Clients use anywhere between 12 and 41 law firms, on average. Small and mid-sized clients use 12 or so. Some large clients easily go over 100 or more. Of these law firms clients use, only 10 are in the sweet spot—considered core by legal decision makers. This number drops to 5 at smaller clients. And even among these core providers, distinct differences can tell you whether or not your client relationship will stand the test of time.
First, let’s look at how GCs manage their outside law firms:
The Primary Providers
Clients turn to these law firms first when a new legal need arises. Clients consider these firms their most valued and trusted providers—and as a reward, these firms split the lion’s share of a client’s outside counsel spending. Clients rely on between 2 to 4 primary providers in total. Each wants to be the top primary provider. And with good reason: this is where the best, most complex, and highest-rate work lives.
Secondary Law Firms
While not in the primary seat, these firms still boast strong client relationships and receive a significant portion of external legal spending. In fact, the primary and secondary law firms combined account for 80% of a client’s total spending with law firms.
The secondary firm can be a great opportunity or potential risk. You can be auditioning for a primary spot – or be a fallen primary.
The Rest of the Law Firms
The last (and largest) group of law firms on a client’s roster are the firms where the relationships are the weakest. These are the firms handling specialized work (i.e., in highly specialized areas of expertise or geography-driven cases) with few points of leverage.
Success demands you understand the strength of your client relationships—especially the relationships you have with each of your most important clients. Your position dictates the best strategy for building stronger and better client relationships.
The combination of your positioning as a primary or secondary firm, and your client’s investment in your firm, drives your strength. BTI asked more than 650 top legal decision makers about where each of their law firms stands and who they recommend to peers—this tells you exactly where you stand. The analysis reveals 8 categories of law firms. These include:
BTI Power Elite
The 28 firms enjoy the absolute strongest client relationships; positioned for long-term organic growth and substantial inbound lead flow. These firms have the most primary relationships and are the first unprompted firms to be recommended to a peer. The BTI Power Elite have the best of both worlds—and these 26 firms have more of these relationships than any other firm—offering organic growth and inbound leads.
BTI Power Players
These 34 firms have a large number of strong client relationships—but not quite as many as the BTI Power Elite. The BTI Power Players are within shouting distance of the BTI Power Elite—with the potential to unseat Power Elite firms to gain more market share and clients.
Current relationships are strong and have the underlying strength to be much stronger. These 45 law firms can harness the skills around their strong client relationships and jumpstart growth to develop a larger number of the strongest client relationships.
The Celebrities are the firms clients love to recommend; their recommendation rates far outpace the number of core relationships these firm enjoy. These 9 firms garner exceptional mindshare and clients are inclined to use them for substantive work. Their challenge is to develop these clients into more business to earn the strongest relationships. You can see by the small number of firms in this group— this is a unique spot from which to grow.
These are the 27 trusted providers clients call in for special situations; these firms have more core relationships than 70% of all other law firms—but earn fewer unprompted recommendations. Clients see their role as specialized and targeted—the Special Forces law firms have the opportunity to build on this trust to broaden the relationship. But, like the Celebrities—success demands a strong dose of business development and gaining the coveted unprompted recommendation. These firms have more strength than most.
The SWAT Team
The team to call to get the job done; these firms have functionally driven core relationships, but an absence of unprompted recommendations. Like the Special Forces, clients know they can rely on these 9 firms—their challenge is to build these into ongoing relationships through a combination of client service and business development—often delivered hand-in-hand.
These 186 firms are the firms clients love to root for; they have the potential to rise through the ranks if they can increase their share of core relationships. Success calls for serious and systematic business development initiatives – this would include BD training for client-savvy partners, client service training for all other partners, and a healthy dose of client feedback to detail exactly where to improve performance, spot opportunity, and better bond with clients.
These firms are missing top legal decision makers’ radars when it comes to meaningful client relationships. They may be doing work but are in more of a functional or task-driven role. This can be a bit deceptive because a task at a large company can generate substantial fees—but they have a muted future. These firms can identify themselves as they will have high client turnover, high business development costs, and lower realization. The firms can start on the path to a stronger, more enduring relationship by targeting their best clients, getting feedback, embracing client service, and putting business development out front as a top priority—as the chances of new complex work finding its way to a firm in this group are low—even through RFPs.
Outperform Everyone Else
Firms who know the strength of their client relationships outperform everyone else. These knowing firms are the only ones who pinpoint the client development strategy best suited to their clients—and can drive it forward using the right skills at the right time. Everyone else has to guess.
You can assess the strength of your firm’s client relationships through BTI’s in-depth client feedback—and use it to improve client strength and revenue.
You can also see where you stand in the BTI Power Rankings 2019: The Client Relationship Scorecard—to be released August 1, 2019.
Based on more than 650 in-depth interviews with top legal decision makers conducted between March 2017 and April 2018.