Word of Mouth Rules Again

According to the Church of the Customer Blog, a new Nielsen study confirms, once again, that word of mouth referrals are still the most trusted form of advertising out there.

This news is about as groundbreaking as a new AMA survey that reveals cigarettes are hazardous to your health and licking electric fences can cause severe discomfort. While we all appreciate the confirmation, and I'm definitely grateful to McConnell and Huba (publishers of the awesome CotC blog), it strikes me as another one of those why-did-Nielsen-even-need-to-bother pieces of research.

The real question is: How do you get/increase those word of mouth referrals? 

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Recycled Research

From a piece of research done in 2005 by the folks over at LexisNexis Martindale-Hubbell, which I think is still highly relevant, here are a couple of tidbits that should always be borne in mind.

In the initial hiring criteria for outside counsel, Lawyer Expertise ranks as extremely important by 78% of the respondents. Another 10% rank it as important. That's a total of 88% of the respondents ranking it highly, and by far the most important component. Client Service sits at 12% ranking it extremely important and 38% important. Easily second, but by a very large deficit.


Catch this, though:

In the criteria for allocating additional work, 56% rank Client Service as extremely important, with another 24% ranking it important. Lawyer Expertise? 43% rank it as extremely important and 25% as important.


Hmmm....What a shame to lose out on additional work when getting it was fully within your grasp!

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Inside Counsel Magazine's Top 10 Client Service Best Practices

Hot off the presses, the newest issue of Inside Counsel just arrived in my mailbox. One of the articles is entitled "Top 10 Client Service Best Practices"  (subscription needed). Here they are in very summary fashion:

*Be accessible
*Respond promptly
*Learn the business
*Don't say 'no' (i.e. offer alternatives)
*Listen to feedback
*Empower your clients (teach & give them information)
*Reduce law firm costs
*Communicate clearly and directly
*Get to know your clients
*Have a customer service-friendly attitude


No surprise punches in this list. I've written previously about these points here.  They really are the stock answers. That's not a knock on Inside Counsel magazine. It's really a knock on us that we need to keep hearing it over and over again.

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Referencing Jim Hassett's Post

What a great post about being seduced by success!! Thanks, Jim. To give you a teaser of what he writes, here you go:

"You may be so busy billing hours that you won't have time to read Robert Herbold's new book Seduced by Success. That's too bad, because it's probably a sign that you need to spend fewer hours billing and more hours planning for the future."


And he goes on to explain three primary destructive behaviors:

"The first destructive behavior is "lack of urgency...." Some law firms are aggressively increasing efforts to satsify current clients and find new ones. They are taking business away from the conservative firms that are acting as if the world has not changed since Nixon left office....

The other two destructive behaviors Herbold describes are are "a defensive attitude toward any kind of new thinking" and an "entitlement mentality." Do those sound familiar?"


By the way, he's referencing the new book by Robert J. Herbold, Seduced by Success. I highly recommend reading his post. I'm also going to pick up the book.

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Law Firm Survey Results Out

Patrick J. Lamb does a nice job of summarizing the newest research from Inside Counsel on corporate counsel's latest round of answers as to how law firms are doing. There's more than his post indicates but it hits the items of interest to most of us.

I'll summarize from a law firm client's perspective: not great.

Here's the clip I find most interesting.

Only 19% of outside lawyers give their outside firms an "A" for overall performance (down from 21% last year and 22% in 2005). Over 60% of the law firms give themselves an "A".


Can you say "disparity'?  And why the dropping numbers with all the focus on client service? My guess is that it has something to do with rising expectations. But then, I picked my Washington Huskies to go all the way last year in the NCAA tourney. (A tourney they didn't even get invited to).

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To Initiate (or not) a Client Service Research Program

There are some steps to bear in mind before even starting on a client service initiative. While not exhaustive, these provide some major steps to consider:

1. Assess the firm's commitment to seeing the process through to completion. If you're not completely committed, save yourself the time and money and stop right here.

2. Determine what the goals and scope of this project should be. Different goals are perfectly acceptable, but make sure the following actions move you towards whatever your goal is.

3. Determine who should do this. Should it be done internally or hired out to a consultant. If the latter make sure you're hiring somebody familiar with the legal industry and qualified. Those tempted to allocate this work based on the buddy system will sink like a chain gang in Morecambe Bay.

4. Conduct the research. Start small, sort of like testing a small patch of fabric in an inconspicuous place for colorfastness before spraying the entire suit.

5. Analyze the data you've received. Here's where an outside consultant is a great idea. They're less likely to distort the data.

6. If you've made it this far, you are committed to acting on the data. Actually, you were committed at the fourth step. Whether you like what it told you or not. To not act on it leaves you in worse shape than when you started, because your clients gave you input expecting it to be put to use.


Personally, I recommend not starting with this kind of a program, but rather starting simple: Ask your clients what things are most important to them. (Know up front that rule #6 still applies.) Two reasons for my recommendation:
1. You're not likely to pass a test if you don't know what you're being graded on.
2. It doesn't require a lengthy, possibly expensive research program.

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Client Service and Deductive Certainty

David Maister has an interesting post called Client Focus and the Halo Effect, especially for us philosophy majors. In it he addresses a book by Phil Rosenzweig about faulty deductions from dubious cause-and-effect relationships. Here's the short of Maister's response:

"He [Rosenzweig] doesn’t actually question the conclusion (or belief) that customer focus causes financial performance; he challenges the validity, rigor and logic of the various studies that purport to have proven the link."


Here's my thinking. Virtually all of life's useful arguments are in fact inductive (translation: the conclusion that flows from the premises is only probable), and lack a "Cartesian certainty." The fact is you can't really deductively prove anything interesting, besides some of the following gems:

* All unmarried men are bachelors
* 2 + 2 = 4
* If it's a square it has 4 equal sides


Properly speaking, Rosenzweig is correct. But if the rooster crows enough times when the sun comes up, I can either assume the sun causes it, or I can argue that it may have some other cause. Maybe the rooster swallowed a seasonally adjusted, battery powered clock radio that goes off at sunrise, thereby creating a mild shock which causes the rooster to crow. He probably also swallowed my missing sock out of the dryer.

I haven't read Rosenzweig's book. I'm not knocking it, because his points are legitimate. I've blogged before about strange thinking in business (here, for example). However, if there are enough companies out there that can tie in a customer focus with strong financial performance, I'm going to bet heavily that whatever other factors may actually be involved, client service excellence will probably be one of them. It's hardly a leap into the unknown.

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The Latest Round of Bravado or the Winds of Change?

Patrick J. Lamb has a great post on a recent "flash survey" by Altman Weil. The short story is that there's a tremendous amount of dissatisfaction by GC's regarding the latest round of salary increases for starting associates. No surprise there, but the report goes further in stating GC's are going to start looking at pulling work back from their primary law firms and look more seriously at second-tier firms.

I'm skeptical.

We've heard similar song and dances before from the GC's about pulling work. Many talk about it, but at the end of the day it appears they all wait for somebody else to do it. That's a shame. If those threatening action would actually take it, and if it results in firms starting to take a harder look at their client service approaches it could ultimately be a good thing.

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Client Service May be Extremely Profitable

I'm borrowing this post, lock, stock & barrel, with a few of my own comments, from Gerry Riskin's blog post by the same name.  Here's a small excerpt:

"The story is that a portfolio comprised of “companies at the top 20% of the the American Customer Satisfaction Index (ACSI)... greatly outperformed the stock market, generating a 40% return."


Lawyers being what they are, I suppose they needed some emperical "proof" to validate that claim. For what it's worth, this philosophy major was apparently more gullible. Busted logic or not, here's my reasoning: Happy customers are likelier to buy again. And be less concerned about price. And tell their friends to buy from you, too. It's the same idea behind a blog: let others do your marketing for you.

Conversely, companies that have lousy customer service are far likelier to irretrievably lose customers. The customers they do keep will view price as the driver, which means lower profits. And I'm not likely to brag about you. If you're a monopoly, and I have to do business with you, I still won't buy all that I could. Right now I could really use my own voice mail box, but I'm scared stiff to call Qwest and make a change. They're an absolute nightmare, and everything they touch turns to mold.