Why lawyers need to deliver better value if they are stay relevant (and how to do it)

17 January 2020

Lawyers, if you have ever had that feeling of nervousness as you prepare to email your invoice to your client, or that feeling of regret as you contemplate whether to write off a chunk of fees, then you will at least subconsciously understand one of the biggest frustrations clients have with lawyers: cost.

What clients actually think

In a recent survey of 79 New Zealand legal service users by Approachable Lawyer, by far the biggest frustration with lawyers was cost. This is why some clients view lawyers as a “last resort” or a “very expensive part of our team”. Criticisms ranged from “time wasting, pontification” to not knowing at the outset what a piece of advice will cost. And you can understand that frustration. If I jump into a taxi I have a pretty good idea how much it is going to cost to get to the airport. If I use Uber then I can be certain. I use the taxi analogy because taxis run on meters, much like lawyers.

The problem of the hourly rate

As a young lawyer practising in London, I always had problems with the hourly rate. That’s because I had a busy case load and had to churn through the work fast. I learned to dictate quickly and be clinical in the advice I gave, which clients liked. Other lawyers with smaller caseloads on the other hand had the luxury of time so they took longer; their advices were longer and their fees bigger. At the end of the year, our total fees were similar but I had solved more client problems at less cost for the client. Our respective clients were getting a vastly different service from the same firm. Therein lies the inequality for the client.

For most clients, it is not about cost

Whilst clients will complain about cost, I would suggest that’s not actually what they mean. I don’t mind paying $40 for a good steak at a 5-star restaurant. But serve me something which I would expect at a 2-star restaurant and I will complain that the steak was expensive. In a law firm, cost is not the issue; the issue is value for money. For lawyers that’s great news because it means you don’t have to reduce your fees, you simply must deliver value for money.

How to deliver value to a sophisticated client

Your clients will use a whole range of services in their daily lives and whether consciously or unconsciously they are comparing suppliers all the time. If Uber can provide me with a fixed price for going to the airport, why is my lawyer still charging me for photocopying and consumables – my Uber doesn’t charge me for petrol!

So how does a lawyer deliver more value? This is what a selection of New Zealand users of legal services said:

  1. Be more efficient delivering the outcome. Get better at project management and don’t waste time (or at least don’t charge me for your inefficiencies).
  2. Don’t charge me for correcting the mistakes of your junior. If you are going to delegate, do it appropriately so it saves me money. I’m not here to pay for your junior’s training.
  3. Give commercially pragmatic advice, not just advice that’s legally correct.
  4. Collaborate with your colleagues to solve my complex problems but don’t collaborate when it is not necessary. And if you are going to collaborate, tell me first.
  5. Keep in touch regularly with helpful tips and advice. Pass on the knowledge you are getting about my industry from the other work that you do.
  6. Understand my business and the industry in which I operate so you can tell me of pitfalls before they arrive.

Ignore the future at your peril

Put simply, lawyers who don’t add value to the client relationship won’t survive in an ever-competitive environment; they will simply become irrelevant. With emerging technologies, the scope for being more efficient and adding value is forever expanding. You only have to look at Uber to see that. Those lawyers who adapt will be the deal makers of this century; not those who stick religiously to the way things were.

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