5 ways to get more clients and keep the ones you have
In these challenging economic times clients are using greater care in the
consumption of legal services. As technology has made it possible for clients to
request that law firms bill electronically, the business and insurance worlds have
begun studying the efficiency and expense of law firms through the creation of
“metrics” that can be used to grade lawyer and law firm performance. With the
information that is being generated about law firm performance, clients are
making decisions as to which firms to select or retain as panel counsel. They are
looking at individual lawyers within law firms to select the lawyers they wish to
hire and the lawyers who they will prohibit from handling their cases. They are
also looking at efficiency, cost per case, and outcomes in deciding whether to
grant fee increases.
At the same time that sophisticated clients have begun measuring the
metrics of their law firms, they have also established litigation guidelines and
budgets that are intended to enable them to manage litigation more closely.
Reliable anecdotal information suggests that clients are becoming more
demanding in compliance with guidelines, and increasingly they are holding law
firms and lawyers accountable for budget accuracy.
It would be easy to see metrics, guidelines, and budget constraints as an
intrusion into our profession and an annoying burden. However, smart lawyers
understand that these aspects of our business are here to stay. If you can view
these developments as an opportunity to excel and grow your business, your
practice will grow and prosper!
1. Close cases as quickly as possible.
The first and easiest measurement of importance to clients is cycle time.
This element is very simple: The client keeps track of the average time that a law
firm or lawyer has a case open from the date it is assigned to the date it is closed.
This metric is measured because businesses understand that the older a case
becomes, the more expensive it tends to be. Smart lawyers and law firms
understand that they should track the average age of a case, and they should use
extra care to shorten case cycle times. This means that lawyers need to be
attentive to case management plans, and they should do everything in their power
to move a case from start to finish as rapidly as possible. Furthermore, law firms
should do everything in their power to get a case closed as quickly as possible
once a settlement has been reached.
2. Assign cases to the lowest competent biller.
Another important metric is case staffing. (The specific metric is usually
referred to as the “effective” rate, and it represents the blending of the rates of all
timekeepers over the life of a case.) Businesses and insurance companies now
have the ability to look at a law firm or a litigation partner and assess whether law
firms staff their cases properly and according to guidelines. They are looking to
see whether work is being performed at partner rates, associate rates, or paralegal
rates, and they are attracted to law firms in which cases are handled effectively by
the lowest billable person. They are also now actively comparing how one firm’s
“effective” rate per case compared to another in the terms of the way a firm staffs
cases. Like cycle time, case staffing and “effective” rate are aspects of litigation
management that law firms can easily study and for which they should establish
best practices. Whether you are a partner or an associate on a file, you should be
mindful that work ought to be performed by the lowest competent biller so that
the effective rate for all work on the case is as low as reasonably possible.
3. Decide quickly how your client's case will proceed.
Most of our more sophisticated clients realize that very few matters go to
trial any longer. Therefore, they do not view a case in terms of the activity that
must be undertaken to get to trial. They are more interested in the activity that
must be done to get to what is called a “decision point.” Therefore, case phasing
is frequently measured. Clients prefer to see that a firm (or a lawyer) frontloads
the case with the discovery and investigative activities that are necessary to allow
the client to assess risks, estimate value, and to reach a point at which the client
can make the decision to either settle a case or get ready for trial. Thus, lawyers
and law firms who pay attention to the phasing of a case and understand the
importance of getting to decision point promptly will get more work than their
competitors. Furthermore, within a law firm, clients will make assignments to the
lawyers who are better at case phasing than others within their firm.
4. Make sure your average case cost is competitive.
A combination of the importance of cycle time, case staffing, and case
phasing is the average cost of a case. Clients are more closely scrutinizing what
law firms charge on average for particular types of cases, and they are looking to
see what the average cost is per case for particular lawyers within a law firm.
While the case-by-case comparison is imprecise, law firms that have a volume
practice can be compared to other similar law firms in their jurisdiction to see
whether one firm handles cases at a lower average cost than another firm.
Similarly, clients are comparing the average cost per case of lawyers within a
firm. Thus, good lawyers should be aware of their average case costs and
attentive to all of the factors, including hourly rate and staffing, that enter into
average cost per case.
5. Compare your case outcomes to your competitors.
Another significant metric is average outcome by case. This is clearly an
imprecise measurement, but companies are attempting to weight cases by case
type and complexity so that they can determine whether law firms and individual
lawyers are producing good average outcomes compared to their competitors in
their city or geographic area. This may be the one metric that is most difficult for
a firm or lawyer to control. However, to the extent that you work hard on every
case to get it resolved for the lowest reasonable outcome, the better your average
metrics will be.
For firms to adapt to a metric driven business world, they must begin
tracking performance, and they must train their lawyers and staff. Individual
lawyers within the firm need to be reminded that their case handling techniques can harm the firm as a whole, or they may be individually excluded from new
case assignments. Staff members need to be reminded that there is urgency in
every case in getting the case closed once it is settled.
There is plenty of software available to assist you in litigation
management. Most firms have it. Use it!
Lastly, you must be mindful that some clients will tell you how your
metrics look and how you compare to other firms. Other clients will not. Your
opportunities for fee increases and the very issue of keeping clients is impacted by
your scorecard. View it as an opportunity—not a burden—and you have
nothing to fear.