What effects will the recent and proposed changes in legislation and market dynamics in the global and national arena have on the customer relationship management and business development strategies of Canadian law firms?
In an increasingly competitive and internationalized global market, only one thing is really certain: change. Only those firms that can respond to change will survive. But as attitudes, laws, and technology move on, do we need to completely reinvent the wheel or should we be relying more on the principles of good business development and client communication?
Just because technology allowed us to bomb our clients with information, does this really give us the right to do so? Surely, it makes much more sense to provide clients with information they ask for in the manner that suits them best.
Furthermore, as more international firms look with interest at securing strong foundations in the North American market by merging with Canadian firms, what impact might this have on existing client relationships? And how will firms rise to the significant cultural and technical challenges of combining mature client lists, business development processes, and customer relationship management systems?
Given the changing landscape, it’s useful to examine a few of the global and national developments affecting the Canadian legal sector to see if we’re embarking on a business development journey in which all bets are off and nothing we previously relied on can help us now.
One of the big challenges is the federal anti-spam legislation, something that some believe represents the end of the road for flexible marketing communications. Of course, we live in an era in which legislation and client expectations are putting increasing constraints on marketers’ ability to communicate at will with large numbers of people.
At the same time, the changes in marketing communications and privacy legislation are already making us re-examine the way we communicate.
Offering the recipients of our communications an opportunity to opt out of receiving them will no longer be enough. Instead, we must have a robust and proactive strategy for soliciting their consent on a regular basis and for implementing systems and processes to ensure that all staff members understand the letter and the spirit of the law.
Of course, providing our clients and contacts with the opportunity to manage their own communication preferences is in itself nothing new.
The point of the legislation, in addition to harmonizing our laws with places like Australia and the European Union that already have similar directives in place, is to make the point that it’s the recipient who’s now firmly in control and not the sender.
But has this not always been the case? While the recipients may not have had the law on their side to prevent senders from engaging in unsolicited communication with them, they surely already had the power to vote with their feet by simply ignoring the messages they received.
The issue for law firms was that while the capital and operational costs of sending unsolicited e-mail communications were just a fraction of those of sending hard-copy messages, the negative impact on the brand was far more immediate and long term. Too many firms adopted the attitude that clients must want to hear what they have to say without really checking to find out if this was true.
For me, the anti-spam act and other legislative efforts like it offer marketers an opportunity to reacquaint themselves with the core principles of good client communication. By this, I’m not simply referring to the memoranda, newsletters, and legislative updates sent out by marketing departments. I’m talking about picking up the phone and talking to clients, engaging with them to understand their business concerns and challenges, and then matching the services in order to help them achieve their goals.
Repeated studies in the professional services market have found that the No. 1 reason why clients stay with their adviser is the firm’s ability to narrow the gap between their expectations and what it delivers. Surely, engaging in meaningful dialogue rather than a marketing monologue is just an extension of this concept.
But what about the impact of law firm mergers on client relationship management? With the recent arrival of the Norton Rose Group in Canada through its merger with Ogilvy Renault LLP, there has been on lot of attention on whether the move is likely to be the start of a trend or a flash in the pan aimed at satisfying the firm’s well-reported global ambitions.
My suspicion is that it’s more likely to be the former. If you take a look at the rumours pages of any of the international legal publications, you’ll see that firms around the world are jostling for their position as the power shifts in the global economy. Rumours suggest Herbert Smith LLP, for example, is in talks with Freehills to increase its presence in the pan-Pacific market.
But while mergers offer a great opportunity to expand into new markets and territories, there are huge systemic, cultural, and process issues to overcome, not to mention the impact new owners might have on client relationships. In a market that thrives on both local client knowledge and international referrals, what effect might merging with a global giant have on a Canadian firm?
Will international firms still refer work to the Canadian arm of a major global firm as opposed to an independent Canadian specialist? Will all clients see this as a wonderful opportunity to expand the relationship with their professional adviser to new jurisdictions or will they view it as further evidence of the relentless wave of global corporatization?
Going back to the issue of narrowing the gap between expectations and delivery, all of us have no doubt had first-hand experience as consumers of the inverse relationship between customer service and business size. We need to be careful not to make our clients the victims of our success.
From a business development perspective, one of the key challenges arising from the merger of firms is bringing together different business development and customer relationship management systems and processes. Having worked on the merger of customer relationship management systems for Hogan Lovells, these challenges are something I understand well.
In a nutshell, the issue is that during the first few months, you have two of everything. As cost savings are often a key factor behind the merger, the reality is that two will definitely become one over time.
However, as with the proposed anti-spam legislation, uncertain times should actually mean we rely on core client relationship principles more rather than less. When it comes to the customer relationship management system, it really is a question of being really clear about what it is you’re trying to achieve and keeping it simple at the same time.
I think the critical point when it comes managing the huge complexities of firm mergers is that the board will have other things to worry about. The last thing the board is going to be thinking about is how the business development department will rise to the challenges of managing client-facing systems and processes.
But in many respects, it’s actually one of the most important things to get right.
So when it comes to preparation for mergers, is there anything you can do? In times of uncertainty, of one the things you can be sure of is that the more things change, the more they stay the same. As a result, picking up the phone and talking to clients remains a key strategy.
Michael Warren is a customer relationship management, business development, and data strategy professional. His firm, Stanton Allen, specializes in assisting professional services firms to define, implement, and succeed with practical strategies that support their wider business development and growth objectives. He can be reached at [email protected].
