Analysis of London Partner Hires at LM100 firms - January to December 2020
Author: Legal Monitor & Carlyle Kingswood Global Link to full PDF article: https://oliver-uploads-aus.s3.amazonaws.com/2021/02/16/01/06/49/d67c9fb1...
Most client plans I see are tactical, short-term and myopic. They are really sales pipeline documents with coffee catch-ups tacked on. There’s often very little about intended client strategy. By client strategy I mean a game plan to win – a big picture view as to how to respond to and potentially shape the client’s needs and buying patterns over time. A clear articulation of how to run faster and smarter than major competitors.
In my view, client strategies can be categorised into five areas. These categories provide a useful checklist in stress testing your key account plans.
Price and risk-sharing is a strategic arena that provides a wealth of competitive opportunity. Firms can leapfrog rivals by offering alternative pricing and risk-sharing models that go beyond convention and better address fundamental client needs. A recent case study on Bendigo and Adelaide Bank is a good illustration of this.
A number of professional service firms are creating an edge, not by race-to-the-bottom discounting, but by negotiating long-term incentivised retainers to deliver positive outcomes to both the client and the provider. I think there’s rich pickings for firms that can truly understand the nature and scope of client risk and identify options to de-risk the client’s business.
Another strategy in this category is to reengineer the firm’s processes to significantly reduce cost-to-serve and to enable the firm to have greater price-setting discretion. Similarly, exploring new ways to measure and enhance perceived value can drive client commitment.
Many clients plans concentrate on relationship mapping and connecting. This is great, but cherrypicking is a client strategy often not considered with any rigour. Cherrypicking starts by asking, “if we had to hire three people that would fundamentally advantage us with this client, who would they be?”. These new hires might be in a competing firm, in the client organisation or in an adjacent provider. A quick business case analysis of the options can be extremely revealing.
I recently heard of an accounting firm that captured the lion’s share of a major client’s spend by headhunting a senior manager from a rival firm. Client feedback revealed this manager had become the ‘go to’ adviser and was far more important to the client than the figurehead client relationship partner.
Information and communications technology is increasingly being used improve client connectedness and service. A great illustration of this is a leading Australian law firm that provides each client end-user a tailored smartphone app that features:
contact details and specialisations of service providers
seamless integration with Skype for videoconferencing
real-time project status updates
billing data and analysis
relevant legislation, case law and industry updates
on-demand and live professional development modules
upcoming events and service improvements
a feedback and suggestion space
Big data is going to be one of the next frontiers of client strategy. At the moment, most firms and clients operate with islands of data that are not linked in any meaningful way e.g. procurement, matter management, time recording, document management, billing, HR, client satisfaction, etc.. There’s much opportunity to integrate and analyse all this data and offer both the client and the firm deeper insights into how to run more effective and efficient projects.
At the heart of the Big 4’s multidisciplinary strategy is a compelling value proposition: our capacity, coverage and consistent service delivery allows you, Mr/Ms Key Client, to lower your transactions costs, leverage your scale, make you look good, de-risk innovation, facilitate new market entry and improve compliance across ALL of your operations. Did I mention ‘make you look good!’?
Benchstrength or depth of expertise in a particular area important to the client can be at the heart of a firm’s client strategy. It’s not that the expertise itself is superior but rather it’s the critical mass of high quality talent and a strong team approach that builds trust and creates preference in the client’s mind.
The fifth area of client strategy relates to the firm’s knowledge – both  technical discipline expertise, and  understanding of the client’s business and industry. The key here is the firm’s ability to contextualise advice and make it relevant to the client’s specific needs. A firm may have a wizz-bang CRM, but it’s useless if they can’t use this knowledge to pre-empt competitors, bring fresh ideas to the client or simply make the advice more cost-effective and valuable.
In my experience many firms over-estimate the distinctiveness and durability of their knowledge. Consequently, if you’re number 2 or 3 on the client’s pecking order i.e. the challenger brand, investment in deepening client knowledge and its application can be at heart of your client strategy.
Another related client strategy in this category is “flanking”. This is about avoiding direct head-to-head competition with a strong incumbent and instead picking up work around the edges in new expertise areas and/or locations. Once a foothold is created a direct assault on the incumbent can then be launched.
In stress-testing client plans it’s important not to get too hung up on the client plan document itself. A plan is not a document. A plan is the outcomes you’re seeking and your intended actions to achieve those outcomes. What’s critical is that there clear evidence of robust strategic thinking and discussion around how to compete, where to invest and, the hardest bit, deciding what not to do.
Credit to Author: Joel Barolsky of Barolsky Advisors, Professional Services Strategy Consultant
Original source material: https://relationshipcapital.com.au/2015/02/09/stress-test-your-client-strategy/