Profitability Exists at the Centre of Client Satisfaction and Law Firm Efficiency

Blog post - 20 aprile 2021

In terms of their potential to drive law firm profitability, efficient legal services and enhanced customer experiences are two sides of the coin. Both are critical components of the customer experience for value-seeking clients.

Value in the context of legal services
In their whitepaper ‘Profitability from Efficiency’, Thomson Reuters outline value as being a combination of:

» Efficiency
» Predictability
» Cost effectiveness

Similarly, Wolter Kluwert note that legal departments consider the following factors to be the most important when evaluating law firms:

» Technological capabilities that improve productivity, efficiency, and collaboration
» Specialisation
» Ability to understand client needs

The absence of ‘price’ from both of those lists is noteworthy. From these findings, we can conclude that legal clients derive value from more than the final number on their invoice for the outcome they receive. In fact, value-driven legal services focus on delivering ‘good enough’ outcomes within a predictable, consistent price range. Clients empowerment and inclusion throughout the process also contribute to their perception of ‘value’.

Access the benefits of customer excellence
A report by the XM Institute evidences a statistically significant correlation between
customer experience and customer loyalty across 20 major industries, ranging from
airlines to banks to insurance providers. The legal industry’s traditional response to these findings might be to brush them off, confidently asserting that law firms are different. But that age-old rebuttal holds less power today than it has in the past. The legal industry isn’t different anymore.

As Jack Newton puts it in ‘The Client Centered Law Firm’

“I challenge the idea that lawyers are different from other service providers, especially in the eyes of the consumer.”

That’s why we’re beginning to see more law firms around the globe using trade names, instead of the traditional named partner model (LexisNexis, 2020). Consumers no longer consider law firms to be institutions without equal. Instead, lawyers are seen as service providers. Law firms stand to gain plenty when they cater to the changing sentiment.

Technology-enabled law firms can have it all
In the 2020 report ‘Uncovering the connection between digital maturity and financial performance’, Deloitte found that digitally mature companies are ‘far more likely than lower-maturity ones to significantly outperform their industry average on key financial metrics’. Digital maturity was assessed on the basis of seven criteria, including workflow intelligence and customer experience. Law firms that differentiate themselves by prioritising customer service in their technological spend have plenty to gain - including more time to practice law. Many of the technologies that address major concerns raised by legal clients don’t ignore pain points experienced by lawyers. They work to improve customer satisfaction while freeing up time for lawyers to focus on lawyering. Some examples of these technologies include:

Automated Time Tracking
Intelligent time tracking technologies don't just record time, they narrate the legal journey to the customer. From the lawyer’s perspective, time tracking tech reduces the time burden of recording time to just minutes a day. From the client perspective, the consistent, detailed narratives account for the lawyer’s time in a manner that clearly demonstrates the value added by the lawyer. What’s more is, since automated time tracking significantly reduces leakage, your firm gains better insight into the actual cost of the legal services provided. This allows your firm to more confidently quote pricing to your customers to deliver these results, again boosting your customer excellence.

Client Portals
Client portals securely store all the information and communications related to client legal matters in one place. Since clients have access to these portals, they can access their entire file as they please to communicate with their legal team, check on the status of documents, or upload additional information. For lawyers, client portals reduce the time burden of keeping concerned clients updated about developments (or the lack thereof) in their matter. So, client portals are able to simultaneously increase customer satisfaction via increased collaboration, while reducing the time burden of non-legal tasks for lawyers.

Two birds with one stone
Some commentators suggest that legal investment in customer excellence has developed slowly because it’s more difficult to prove the return on investment for customer-facing improvements. Comparing customer churn metrics with the cost of customer acquisition provides a far less tangible (and concrete) ROI than a productivity technology that saves every lawyer across the firm 30 minutes per day Technologies that tackle client satisfaction while also promoting internal efficiencies are an elegant solution for discerning firms that demand more from their legal tech.