|Oregon State Bar Bulletin FEBRUARY/MARCH 2008|
In a service business like the practice of law, it makes sense that the law firm that provides the best service will attract and retain the most clients and be the most successful. Accordingly, the strategy of differentiating a firm through superior service (often phrased as "world class service") is among the most common elements in law firm strategic plans. Yet, when clients are interviewed as to their basis for selecting a law firm, service — except at the good and bad extremes — is rarely mentioned. In fact, as one looks across the landscape of law firms in any country, it is difficult to think of a top firm whose reputation is built on a strategy of excellent client service. How can there be this disconnect?
There is an old joke about two old men who come out of a restaurant complaining about the food. "Can you believe how bad that meal was? That may have been the worst food I’ve ever eaten," said one. "I agree," said the other, "and the portions were so small." What makes that joke funny is that it’s illogical. Who would care about portion size or atmosphere or service if the core service — good food — were not achieved by a restaurant? By extension, a business that performs its core service extraordinarily well will be successful, even if other features are mediocre. One of my favorite restaurants has always been Durgin-Park in Boston. It has an inconvenient location, uncomfortable seating, zero atmosphere, and rude waitresses, but people are lined up for hours to get in because the food is so good.
In any business there are core services that represent the reason a company is in business and attracts customers. For law firms the core service is assisting clients to achieve their objectives using the law (or something like that). How successful a law firm is in attracting clients and the amount of money the firm can charge for its services is dictated by how good the firm is at its core services.
But most businesses also have ancillary services (sometimes called amenities), which are supportive of the core service. In a restaurant it may be the atmosphere, attentive servers, or valet parking. Ancillary services complement the core services. In fact, certain ancillary services may be part and parcel of the core service out of tradition or functional necessity. But all the amenities in the world can’t make up for an inferior core service.
Over the years we have been involved in hundreds of client satisfaction interviews and surveys. I can’t recall a situation where a client responded that they hired a law firm because they gave good service ("Their opinions aren’t always right but they deliver them in such attractive folders."). Neither have I ever had a client tell me that they fired a law firm because of poor service ("I decided to change to the law firm that offers free downtown parking."). A basic fact of the legal profession is that top quality legal work (including achieving the client’s business objectives) trumps high quality client service.
Here’s where things get a little difficult. When talking about client service, law firms will often bring up responsiveness as a form of client service. Indeed, clients do fire lawyers because of unresponsiveness ("She’s the smartest tax lawyer on the planet but she just won’t return my phone calls.") The very important difference here is that many lawyers consider responsiveness as being an ancillary service, which is secondary to good legal work. In truth, from the client’s perspective, responsiveness is a part of the core service that is every bit as important as good legal work.
A certain level of client service is the ante required to successfully provide legal services. It is part of the basic recipe of what lawyers provide to their clients and is, therefore, part and parcel of a law firm’s business model. Accordingly, a first tier corporate law firm is expected to maintain attractive offices, have cutting edge technology and provide a reasonable array of ancillary services at a high quality level. It is the business model that permits a top tier firm to charge rates at the highest end of the scale. But, if a top tier law firm fails to provide the appropriate ancillary services or performs them poorly, it reflects negatively on the appearance of quality in the core service. Simply stated, clients measure the quality of legal services by a whole range of issues, including how much the firm charges and the level of their ancillary services. I suppose it is possible that, at the extreme, poor ancillary service could cost a firm a client regardless of the quality of its core services. But, beyond that, all the ancillary services in the world, performed to perfection don’t makeup for substandard core services.
On the other hand, it is possible for a firm to go overboard providing ancillary services. Not long ago I came out of a hotel in Atlanta and the doorman offered me the choice of a cab or a Town Car to the airport. I could see the next cab in line looked particularly beat up so I chose the Town Car. It was wonderful. The seats were comfortable, the driver offered coffee and newspapers, and there was a reading light and a choice of CDs for music. In fact, I got worried about how much this was going to cost me. When I learned that the cost ran about five dollars more than a cab I remarked to the driver that he must be making a fortune. He told me that, to the contrary, he was probably going to go out of business. It turns out that people see the luxury and assume the price is going to be substantially higher than using a cab. Law firms with commoditized practices and highly cost-conscious general counsels could face a similar problem. Comparing the cost of legal services is tough unless you use the same services from several firms frequently. So, just as people make evaluations of the quality of a core legal service by its pricing and the array of ancillary service, people also make judgments about price based on ancillary services.
Okay, here’s the bottom line: It is essential that a firm understand what its clients consider to be the core services and get them dead solid perfect.
Ancillary services can enhance the client’s perception of the quality of the core services, but they cannot substitute for that quality. Ancillary services must be consistent with the clients’ value proposition. If they are paying top rates, they expect a broad range of amenity services. But if the client is seeking less than top rates, inappropriate ancillary services can cause him to believe he is being over-charged.
So, if your firm is seeking to attract a certain level of clients with a specific rate structure, make sure that your mix of services is in line with your clients’ expectations.
ABOUT THE AUTHOR
Ed Wesemann is a management consultant working exclusively with law firms. He is a partner in Kerma Partners and limits his consulting practice to strategic, governance and growth issues. He can be reached at (912) 598-2040 or by e-mail at Ed.Wesemann@KermaPartners.com.
© 2008 Ed Wesemann