on a preferred counsel list and ensure that your importance is not second guessed or undermined, you need to continuously look for ways to add value to your relationship either directly through your work or in how you deliver your services to your client.

Ultimately a firm’s goal should be to become of strategic importance to a clients operations so much so that you are thought of as the “go to firm” for the company and as a trusted and valued legal partner - and not just another legal vendor.

About the author: Richard Brzakala has nearly 20 years of experience managing external counsel at two of the largest financial institutions in Canada. He has provided leadership and global oversight of enterprise legal management strategies, including alternative fee arrangements, cyber security, sourcing and innovative law firm performance benchmarks. He has managed hundreds of law firms across the globe and developed innovative practices with regards to legal management, business outsourcing and competitive RFP practices. He is recognized as a market thought leader with regards to LPM and law firm management.
Copyright ? 2016 by Richard Brzakala . This article may be reprinted provided that the author's byline, bio, and copyright notice are retained in their entirety.
Disclaimer: The views expressed here are solely those of the author in his private capacity and do not in any way represent the views of the CIBC or RBC.