Transcript:
The headline would be, “Client loyalty is diminishing.” In the past, it was almost a given that you had a deep one-to-one relationship with a client to the point of perhaps it even being a personal relationship — whether you play golf with that client on the weekend, you acknowledge family events, etc. That’s not the case anymore.
Many clients of law firms in particular are shopping around. They’re looking at things like alternative legal service providers, mid-tier firms that can do work more cost effectively, boutique firms that have more specialization in certain areas of law. So they’re really doing a lot more shopping around, whereas in the past, the more formal procurement processes — for example, an RFP or a formal panel appointment — might have been avoided by people that had these really good relationships. That’s not the case anymore.
So just because you did a really great job on the last matter or engagement is not a guarantee that you’re going to get the next piece of work from these clients.
One of the people that we interviewed about this was a chief financial officer of financial services organization. He literally said that they owed it to the company — they had a responsibility to their company — to ensure that they do their research and at least entertain the idea of talking to other organizations; that it was no longer adequate or sufficient to just rely upon the same providers. They need to broaden their perspective and bring others in, [or] at least hear what they have to say when they pitch.
So that’s changing. The other thing is cost pressures and the desire for more operational efficiency and speed. All of those things are creating a very different competitive dynamic. And the smart firms are considering all of those factors when they appoint their providers.
I think that’s the major change. It’s this idea of diminishing client loyalty. It’s not a given anymore. There’s no guarantee.
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