Despite changes to the legal landscape, client complaints are rising at an alarming rate with detrimental effects on growth opportunities, confident client acquisition and profit improvements.

Yet profits can be improved when the overlooked correlation between client complaints, client attraction and profits is understood.

Relevant data shows highest complaints in areas where clients are more able to complain.  It is a given to most people instructing a solicitor that the person handling their matter has the necessary expertise to resolve their legal issue, hence lower numbers of complaints in areas of expertise..

However, clients who find themselves in unchartered waters of legal matters and who do not have their expectations managed, focus on areas where they have knowledge, experience and expectations.  They can confidently complain about speed and efficiency of handling, communication and costs/value for money.

The following data set clearly shows clients’ areas of strength when complaining.

Complaints Data
2012/13 2016/17
Progress 30.57% 37.89%
Costs 16.66% 16.28%
Communication 34.40% 35.13%
Total 81.63% 89.30%

Source: Legal Ombudsman.org.uk

It is the three key areas of progress, costs and communication that consistently sap law firm profits and management time.

It is no coincidence the majority of firms are finding their net profit margins are falling.

Trend in UK net profit margins
2012 2017
Top 10 37.1% 36.9%
11-25 26.1% 27.7%
26-50 25.5% 25.2%
51-100 23.7% 23.0%

Source: PwC Law Firms’ Survey 2017

Whilst the percentage changes are small they serve to demonstrate law firms are mostly growing through organic growth.  Proactive, strategic growth that is making a significant growth contribution to profits is not evidenced.

Adding to the bleak outlook an equally disturbing statistic reveals lawyers suffer the third highest level of work related stress.

With Managing Partners facing pressure to deliver on strategy and satisfy the call for higher PEP the squeeze is most certainly felt.

Where there is a worry about panel retention, attracting a consistent flow of ideal clients for each area of law and improving the overall profits of the firm it can be challenging to know which strategy will yield most.

The cost-effective solution

Where a high and ever improving standard demanded by corporate, commercial and personal clients and greater internal efficiency is needed as well as a capping supervision and management time there is one very cost-effective strategic solution.

A solution that is overlooked yet, the results in terms of operational efficiency, compliance, branding, marketing and business growth are remarkable.

When I am asked why more firms do not use the solution, my answer is simply because their focus is on other areas and they momentarily overlook the obvious and most cost-effective opportunities.

The opportunity starts within an effective file review system.

An effective file review system does not focus on reactive corrective actions.  Instead the focus is on proactive and strategic improvement.

The majority of firms view file reviews whether they be for compliance, quality assurance or adherence to client SLA’s as a costly overhead.  They are not.

Whilst that obvious, linear thinking view can be understood, scratch beneath the surface and a wealth of opportunities exist.

Law firms have a golden ticket opportunity for evidence based, firm changing improvements.

And an opportunity for broadly administrative file review work to be cost effectively repurposed.

Only a fool would postulate at this stage and without evidence the monetary savings to be derived.  However, I can confidently say the savings are significant.  All that is needed is a slight change to your existing system and an understand of how to use the results to support everything your business stands for.

In 2016 I published an article on the 66 hidden benefits of file reviews.  Each benefit still stands true today.  When you've finished reading this article, you can find the hidden benefits here.

The overlooked opportunities

Whilst your firm may be in the fortunate position of having zero client complaints, or grumbles, and has no need to eradicate let’s conservatively say 80% of the stated 89.3% of law firm complaints, your interest may be in ensuring all your fee earners perform consistently to the same high standard as your highest performer… the starting point is an effective file review system.

Perhaps there are repeating non-conformances and irrespective of fee earners being trained, the non-conformances are still evident.

Perhaps, despite an excellent tender, panel selection is not as successful as you would like it to be.  The answer lies within your file review system.

Departmental cross referrals should happen, but don’t, certainly not as frequently as you would like.  There is a basic human trait that limits cross referrals.  Again, an effective file review system gives lawyers confidence to cross refer.

If you want to grow individual teams your effective file review system dovetails with relationship marketing and preeminent trusted adviser/expert positioning strategies.

An effective file review system is the vehicle on which your transparent marketing sits.  Strategic business growth and marketing strategies are beyond the scope of this article save to say that you will be able to demonstrate your high levels of client care.  You will be able to contrast your effectiveness in progress, costs and communication against the disturbing and disappointing trends.

When your file review system is effective, your expertise and every team within your firm can become the only choice for your ideal clients.  You will stand head and shoulders above your competitors – corporate, commercial and personal.

The overlooked opportunities for law firms are boundless.

If you are open minded and curious to know how much overlooked opportunities may be costing your firm, then please use the contact form below to arrange an initial conversation.

Gail Biddulph
About the Author

Please do share this article or any others from this site.  The only rule is you leave all the links intact and give credit to the author and include the following bio; Gail turns overlooked opportunities into profits.  She’s dedicated her career to solving problems and fixing businesses by quickly identifying patterns that restrict business growth.  She has a wealth of experience transforming law firms.  Her clients range from small businesses to large corporations.  And when she’s not working you’ll find her riding her motorcycle, travelling and reading.