Building Valuable Client Relationships: Part 3: Do You Have Guts?
It’s 4AM and a corporate executive cannot sleep. The issues facing his business are threatening his company and his livelihood. His career is on the line.
He reaches for the telephone and places a call to the one person he knows will help him evaluate the situation in a rational and sober manner.
Are you on the receiving end of that telephone call?
If the answer is “no” or “not often” you will probably never make the kind of income you deserve.
In that moment, the corporate executive (or affluent client, professional, public figure) calls someone he trusts. Someone he knows he can count on. Someone who, regardless of field of professional accomplishment or avocation, will give him sound guidance even when that means delivering unwelcome news.
Most lawyers never become trusted advisors. They are simply content being experts in a specific area of the law. An expert can command a significant fee premium. An expert takes some risk but ultimately, can only be evaluated or compared to another expert. An expert also gets to sleep through the night without ever taking the desperate telephone call from a powerful client.
But the expert is only used sparingly. He rarely gets to give guidance and counsel on matters outside of his purview. The expert never has a permanent “seat at the table” let alone at the right hand of the person in charge.
Making the transition from expert to trusted advisor is not complicated but it is risky. That’s why few lawyers do it.
The risk lies in emotionally engaging people in a place where emotions are seldom spoken of, and never on display. The boardroom.
Experts can get into the boardroom but they seldom have what it takes to stay there.
How Do You Make the Transition?
Let’s say you are brought in to advise a board of directors on a merger. This is a fairly straightforward process. Typically you deliver your commentary and findings to the chief counsel of the company. You are thanked. Paid well. Dismissed.
This happens because you did not take the next step.
If you went the extra mile and evaluated the merger and it’s implications on the business landscape 5, 10 and 15 years down the road, and you provided strategies for handling the legal pitfalls you know would arise at each interval, you would have a seat at the table.
Again, most lawyers won’t do this. It involves risk. In fact, chief counsel of the company won’t do this because of the risk it involves.
That’s why YOU will need to give the presentation to the board of directors.
Once You Are in the Room
When the time comes to report your findings you stress their implications on the leadership of the company. You highlight the pain each of those executives will feel if certain action is not taken. You support your assertions with facts and case studies (stories) of huge colossal errors made by not following the guidance you have set forth.
You challenge the most powerful people in this company to take action or face disaster.
Then you sit down and wait.
Either you will be a hero or you will be fired.
Now it is slightly more complicated than that. There is significant relationship development work that precedes this dramatic moment.
But the question I have for you is:
Do you have the guts to lay it all on the line, every day, just like this?
Because if you don’t; If you just want to analyze and report; You can be a successful lawyer.
But you can never be a trusted advisor.
This article is the third in a series on developing business as a Trusted Advisor. Links to the other parts are included below for your review.
This article highlights the relationships that form during your representation of a client. It is a roadmap to higher fees and a better life.
The qualities of a Trusted Advisor are outlined in sharp detail. You can evaluate your emotional make-up against them and determine if you have what it takes.
Building Valuable Client Relationships: Part 2: It’s About Trust
Moving your relationship from one of attorney/client to trusted advisor involves a great deal of trust. The client must emotionally invest in you. He must believe you have his best interests at heart and he must feel as though he is your only (most important) client.
Developing this type of relationship with 1,10, 20 or 200 clients is an enormous undertaking. Most lawyers cannot do it.
There are five essential elements of trust-based relationships. If you focus on these you will grow your law practice but more importantly, develop deep relationships that stand the test of time.
The first element of trust is integrity. It is foundational. Without it there is nothing.
You must do what you say you are going to do, every time. Consider commitments carefully. Integrity is like having an emotional bank account. Each interaction with a client either adds to the account or withdraws from it. Keep your word and you have made a deposit. Break it and you have made a withdrawal. When you are overdrawn, the account is closed.
Transparency is also an important window into your integrity. The things you don’t reveal are often the most damaging (or potentially damaging). You need to be proactively transparent with your clients. Let them know what is going on behind the scenes. Defend them when they are not in the room.
Honesty is paramount. The client must hear the truth even when it hurts. Dishonesty will lead to the death of a relationship.
Confidence comes from predictability. There should be no surprises for your clients. Your client should know how to reach you. He must understand the rules for when and where he can call you and what to expect from you at all times.
As you develop a strategy for your client and the work you will do together, you must establish reasonable expectations. Pie-in-the-sky promises are a sure way to destroy a relationship. Be realistic and truthful in your assessment of the client’s situation. He must be able to count on you giving it to him straight at all times.
The client’s feelings are a secondary concern when you communicate with him. Be direct, blunt and leave nothing unsaid. He expects that from you. If you are going to error, make your mistake on the side of over communication. Give the client too much information rather than too little. Don’t have him learn of new developments in his matter from anyone else.
Clients have the tendency to be passive/aggressive with their lawyers. They are reluctant to openly disagree with them due to their lack of knowledge of the law. Yet they will take veiled “shots” at the lawyer in casual conversation. You must address this when it happens. This type of behavior is not only unhelpful, it can be downright destructive to a relationship. Let the client know it is unacceptable.
You only goal in taking a case or working on a matter is to achieve the best possible outcome given the circumstances. Forget about the exposure you are going to receive because of this matter. Forget about the huge fees you are running up. Forget about the circus sideshow following you around. Your goal and the client’s goal must be in alignment and all consuming.
This is the one element most attorneys miss and it is the easiest for the client to detect. Your client is not only smarter than you give him credit for being, he is also more intuitive. He can sense your motivation. If you want a long term relationship with the client, your intentions must be pure.
The client comes first. Period. End of story.
Every conversation starts with and ends with the client. If he doesn’t ask about your kids, your family, or your latest vacation, don’t bring it up. If he doesn’t want to talk about the big fish you caught last week or if he doesn’t ask about the 67 you shot on the golf course, don’t tell him. And never, ever, talk to him about how great a lawyer you are (after he has hired you). If he cannot tell, from the results, from the way you handle yourself, from the activity on current matters, promoting yourself to him will only seem needy and defensive.
In reading through the five elements of trust, you may think there is a great deal to remember. In reality, this should be natural behavior. Think about it. If you are following the Golden Rule and you respect everyone, why should your behavior with a client be different?
Sometimes life (and the practice of law) imposes faux values upon us. We see someone with questionable ethics or manners enjoy success and we believe their behavior is appropriate and required. Ultimately, we need to look in the mirror and be happy with what we see. If we are, and the client cannot accept and appreciate that, we must continue to search for better quality clients.
In case you missed the previous article in this series, a link is included below:
This article offers some insight into the different types of relationships in the world of the attorney. Marketing can only play a role after you know which type of relationship you want to create. This framework is helpful in understanding how deep, long lasting relationships form.
Building Valuable Client Relationships: Part 1
This article is the first in a series of articles on relationship development and its relationship to improved income for lawyers.
One of the concepts most lawyers fail to grasp is the different types of relationships that are possible between an attorney and a client.
Your clients trust you. They invested their trust in you before they ever invested their money. Yet most attorneys do not treat that trust with the respect it deserves. They don’t nurture it and allow it to develop properly. This prevents the relationship from growing over time.
This is one of the key differences between those whose law firms at an exponential rate and those whose law firms grow at an incremental rate.
Clients pay a premium to lawyers with whom they have deep relationships. It is a transcendent quality.
Included in this article is a chart that outlines four different types of lawyers.
Can you determine, at a glance, which quadrant most of your relationships fall into?
Ad Hoc Lawyer
The lawyer who handles matters as they surface is what I refer to as “The Ad Hoc” lawyer. The term itself finds its roots in Latin – meaning “for this.”
If you are an ad hoc lawyer you get telephone calls for matters as they arise, regardless of your practice area. In other words, your relationships with your clients are reactive in nature.
You are always waiting for a new situation (often a crisis) to develop and you are waiting for the client to call you in reaction to that crisis.
It is of no importance whether or not local bar regulatory bodies sanction that title of “expert.” Some attorneys, due to their talent, skill and experience, are more likely to achieve a positive outcome in a certain types of matters than others. Those people are experts.
The expert is engaged on a situational basis. Expertise in a specific area has value to a client but it rarely translates into a relationship beyond the specific situation.
The General Counsel
Within any large organization you will find someone heading a legal department. Typically, this person has responsibility for assessing legal risk, developing legal risk mitigation strategy and assigning legal work to lawyers within or outside of the organization. In most cases, the internal general counsel is an attorney but in all cases, he is a procurement and finance officer – concerned with achieving best outcome for lowest possible investment.
This internal general counsel is not the person we are focused on for this discussion. Our focus is the person this internal manager turns to when he has a problem. Often he will turn to his counterpart on the outside – a generalist with expertise in procedural areas (litigation or transactions). The external general counsel is a broad sword solution to most problems (including those which may require a scalpel).
The push/pull of accountability between finance and outcome leaves most outside lawyers wondering why the relationship with an internal general counsel never develops beyond a certain point.
The Trusted Advisor
A Trusted Advisor has a relationship that transcends the typical attorney/client relationship. Finances are never an issue in this relationship because the trust, guidance and support are invaluable.
Ascending to the level of trusted advisor requires developing an uncommon level of intimacy with your client. Intimacy is difficult to establish and even more difficult to maintain over time. It requires work.
Many lawyers will be frightened, put off and intimidated by the concept of “intimacy” in a work-related setting. These feelings alone preclude them from becoming trusted advisors.
In our next article in this series we will discuss how you can transform some of your client relationships into relationships that transcend financial boundaries.
How Valuable Are You?
Your fee says a great deal about you.
Like it or not, people use money as a criteria for passing judgment on everything from homes, to cars to people.
When you develop a fee for providing value to your clients, you (and they) typically view that fee as a reflection upon you.
And you leave them no choice.
When you charge for work completed, or time you spend, it’s hard for people to grasp the value you provide.
Think about that for a moment.
How much is reviewing a contract worth?
How much is a conversation with opposing counsel worth?
In that context, most people would view the value you place on your time as unacceptable (even arrogant).
But if you set the value of your services in the world of the client, if you help him see how you can provide value to him, your fee is almost irrelevant.
So instead of an hour reviewing a contract, you provide the client with a title to a home free of liens and encumbrances.
You replace the conversation with opposing counsel with a purchase agreement for a business that will deliver $2 million per year in new revenue.
When you adjust the lens through which you view your work, you immediately change the dynamic of the relationship. You are no longer viewed as someone punching a time clock. You are viewed as a valuable confidant.
Price your services by the hour and you set yourself up for commoditization.
Develop a fee based upon the value you provide and you are a trusted advisor who has aligned his interests with the interests of the client.
Incidentally, I have several business structures that help attorneys make a great living and live a great life ®. How much is making more money and getting home for dinner, on time, every night, worth to you?
Here are some other resources you need to review:
If you bill by the hour, you are not going to like this article very much. Few good relationships are built on a foundation of hourly bills. You can move to an alternative billing structure. Here are the reasons why you should.
If you want to move away from the traditional law firm billing model, this is an article that can get you off to a good start. Here we outline a quick and easy way to bill your clients and increase the trust they have in you.
In this article I take another shot at convincing you to look at the value you provide. The analogy I use is a bit “far out” but it makes the point well.
A Law Firm’s Marketing Should Include Industry Advocacy
Would you like more people in your target audience to know you?
Can a leadership position in a community increase your credibility?
Are you looking for a way to differentiate yourself from everyone else who does what you do?
If you answered “yes” to any of these questions, this may be the best article you read all day.
Because I’m going to give you the quick and easy steps you can follow to achieve all three of those outcomes.
The answer lies in industry advocacy and how you can leverage it to increase visibility, improve credibility and differentiate yourself from everyone else who does what you do.
Step One: Find an Issue
Talk to your clients. Find out what’s keeping them up at night. Ask them about their biggest frustrations. Who are they angry with? What bureaucracy is preventing them from being more successful?
Are they victims of overregulation? Is there a local, state or federal group taking up an agenda that will choke off their livelihood?
The way to find the answers to these questions is to undertake a traditional research approach. This consists of:
- Reading trade journals
- Attending industry conferences and meetings (often sessions at these meetings will serve the same purpose as a focus group because you will get an interesting cross section of opinions).
- Conduct individual interviews with members of the industry/community
One of my clients, a trust and estates attorney, receives referrals from financial advisors and planners. She regularly attends their conferences and conventions and speaks with people at these events. This gives her great insight into their mindset particularly related to regulatory issues.
Step Two: Identify the Solution
Once you are certain you have an issue that is aggravating your target audience, you must determine who can resolve this issue and formulate a solution.
Sometimes this is as easy as lobbying a public official or writing a few letters to the head of an industry organization. Sometimes that activity is simply a first step in a long process.
Once you have some ideas as to a solution, bounce those ideas off your clients and industry professionals. Refine the ideas as necessary.
In the example of my trust and estates attorney client, she realized that the ‘fee only’ financial planners with whom she worked didn’t have someone advocating on their behalf with the local chamber of commerce. These folks were different than stock brokers yet they were being lumped into the same category.
The educational seminars being promoted by the chamber of commerce were dominated by the big financial firms (whose representatives all received commissions for recommending investments). The “fee only” folks are paid based upon the dollars in the client’s portfolio. Thus, my client believed, the “fee only” advisors’ interests were aligned with the interests of the client.
Step Three: Take Action
The final step in this process is to take action on behalf of the people in your target audience. Make telephone calls. Write letters. Give interviews. Lead rallies or educational sessions. Do what you have to do to raise your profile while advocating on behalf of your constituents.
In the case of my client, she:
- Wrote an article in the money section of the local paper about the difference between fee only advisors and brokers.
- Spoke at several investment club meetings to educate investors on the difference between the two types of advisors
- Lobbied the local chamber of commerce to separate stock brokers from financial advisors in their category listings
While some of these efforts generated a change in the industry (locally) and some did not, all of this activity got my client noticed by people in this profession. As a result, her referrals increased and her visibility and credibility increased as well. She was the only non-advisor to be invited to all the industry events, invited to publish in their magazine and newsletter, and given carte blanche to continue to advocate for this industry.
Many of the folks in this community (statewide) don’t think of her as an attorney. They think of her as an industry spokesperson and advocate.
What This Means For You
This translates into a tremendous opportunity for you. Right now there is a group in your target audience just waiting for someone to stand up and help them. These folks want and need leadership. You simply need to do a little digging, find them, and jump right into the fray. Get out and be an advocate. You will raise your profile and your business will grow as a result.
Here are Three Additional Resources You Must Explore:
The most important people in our business lives are our clients. Who and what they invest in can be telling. You need to pay careful attention to their financial activity particularly related to their legal needs. This article is a powerful reminder of that.
This is a problem I see with just about every lawyer. Their fees are way too low. This article will help you gain the confidence you need to raise your fees and make more money.
Before you become an industry advocate you must understand the needs and desires of the people in the industry. This article will help you get inside quickly.