On Friday I trotted along to the offices of Smith & Williamson to hear from the second Financial Times/Managing Partner Forum research by Meridian West (formerly Lighthouse) into effective client adviser relationships. Richard Chaplin mentioned that professional services is the largest sector in the UK and the only one to have kept growing during the recession and reminded us of Tom Peters quote that “every firm is a PSF, if not it should move that way”.
The research was based on 569 online responses (207 from clients, 362 from advisers) and 14 in-depth interviews. Hardly surprising that the main finding was that we need to move from a partner centric technical expert model (fee-earner led, hourly rate, internally focused metrics, functions working in silos and informal project management) to a client centric commercial advisers model (collaborative, alternative fee arrangements, externally focused metrics, functions working together, sophisticated project management).
The main findings were that change is being driven by three key factors:
- More complex business environment – 55% of client say they are managing a more risky business environment. 37% of clients say improving communication and collaboration in the business is among their three biggest challenges
- Pricing pressures – 71% of advisers say they expect the number of advisers offering discounts to win work will increase. 41% of clients say the procurement functions will take a more active role in commissioning external advisers
- More demanding clients – 80% of clients say they will expect a more consistent level of service from professional advisers. 61% of clients say they are trying to achieve more with less resource
It seems that at long last the professions have recognised the need for analyses of profit by client and assignment and that they have finally come round to understanding the importance of everyone developing consulting skills!
Lawyers lead in commercial insight and value for money
One of the shocking results was that lawyers appear to be leading the way in terms of commercial insight and value for money – where accountants and property advisers lag behind. And consultants appear to come last in terms of value for money.
34% rated lawyers as excellent in commercial insight
24% rated consultants as excellent
18% rated property advisers as excellent
15% rated accountants as excellent
27% rated lawyers as excellent in value for money
19% rated accountants as excellent
18% rated property as excellent
2% rated consultants as excellent
Implications for action
The presentation then concentrated on four areas:
1. The contribution of management – Sector focus, performance and technology
54% of clients said that an impression that a firm is well managed was an essential pre-condition of selection compared to only 42% of advisers. It was interesting to see what clients (compared to advisers) thought was the most important contribution of management: There were also suggestions that building brand was “wasted energy” although 53% of managing partners and 41% of CEOs thought that effort was needed in shaping attitudes towards clients.
69% 65% Define special/sector focus
47% 24% Form measures of fee-earner performance and client satisfaction
44% 18% Invest in technology and systems
41% 44% Transparency of fee structures
Not surprisingly, the CEO turns out to be critical in the selection of professional advisers. There was a question about who was primarily responsible for selection and the results showed that 61% of the time for complex matters it was the chief executive and 35% in routine matters. And it seems that clients are less interested in participating in feedback and more interested in discussing sector issues – with 68% saying that regular conversations were “very important”. The presenters argued that this was a significant “agenda gap” – with clients wanting conversations that are sector specific addressing strategic priorities, project management and risk management. The results also revealed client frustration at delegation to junior staff who are unable to have a broader and wider discussion.
2. Knowledge and commercial awareness
There was a good example here of an online portal developed by a Magic Circle firm providing information about the Bribery Act in 120 countries. And an interesting matrix with current to future issues on one axis and technical to commercial issues on the other – with fee-earners in their comfort zone in one quadrant and client aspirations in a completely different space. Interesting that there were observations that whilst the professions are moving towards more specialisation, in-house teams are become the trusted advisers for clients and the external advisers simply technicians.
The information that clients thought were essential to know provided a helpful checklist to firms preparing their fee-earners with the relevant commercial knowledge:
75% Business strategy and planning
67% Sector issues
55% Key personnel
45% Financial strategy
32% Recent developments
29% Information about client cases
16% New product launches
There were also requests for better general knowledge of the context and history of the client’s present situation and an understanding of the politics and soft side of the organisation.
3. Added value services
The most alarming figure was that 74% of CEOs expected more than their professional advisers. There was rather a mismatch between what the clients and the advisers perceived as important with clients benefiting most from feedback (61%), key account plans (57%) and access to learning and development resources (34%).
4. Supporting people – training, tools and frameworks
The research indicated a need for radically different mindsets and skills. Only 18% of advisers say that remuneration reflects commerciality and yet 87% say that they need to develop more in this area. The core areas of training included: client service, business and commercial issues, project management, sales and pitches, financial analysis and pricing negotiations.
Client briefings and handovers were mentioned. Clients rated the tools (while pleading for them not to be over engineered) that they would most value as follows:
48% high quality templates
47% project and case management
43% project scoping and pricing
There was an interesting case study from a leading firm which provides tailored dashboards for all its fee-earners with the necessary RSS, social media and other information streams available in an easy to use form.
The report is due out in September – for further information see http://www.mpfglobal.com/knowledge/client_survey.aspx
For my blog on the 2011 report see http://kimtasso.com/mpf-ft-report-lessons-for-law-firms-putting-clients-at-the-heart-of-your-management
If you feel you’d like some help with the following areas (on which I have been consulting, training and coaching for many years), please give me a call or email firstname.lastname@example.org
- Commercial awareness training
- Sector research and training
- Key client research, account planning and management
- Developing innovative “add value at every opportunity” campaigns
- Client collaboration research and plans
- Project management and consulting skills training
- Client service excellence and relationship management coaching