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Improve Outside Counsel Guidelines Management to Reduce Client Attrition

On March 3, members of the Legal Value Network attended the Legal Pricing and Practice Management (LPPM) 2021 Virtual Summit. During this online event, participants discussed the results of the LPPM Survey and Legal Department Operations (LDO) Survey, which highlighted the differences in client communications and ongoing representations.

According to the LDO survey, nearly 60% of clients have terminated a law firm because the firm ignored instructions or billing guidelines. Although some clients may choose to direct directly voice their displeasure with firms disregarding their directives, most clients don’t communicate to law firms that they’re on the verge of being fired. Instead, there’s usually a slow transition where clients shift work to other firms, and engagements dwindles.

Participants of the virtual summit explored the various reasons for termination, which fall into two primary categories:

  • Poor compliance with outside counsel guidelines (OCGs) and other expectations
    • Exceeding budgets; not following communication and reporting guidelines
    • Applying incorrect rates and over- or under-billing
    • Providing little or no transparency to fee arrangements
    • Using billing codes that don’t align with internal business unit codes
    • Providing incorrect billing that burdens internal operations
    • Failing to meet staffing requirements on factors such as diversity or the leverage and use of lawyers
    • Falling behind other panel firms in commitments (e.g., value offerings, secondments, tech solutions, etc.)
  • Poor communication and feedback
    • Providing little or no communication on matter status
    • Surprising clients with a large amount of legal fees
    • Taking an approach that does not align with business goals
    • Failing to follow defined client processes

Even more strikingly, survey results indicate a wide disconnection between firms’ perceptions of how well they’re meeting client expectations and how well the clients feel their firms are doing.

“The client may never raise these voids with the lead partner, and representations can slowly shift to other firms” said Sharon Scenna, Industry Advisor to the Intapp Operations & Finance team at Intapp. “But firms can get in front of these issues through integrated solutions, end of matter feedback, and leveraging budget reporting to engage with clients.”

Establishing Communication as Key to Client Retention

As reflected in the surveys, only a small amount of LPPM and LDO teams are communicating successfully. Law firms may be talking to in-house counsel rather than routing their communications through the LDO team, and they may not be engaging LPPM professionals in the process.

“Regardless of whether LPPM or lawyers are communicating with business professionals in the LDO or other client representatives, they should be armed with information in advance,” said Scenna. To improve communication, it’s important to analyze outcomes and metrics — including data on staffing diversity, matter performance, resolution timelines, and other milestones — and then proactively establish a meaningful discussion around that data.

The summit attendees noted that lawyers may be uncomfortable talking about metrics and subjective criteria. To help resolve this discomfort, lawyers should consider the following questions:

  • Have matters been resolved on budget?
  • Are we meeting the service team’s requirements?
  • Are we complying with agreed fee arrangements, and does the client qualify for volume discounts?
  • Have we reduced expenses, quickly resolved matters, and provided value-add services?
  • Are we responsive, and have we established open communications with the client?
  • Have there been any service issues?

Leveraging Technology to Streamline Compliance and Communication

Firms realize that, if lawyers are to successfully comply with guidelines and properly communicate with clients, lawyers will need the proper technology in place. In the Briefing Frontier 2021Legal IT Landscapes Survey, respondents were asked which areas their firms were investing in technology. 45% of respondents named “client collaboration technology for matters” as their firms’ top priority.

Intapp Operations & Finance, an integrated, AI-enabled solution, not only improves client collaboration but also helps professionals scope, price, budget, resource, and monitor engagements with end-to-end compliance governance from budget to bill. AI-assisted automated timekeeping integrated into the matter lifecycle solution keeps lawyers aligned and abreast of matter activity and progress, with always-on access to OCGs.

Firms can save time and mitigate risk with Intapp Finance & Operations by using the software’s structured, AI-powered approach to OCG terms management. Users can store, index, and analyze client guidelines while assuring enforcement of their firm’s obligations through integrated solutions.

In light of the survey findings, it’s increasingly important for firms to begin investing in matter management solutions to expose OCG commitments. By utilizing this technology, law firms can centralize information in one place for easy reference and analysis, allowing them to easily get in front of clients to proactively address any issues that emerge.

Put the power of Intapp Operations & Finance to work for your firm. Register for our upcoming webinar, “Get to Know Intapp Operations & Finance: Unleashing the Power of Your Data to Drive More Profitable Business”: