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  • By Leo Staub

Client retention hampered by decreasing client loyalty

Updated: Aug 14


Let me bust three myths today: (1) Successful lawyers are primarily dealmakers and thus do not depend on the cultivation of relationships. (2) The most important partners in a law firm are the rainmakers. And (3): At the end of the day, that law firm which has the best legal expertise will win the competition for the best clients.

  • One of my former law firm partners once said to me: “We lawyers are dragon slayers. When the dragon’s been sorted, we move on. There’s bound to be another such monster behind the nearest hill, as well as someone who’ll be happy if we get rid of it.” His message was: don’t let’s waste our time informing our clients about news from legal practice (free of charge!), giving lectures to colleagues from legal departments (free of charge!), offering (badly paid!) secondments in order to help bail out clients, or providing services like (non-billable) monthly reports or enabling young employees from legal departments to serve internships in our firm. Yet it has long been scientifically proved in marketing that investments in customer retention are much more efficient and profitable than investments in customer acquisition. Don’t get me wrong! New clients are important. It is much more important, however, to retain existing clients and to generate new business with these clients.

  • Who gets the longest round of applause at the law firm’s Christmas party? Who gets the most generous present from the managing partner’s discretionary kitty for particularly deserving partners? Who is most likely to skip individual rungs on the ladder to the highest remuneration level in the lockstep of business law firms? The rainmakers, of course, those colleagues who attract the highest number of new clients. Which law firm, however, measures the efforts that lawyers make to cultivate existing clients? How are colleagues rewarded who still listen to a client when the talk has long been about something other than the project and the time is therefore not billable? Like those lawyers who make an effort “at their own expense” to really understand the client’s business in order to be able to discuss non-legal issues with him on an equal footing as well? Like the lawyers who write a birthday card to a client or take a client’s teenage offspring along to a court hearing in order to provide them with an insight into our profession? Law firms are well advised not only to appreciate “rainmaking” but also those colleagues’ efforts who “merely” serve the cultivation and expansion of existing client relationships.

  • “Our law firm has the best lawyers that our profession can offer. That’s why we’ll always outclass our competitors!” This is a great fallacy, dear colleagues! Studies have revealed that clients – and notably also professional clients – regard state-of-the-art legal services that are provided in a state-of-the-art manner as a matter of course. This doesn’t need to be a debating point when a mandate is entrusted to a law firm. If the specialist aspect of the service quality is right, clients are at any rate not dissatisfied. What brings them back to the law firm at the very next opportunity, however, is service quality, i.e. all those elements of the service which exceed the clients’ obvious expectations regarding legal quality: accessibility, a high degree of availability, short response times to enquiries, a sound understanding of the client’s business, transparency and predictability in mandate management and billing, empathy, a willingness to listen, as well as proactive, targeted and comprehensively professional communication on an equal footing.

Therefore you’d be ill-advised to put your feet up simply because you’re a great lawyer of above-average talent! This may be a wonderful starting point for success but on its own won’t be enough by any manner of means. Run your business as if the future of your law firm depended solely on the loyalty of your clients, their enthusiasm regarding the way you look after them, and the quality of your services! If you succeed in combining legal expertise with the willingness to serve, the dragons will queue up for you.

This blog was originally published on 5 June 2020 in Vista, the online magazine of the Executive School, University of St.Gallen, Switzerland.

About the Author Prof. Dr. Leo Staub is Professor emeritus of the University of St. Gallen where he, until spring 2020, served as the Academic Director of the division Law & Management. He is still active and internationally recognized as a scholar in the field of Legal Management. Leo can be reached at leo.staub@unisg.ch

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