22 September 2015

First Impressions Last in Law - ALPMA Summit-Launched Paper on Client Relations

Published on 22 September 2015
This month the Australasian Legal Practice Management Association (ALPMA) hosted its 15th annual Summit, with legal minds from across the world descending on the Gold Coast for the two-day event. Among the presentations delivered during the event, legal profession consultancy CXINLAW released its research report on the changing nature of first impressions and the client experience within the legal profession.

The report, titled No Second Chance – The Importance of First Impressions to Law Firms, sheds light on a challenge facing legal practitioners: the growing service expectations of clients. The report was comprised of data compiled by CXINLAW, which was obtained via law firm “secret shopping” to determine the likelihood of an instruction from prospective clients.

“Australian legal profession bears all the hallmarks of a mature market industry: more demanding and value conscious clients; price-based competition; emergence of market disruptors and technology; increase in regulatory risk and compliance,” CXINLAW Brand and Client Director Carl White, who delivered the report at the ALPMA Summit, said to Insights.

“More specifically, we are now living in the ‘Age of the Client’, where the balance of power is shifting from the professional adviser to the customer. As purchasers we are increasingly sophisticated as access to information and choice grows. We also recognise what outstanding customer service feels like when we get it. We like it, want more of it, and are becoming intolerant of providers who do not deliver it consistently.”

Whereas law firms have long focused on specialist knowledge and technical ability, the CXINLAW report has found that legal expertise is no longer enough, with the high quantity of law firms creating a buyers’ market for clients.

“Firms have been slow to realise that legal skills are simply table-stakes today,” White said.

“[Computer company] Apple asks, ‘how do we want customers to feel?’ Law firms would do well to consider the same, as clients can get advice from anywhere today. How often have you heard anyone say, ‘there are not enough lawyers for me to choose from?’”

While client engagement is becoming increasingly crucial for law firms, the report concluded that many law firms have a slightly skewed perception of their client service: its research concluded that while 80% of lawyers feel their service is ‘above average’, 60% of clients would disagree. White says this discrepancy is often caused by an old economy view of client relations.

“Back in time, firms believed that dissatisfied clients would tell 13 other people about a poor experience – and that was the risk to be managed,” he said.

“Now the risk stakes are bigger – much bigger. In other highly regulated markets around the world, most notably financial services, regulators are being increasingly interventionist. They are demanding evidence on issues of culture of treating customers fairly and on the ongoing measurement of conduct risk. It is difficult to see this trend not moving rapidly into law.”

By failing to address client engagement, White estimates that law firms are liable to lose hundreds of thousands of dollars.

“CXINLAW’s legal sector mystery shopping research has shown that 78% of firms contacted with a legal enquiry failed the first impression test at point-of-sale,” he said.

“That means that after investing in marketing and generating positive referrals from good work, law firms are turning away business when prospective clients make contact with enquiries. Providers are effectively their own competitor, often without realising they being so.”

White asserts that firms can expect an increase in referral rates, retained clients, fees billed, and profits by prioritising the client experience.

“Client Experience Excellence can never just be a marketing strategy,” he said.

“It must be in the DNA of your firm with everyone enthusiastic and accountable for its delivery. It’s important to consider the ‘client journey’ from start to finish and on a moment-by-moment basis, as a client would.”

To access the report in full, click here.