Welcome back to A Legal High. In this episode, Graham Seldon, is joined by George Beaton and Jon Huxley from Australiasian consulting firm, beaton. George and Jon share their insights on CX for legal firms including:
- The four phases of CX
- How clients are happy to pay more for a great client experience
- The top 3 drivers of client satisfaction
- The role BD & M play in bringing the client voice back to the firm
- Most importantly, how to simplify the CX process
About our guests, Dr George Beaton and Jon Huxley
George has guided beaton’s clients through a wide variety of strategic decisions in his 30+ years as an adviser and researcher.
His background in business school teaching combined with his work in professional services firms, public and private companies, universities and governments gives him deep insights into the challenges and opportunities that leaders and their organisations face.
Jon’s passion is in helping beaton’s clients deliver profitable growth for their businesses.
He is a recognised client-facing specialist and business development adviser for professional services and corporations. Jon’s experience covers strategy and planning, client engagement, process improvement, leading and delivering training and development programmes, coaching of client-facing teams as well as establishing and leading key client programmes. Jon is passionate about helping business leaders identify and improve the critical issues and opportunities in their business to achieve profitable growth.
Transcript – The Law Firm CX FactorGraham Seldon: [00:00:00]
Welcome back to A Legal High – the podcast that takes a high level view of the opportunities and challenges facing the legal sector and for the BD and marketing professionals who work in it. I’m your host, Graham Seldon, and I’m a Director here at Seldon Rosser. We specialise in recruiting, business development, marketing and communications professionals for law firms across the Asia-Pacific region.
Graham Seldon: [00:00:24]
My guests in this episode are from Australasia’s leading leadership consulting and research firm beaton, a name synonymous in the legal profession for providing key benchmarking data and client insights, and a suite of advisory services aimed at maximising service excellence for law and other professional services firms. It was with great pleasure that I was joined by the founder, George Beaton, and their New Zealand partner, Jon Huxley. They agreed to come and speak to me about client experience or CX, as it’s known in the legal profession, following a major survey of clients. During our chat, they shared insights into the four phases of CX, how clients are happy to pay more for great experience, the top three drivers of client satisfaction and the role that BD and marketing can play in bringing in the client voice back to the firm. This really became masterclass in CX. So take a listen and take some notes.
Graham Seldon: [00:01:20]
George and Jon, before we launch into talking about your research into CX in the legal sector, can you tell our listeners a bit about beaton and the work that you do?
George Beaton: [00:01:30]
beaton has been around in professional services and started in legal sector, Graham, way back. And the last 20 years have seen us become progressively a voice of your clients market research house, where we gather data about from clients of clients, about firms, about their performance, about their brands, about their competitiveness, about their clients and their clients interests and needs. And we package this up and play it back to firms and then use it to inform their strategy, resource allocation, marketing, BD, CRM and so on, and not the least of which is their pricing strategies. So that’s the business of beaton today.
Jon Huxley: [00:02:21]
The other bit that I would add to that is (I’ve been with been for only nine months, I was a client of beaton long before I became a partner and beaton). But specific pieces of research like the ones we will discuss today, Graham, into client experience, exciting pieces of research, in my view, very valuable pieces of research. So this particular piece that we talk about today, 592 respondents have given their view on the topic of client experience. And I think a really valuable piece of work.
Graham Seldon: [00:02:55]
The term CX for client experience is subjective, really, and hard to quantify. How how can you measure it?
Jon Huxley: [00:03:06]
Yeah, it is subjective, you could say that. My view is it’s a very simple term in many ways. What it asks in very plain English is how do your clients experience you and your firm? Traditionally, perhaps, that was usually defined more narrowly as the services/expertise that you offered your clients. However, in our view, savvy firms are increasingly regarding client experience, as every interaction, maybe every touchpoint that the client has with the firm. Our research that we talk more about today breaks that down into four phases. So client experience is broken down as onboarding and scoping phase, the main work phase, the outcome/deliverable phase and finally, the ongoing relationship phase. So firms now have the opportunity to examine their own client experience across those four phases.
Graham Seldon: [00:04:06]
George Beaton: [00:04:06]
Yes, it is a buzz word in the sense of those who find new language, a bit of old wine in new bottles. But it is profoundly different than that description of wine in bottles suggests, because if you go back a couple of decades ago to when I first started teaching in business schools, there was a clear distinction between consumer marketing and what used to be known as industrial marketing. Consumer marketing today we call B2C an industrial marketing today we’ve called B2B. And up until very recently, it was believed that B2B decision making, in other words, decision making by the clients of professional services firms (unless they were consumers in family law, for example, or individuals in criminal law) but the corporate and commercial clients of law firms were B2B decision makers. And B2B decision makers was believed to be entirely rational. In other words, objective, hard fact based and made on the decision of those “who knew” “I know about this firm”. What we now know from research, which is extensive and not limited to legal or to professional services, is that B2B services are as much purchased on how I feel about the firm and the intangibles as how I expect the firm or I know the firm will do for me. So how do I feel as a consumer when I buy a new Audi motorcar? Well, I feel I’m successful. I feel good. I feel proud. Oh, and by the way, you know, it’s got this resale value in that performance if I want to accelerate it. We know that’s true now in B2B services. And so the feelings of people, even those steely eyed, hard nosed general counsels of major corporations are people, and they have feelings and those feelings influence their decision making. And so a very big part of the CX understanding and research and movement is to enhance the feelings that people have on their journey through the phases that John has described, as well as, of course, the technical expertise and the documentation and the other hard aspects of a professional advice.
Graham Seldon: [00:06:53]
And what I found interesting from the research was that you actually assert that clients are prepared to pay more for that feeling, that sort of excellent service. But talk us through the value perception that drives the outcome.
George Beaton: [00:07:09]
We don’t assert that, Graham, with respect. The clients in the survey, to which Jon has referred all 592 have told us this. So, it’s them answering questions from their perception, from their position in confidence to us. So it’s not our interpretation of what they’re saying. It’s our reporting of what they are saying. That’s a really important point to make here. And yes, there is a segment of clients who will pay more willingly, knowingly, often for excellent service. And through our beaton benchmark research for fifteen years we’ve known that, but we’ve never known it with the granularity and the precision that we know now from this recent piece of CX research. And it kind of makes sense when you deconstruct it this way. Graham. When you drill into the mind of a corporate client, whether the company secretary, a CFO and in-house lawyer, a business owner, when you drill into their mind and say, let us understand how you perceive the value you receive from a law firm or a legal practitioner, they are doing two things in that perception and they’re not necessarily conscious. I’ll come back to that point. But they examine the balance between what I’m getting or I expect to get or receive, by way of the benefits from drawing this contract, for example, and what I pay or expect to pay, because you’ve told me that’s the estimate. That’s the quote by way of fees. So there’s a tradeoff there between what I’m going to get and what I’m going to pay.
George Beaton: [00:09:10]
And that tradeoff is moderated in their minds by this phenomenon that we discovered many years ago and named cost consciousness. And cost consciousness is a term which we coined (you won’t find it in the dictionary yet this way) but it is ‘How do I know what you’re spending my money on?’ ‘How do I know who will do this work?’ ‘How do I know whether there isn’t a more cost effective way, a faster way, a better way to do this work?’ ‘Have you shown me about a group of options and said the president cons of each of these. And this is what we recommend But on the other hand, you could do it this way.’ That delivery mechanism, that optioning for clients is cost consciousness. So it’s a complex tradeoff here. And what our research quite clearly shows is that the biggest driver of perceived value, if the quality is there and the documentation is there, if the advice is proved to be correct, the biggest driver of value is not the quality is not the price, but it’s the cost consciousness. Because you’ve given the client the mechanism for understanding. And so that’s where and when we now think about it from a CX perspective, is those benefits are both what you’re going to do for me and how I’m going to feel as a result. Do I feel important? Do I feel frustrated? Do I feel angry because it’s late again?
Graham Seldon: [00:10:47]
So it’s like an ease of doing business as well. I mean, I know that sort of dumbing it down.
George Beaton: [00:10:51]
No, it’s dumbing it down at all. It’s absolutely right. It’s one of the things we measure. It’s the ease of doing business with you. You know, in non COVID times, do I always have to come to your office to see you? Or do you come out of your office to see me, to make it convenient for me? You know, can I reach you at six o’clock at the end of the day if I need to? Or do I just get your mobile message bank? So, yes, it is.
Jon Huxley: [00:11:28]
Just to amplify what George said further and really kind of puts in some hard numbers around this as to why his client experience important. And a number of firms are redefining traditionally what they might have termed business development and marketing as overall client experience because client experience is proven to win more work for the firm.
Jon Huxley: [00:11:58]
And here’s some stats that fascinate me. So clients who are in a position to say they have an excellent client experience, a nine or 10 out of 10, tell us in our research there are 2.6 times more likely to pay more than they currently pay and in turn 6.3 times less likely to want to pay less than they currently pay. So it’s credibly strong rationale for firms placing specific focus on this CX area. And whilst we don’t have time to share every single step that we learned in the research, Graham, this is just one more that I find is very juicy and I can’t resist sharing with you. Clients are 3.4 times more likely to consider your firm for additional services if that CX is excellent. So whilst every firm I’ve ever come across worked in or worked with, has grappled with, ‘how do we cross-sell?’ I think that statistic just tells us exactly how we cross-sell. So which is just do an excellent job of what we already are doing at the moment.
Graham Seldon: [00:13:04]
And of course, there’s opportunity that the issue that we’ll get on to later is that if their cross-selling, they’re expecting that whoever you’re referring them on to in the business, in the law firm is going to deliver exactly the same, if not better, client experience than they’ve already had. And so we’ll touch on that later. I am interested to ask you, though, Jon, a question around the drivers of client satisfaction, because in your research, you say that you recommend that lawyers get to know the top three drivers of client satisfaction. And so I just wonder, are you able to share with us what the likely top three are going to be?
Jon Huxley: [00:13:41]
Yes, absolutely. And these are consistent over time. I think George will confirm and I’m sure that expertise in my particular area of need is consistently ranked highly important by my clients. And the bit that I emphasize there is expertise in my particular area of need ie the client’s. Secondly, deep knowledge of my business and the industry in which we operate. Again, the client’s business and industry. Why I emphasize those two points is because I think that’s often overlooked. Knowledge of a client’s business, knowledge of their particular area of need, requires research, requires empathy, it requires curiosity, it requires a desire to understand their world as well as your own. And I think that’s always something the good firms aspire to do more and more of. And then comes service attributes very close behind those top two things. Things like responsiveness, reliability, and lower down is price and fees.
Graham Seldon: [00:14:47]
It’s interesting that you talk about industry sectors there, because we’ve had previously on this podcast a chap called Darren Milo (ex Herbert Smith Freehills), who is an industry lead specialist. Herbert Smith Freehills, was probably one of the first firms in the region to really go down the path of having a BD focus on industry. And we are seeing very much in the marketing BD community that sector specialists are now on the rise for that very reason that clients are expecting that their lawyers have a deep knowledge of sector. So it’s good that it also came out in this research. It’s very validating for BD directors who were arguing in their firms that they should have more BD specialists.
Graham Seldon: [00:15:34]
Can we talk about culture? Because I’m interested to know how law firms can embed a high client experience culture. You know, what does it look like and who takes the lead on this change to a high CX culture?
Jon Huxley: [00:15:55]
I think culture is indeed the key word. Graham, as it always is, with areas such as this that require change and require consistency over time. Certainly the firms that we’ve worked with and observed as beingsuccessful in putting a high client experience culture have a number of things in common. Like any culture change, a CX culture comes from the top of the organisation. In our view, CX is seen as a key strategic priority. It’s seen as a point of difference in the market. It’s not something that’s outsourced to a team called BD or CX or Marketing. It sits central to the organisation and particularly at the top, the leadership table. Excellent CX is therefore defined and measured at that leadership table.
Jon Huxley: [00:16:52]
I’ve enjoyed working with a number of organizations since I’ve joined beaton where they live and die relentlessly by what is the client’s voice. What are the clients telling us? What’s the client feedback? Are we are we measuring what our clients are telling us, particularly those key clients? Communication is as to why client experience is pervades the organization. It’s frequent, it’s ongoing. And excellence is celebrated, I think, as well. Good examples are put on a pedestal. So I think the story I often tell is when I join a new organization, the question I often subconsciously ask myself is ‘who do I have to be like to get on around here?’ And I think certain individuals in organizations are put on pedestals. I think the ones that are successful in the CX area make a proactive attempt to put those individuals, or teams, on pedestals that really do excel in this area of CX. The final point I would make is accountability. I think all of that that I’ve just described sounds nice, but ultimately accountability for CX sits with everyone in the organization. So not only is excellence celebrated, but underperformance is addressed and where a client is unhappy, it is relentlessly solved such that the client becomes a happy client as soon as possible.
Graham Seldon: [00:18:21]
And George, forgive me for picking on you on this point, but you’ve been around possibly longer than most in this area of sort of advising law firms in the region. In the last 20 years do you think genuinely that they’ve got better at this? Have you got a sense that they really now do understand clients?
George Beaton: [00:18:43]
You can say 30 years, Graham, and I won’t be offended.
Graham Seldon: [00:18:48]
I didn’t want to!
George Beaton: [00:18:48]
You could nearly say 40. Some have, and it’s quite a large number of some got a lot better to brilliantly better. But I would argue that from our observation, our measurement of firms large and midsize and small, that a lot haven’t. And many of those haven’t got it. They are still product push, black leather lawyers. “I know and I’m telling you” style of operator from the, you know, the good or the bad old days of the 60s, 70s, 80s and into the 90s.And you see this repeatedly.
George Beaton: [00:19:44]
We see tens of thousands of comments. This is verbatim comments coming through our surveys and the number of comments which refer to, you know, the dodos, the firms or the practitioners – they are about individuals here, you know, who are Dickensian, really pejorative language. And these are angry people, clients who are reporting why they are angry. And it is about lack of client focus, lack of empathy, lack of rapport with the client, lack of understanding the client’s a human being, too, rather than, you know. forgive me, but, you know, a source of fees, because they’ve got deep pockets. That is wide, wide, still phenomenon.
George Beaton: [00:20:43]
On the other hand, and a very positive, I stress, there are many firms and individuals who got it. And increasingly we see the kind of young millennials who are breaking away from larger traditional conservative firms and setting up on their own because they want the freedom to be client centered. And that means many things, not not simply how they relate to the clients. It means how they price, how they deliver, their use of technology, their use of of gig working lawyers rather than all employed lawyers and their attitudes towards leverage and so on. So we are seeing a sea change. It has been slower than I forecast when I wrote my first book back in 2013. I fully acknowledge that. But it certainly is evidenced here and in other parts of the common-Law world with which I’m familiar.
Graham Seldon: [00:21:52]
So, George, it’s also true to say that in the last 20 years since I’ve been in Australia (not claiming this, by the way) it’s been an enormous increase in business development and marketing professionals in law firms. What role do you think they should be playing or can play in CX?
George Beaton: [00:22:13]
Quintessentially, they are the conscience and the voice of the client inside the firm. And so the gathering of information both from those practitioners who deal with clients and others support staff who deal with clients. The marshalling of that information, the interpretation of that information, the collection from multiple sources, multiple sources of intelligence, how clients are feeling, whether matters are properly debriefed, whether wins and losses on tenders are properly debriefed, and particularly how all that information is marshalled and brought into a database that can be tracked and interrogated. That is the role, a critical role, the voice of the clients inside the firm – the champions of the clients. And you know, the movement to call Chief Marketing Officer as Chief Revenue Officers I think is well in meant and well targeted, but poorly understood because, you know, if you are the champion of the client’s well, the clients are the people who produce the revenue, then surely your job should be to marshal the resources of the firm (including the partners and the lawyers) to serve those clients and to assist in winning those clients. In which case, if that’s your role, you are the Chief Revenue Officer. Now, that is strongly resisted by the firms where I’ve discussed it, but conceptually, that’s what it is. Who else has oversight? Oh, the Managing Partner or the Chief Executive? Well, hang on. They can’t do this all themselves. They have to delegate. To whom do they delegate? All the partners? Will, that doesn’t work! So, I think one of the reasons for this growth, you see, is the conscious or subconscious recognition of this role and the importance and the value that can be added to both the clients and the firm through people with these skills playing that role.
Graham Seldon: [00:24:24]
And Jon, before you joined beaton as a partner, you had a career, an in-house career, as a very senior business development and marketing professional both in Big Four and also engineering. What are your thoughts on what role an internal BD and Marketing person can play in CX?
Jon Huxley: [00:24:44]
What George said? I think, in addition, a champion for change. But in a CX context, I would look for people who could credibly coach and advise, senior client-facing members of the team to be highly effective in front of their clients with their client relationships. They’re hard skills to try to bring it to a business, they’re certainly hard to grow as well, but not impossible.
Jon Huxley: [00:25:27]
I think driving the client feedback process, that George touched on, but making sure the client feedback process is a number of things. It’s simple. It’s of value to both clients and the firm and that it’s not optional, would be it. And then the final point, I think, is probably the most important.
Jon Huxley: [00:25:48]
The final summary point I would make around the role of BD Marketing (and I touched on this earlier) is a pitfall for some organizations, I think is everything we are talking about is the role of BD and Marketing. It is not. So client experience is not something that sits in an annex called BD and Marketing. It’s something that sits and pervades the 1000 or 10000 people that exist in that business. And BD Marketing are thereto drive support, jump in, change coach advice, whatever the term is. But it’s not their role.
Graham Seldon: [00:26:26]
The C in CX say the client in the CX – it sounds obvious – but to law firms they would think that would be general counsel. But but I think you’ve written about how law firms often neglect the rest of the C Suite in organizations. Is that true? I mean, tell me about that?
Jon Huxley: [00:26:50]
Well, it seems as though our research tells us that it is true. That the economic buyers versus the technical buyers, (both Miller Heiman terms), something interesting for us to reflect on. In a legal context, at the risk of generalizing, a technical buyer is probably the GC ie the person who procures legal services and makes decisions about do I engage with firm A or firm B? The economic buyer is, again generalizing, more likely than not, somebody that sits at the C suite level, perhaps even the chief executive of that particular organization. What our research tells us is the C Suite ie those economic buyers are a neglected area, particularly after the onboarding and scoping affairs of client experience.
Jon Huxley: [00:27:52]
So the research tells us, put bluntly, quote unquote, now that the matter has started, we just need to work with the in-house legal team. We don’t need to worry about the C suite. That is a glaringly missed opportunity. You don’t want to find that the chief exec is feeling a little bit neglected, frustrated. whatever the term may be, when you are three months post the matter closing.
Graham Seldon: [00:28:19]
Also, is it not a dangerous place to be if you put all of your eggs into that one relationship? I mean, General Counsel move from one organization to another. So one would imagine if you’re not spreading the relationship across the C suite, you’re actually undermining the stickiness of your relationship with that client.
Jon Huxley: [00:28:39]
Yes. Absolutely. And also, you are not really doing the best possible job you can doing some of the things that we talked about earlier, which is understanding the business. You are understanding a very narrow part of the business as opposed to understanding the business’s broader context by not engaging with a variety of c-suite members.
Graham Seldon: [00:29:02]
Can we talk about client feedback because one of the things that you talk about in your research is that you say that to ensure optimal client experience, you would recommend real time feedback. I mean, I know some a lot of a lot of BD Marketing people would say to me that their lawyers that want them to do any feedback at all. So, how does real-time feedback work? Sounds onerous.
Jon Huxley: [00:29:35]
It sounds onerous, but it ought not to be. The proliferation of organizations who rightly are measuring employee experience should maybe consider whether we are measuring client experience with the same level of rigor. And our view is you should be measuring both. Happy clients, happy people or happy people, happy clients. I think very interchangeable terms. Our view would be real-time feedback is the only opportunity for you to be able to confidently say within your business ‘Have we got happy clients or not?’
Jon Huxley: [00:30:20]
We know that asking for feedback is a major influence on whether a client relationship is strong or not. We know that resolving issues has a major influence on client relationships. So doing so in a real time as it is an absolute imperative in our view.
Graham Seldon: [00:30:40]
Who should be doing it? Should the lawyer be doing it while the matter is going on, or should the BD Marketing people should be doing it?
Jon Huxley: [00:30:49]
My view is it should be centrally run. Don’t confuse that statement with ‘that’s all just about some central body sending out surveys’. A feedback process ought to be personalized. It ought to be a mix of quantitative and qualitative research. So the client does have the opportunity to sit down with a human being to share views, as well as take part in more quantitative feedback methods. So who does it depends on how much of a qualitative versus quantitative feedback is done. But, I guess, to come back to my earlier point, it shouldn’t just be a person sitting on the third floor who sends out surveys every three months.
Graham Seldon: [00:31:36]
George Beaton: [00:31:36]
Can I add to that, Graham. Yes, I agree with everything Jon said, and I would add, seeking feedback doesn’t come naturally to most lawyers. And it is very uncomfortable for some, while others are naturals. And if the gathering of feedback by the practitioners is not inspected, and only expected then it ain’t gonna happen, certainly systematically, and certainly not from clients where the individual senses there’s a problem and wants to avoid hearing about it. So, what I see is the central coordination is the regular reporting, nurturing, coaching by marketing and BD of practitioners to gather that feedback in real time, i.e., how do you think things are going at the start of the meeting? Were you happy with the document at the end of the phone call, and not in a, you know, detailed, administratively demanding way, but reporting, yeah, I talk to five clients this week and this is what I heard. And you can imagine the cumulative effect of that in a firm. I know a small, I think I got 14 lawyers, firm does this and it is remarkably successful because that is then all collated by the part-time BD person and circulated. And so the firm is learning all the time from what its clients are saying – very simple.
Graham Seldon: [00:33:18]
And it’s so simple because one of the things I was interested to ask you is that we recently did a roundtable of senior client relationship managers in law firms and ask them how the COVID response, with people, lawyers working from home, and having to build relationships with their clients who were also working from home, you know, how was that going? Had it effected their client relationship? And interestingly, quite a lot of them said that whilst it was proving to be a lot easier to reach clients and a lot easier to build relationships with clients because we’re all in this together sort of mentality, what was interesting was that a lot of lawyers instinctively went to what’s the process for doing this and should we set up a committee to talk about it? So I’m interested to know from you, how can you make CX more instinctive and less procedural in the legal industry?
George Beaton: [00:34:14]
I’ll jump in and just offer a view – from the top, by example. And the other side of the CX’s coin is EX -employee experience. And, you know, it’s not do as I say, but do as I do. And unless the managing partner and senior leaders of the firm create an employee experience that is excellent and aspirational for them to create for their clients, it ain’t gonna happen. So, one of the things we preach and have written about haven’t yet researched is, you know, is if CX is going to be sustainable and continuously improved, it’s got to be driven by EX. So it goes from the inside, out.
Jon Huxley: [00:35:02]
And from the top is the piece I would pick up there as well. That the why are we doing this is consistently, relentlessly communicated across the organization. Certainly in the early days of any CX program, as we all know from our friend, Simon Sinek, people buy why or what. And the why of CX is more repeat business, lower business development costs, less bidding, premium pricing, improved cross-sell opportunities. They’re the whys. The hows and the what’s not comes next. But he is the whys.
Graham Seldon: [00:35:37]
It’s certainly fascinating and will be fascinating to regroup in a year and to see what impact this has had the working from home, the flight to digital communication, that the real change that’s happened in the legal profession in three months, that probably would have taken another three to five years. It will be interested to see how the clients feel about how this has impacted on the relationship for for good and bad. It’s been it’s been a fantastic conversation.
Graham Seldon: [00:36:11]
I’m very, very happy that you’ve both been able to come on and talk us through your research. You’ve given us a lot to think about. But I think the key takeaway for BD and Marketing people in the profession when talking to their lawyers is this does not have to be complicated. This can be really, really simple. And that’s great to know. Thank you so much for coming on to A Legal High. It’s been great to have you.
George Beaton: [00:36:35]
Thank you. And thank you, Graham. And to my colleague Jon.