When it comes to buying legal services, this proverb is true
Those with good French pronunciation say Plus ca change plus c'est la meme chose. Those like me say The more things change, the more they stay the same.
It's timely to ask whether this proverb is true for the factors that drive decision-making by clients of larger law firms? We are asking – and seeking to answer – this question as the COVID-19 health and economic crisis grips the world.
Some background
First, a technical word for readers who are curious about our statistical methods. Since beatonbenchmarks research started in 2003 we've largely used the same set of independent variables in our measurement model. Our work shows these attributes explain more than 85% of the outcomes we measure, i.e. the dependent variables. These include whether a client considers a firm, the perceptions of the value they receive, the quality that is delivered and their propensity to recommend a firm. In other words, the attributes influence the outcomes. They are the levers a firm can pull to improve outcomes for their clients, as judged by the clients themselves (e.g. value for money) and themselves (e.g. getting into a prospect's consideration set).
The chart represents our most recent factor analysis of the attributes we measure. You can read more about what the four groupings mean and how factor analysis is practically used here on Research. Reveal. These 13 attributes (6 in the Client Focus factor, 5 in Expertise and 1 each in Fees and Delivery) are the attributes we used in both 2009 and 2020.
This means we can reasonably make a comparison between the two studies.
Comparing 2009 with 2020
Here's how our findings in the depths of the GFC in 2009 compare with the months immediately prior to the world realising that Corona would cause a recession, i.e.October 2019 to January 2020.
Comparing the attributes that drove clients's consideration in 2009 with those in 2020, we found the most and least important were the same in both years.
The most important four were Reliability, Responsiveness, Understanding your business and industry and Ease of doing business with.
The least important three were Fees, Friendly/strong rapport and Innovation.
Counter-intuitive findings?
It may seem counter-intuitive [1] that Expertise doesn't feature amongst the most important and [2] that Fees ranks in the least important drivers of consideration. Both findings can be explained as follows:
Only clients of larger firms are measured in beatonbenchmarks. The buyers of their services are by and large well-informed, so they know the overall technical expertise of large laws firms is, comme ci comme ça, the same. There are nuanced and granular differences, but a survey like beatonbenchmarks does not detect these. Please note, Expertise is not unimportant and ranks in the middle of the attributes, making it a 'ticket to the game' at the consideration stage.
During the consideration stage of buyer behaviour Fees rank low down because clients are making a short list of a few firms. Our research shows that at the time a client chooses a firm, i.e. makes their final decision, Fees move into the top two or three drivers that determine the successful firm.
Looking forward into the looming recession
If the impact of the 2008-2009 recession on law clients' buying patterns is repeated in 2020-2021, then beaton expects the importance of Client Focus factor (top left in the chart) to remain critical, perhaps even more so, to being considered.
Fees (bottom left in the chart) will remain relatively unimportant overall. But, we expect there will be even greater price-down pressure on routine and commoditised services. This will be driven by clients AND by firms dropping prices to try to hold share against similar firms and tech-enabled providers with lower cost bases. Prices for complex work types, on the other hand, will hold up if firms communicate and deliver value with superior CX.
That's good news! But only time will tell.
A future post will examine whether clients' future buying intentions changed as a result of the GFC – and examine whether it will be different this time.
More related to this topic
It is commonly accepted that excellent CX supports growth, and poor CX the opposite. What is less well understood is this: Clients will pay more for excellent CX.
In this interview George Beaton re-states the 'incontrovertible evidence' that cost consciousness plays a greater role than price in how clients perceive the value they receive from their law firms.