Business development sometimes seems like an impossible task. Winning new clients, or generating new business from existing clients, isn’t easy. If you doubt this, check out in-house columnist Mark Herrmann’s excellent column, Nothing You Can Say Can Cause Me To Retain You (explaining all the strategies for trying to obtain his business that won’t work). The challenge of getting new clients explains why so many firms resort to effectively trying to buy clients, by luring lateral partners and hoping their books of business come with them.
But still, every now and then a law firm does get hired by a new client. And every now and then a law firm gets fired by an existing or even longstanding client (even though it’s not easy to displace incumbent counsel, especially if they’re decent).
Why do clients hire and fire their outside counsel? A new survey offers some answers….
Every year, the U.K.-based research firm of Acritas interviews thousands of general counsel and other in-house attorneys to get some insight into their use of outside counsel. Earlier this week, Aric Press analyzed the latest Acritas data in the American Lawyer:
The reasons that clients gave for hiring firms were old. The top three cited: subject matter expertise (37 percent); geographic presence (17 percent); a previous positive experience (15 percent). Cost issues placed fourth, mentioned by 11 percent.
Seeing subject-matter expertise at the top of the list makes sense. As Mark Herrmann explained, because most major corporations already have lists of approved counsel they are happy with, they’ll go beyond the list “if we need a lawyer in some obscure area of law — the escheat laws of Kansas, maybe — and we don’t know anyone else who practices in that field.”
It also makes sense to see geographical factors high on the list. If you belong to any lawyer listserv, you’ve surely received numerous referral requests, and those requests almost always mention the state or jurisdiction where an attorney is needed. The importance of geography is good news for firms with huge footprints, like DLA Piper and Baker & McKenzie. The elite NYC-based firms might scoff at the Starbucks or McDonald’s approach to providing legal services, but Starbucks and McDonald’s make plenty of money.
As for the role of prior positive experiences and cost issues in hiring, duh. No in-house lawyer wants to overpay for mediocre work.
Now, on to the reasons for firing outside counsel:
Of the Acritas panel, one-third had dropped a firm in the last 12 months, up from 30 percent last year. For 20 percent the one-off assignment had ended. Several clients volunteered that they’d hire the firm again if an opportunity arose.
But law firms had only themselves to blame for most of the other reasons why their firm was dropped: Too expensive (19 percent); poor service (17 percent); poor advice (13 percent); lost people (6 percent); and conflicts (5 percent) were the leading reasons cited.
Again, nothing shocking here. The top reasons for firing are similar to the ones in last year’s Acritas survey. But some of the editorial comments that the firms provided to Acritas were fun:
- “We came to despise the firm.”
- “They raped and pillaged when they billed us.”
When a legal bill knows no limits, client dissatisfaction follows suit.
Why Clients Hire and Fire Law Firms [American Lawyer]
Earlier: Nothing You Can Say Can Cause Me To Retain You
How Do You Displace A Competent Incumbent Counsel?
The Literary Genre Of ‘Big Firm Mediocre’
Why Was Your Firm Fired as Outside Counsel
Overbilling Gone Wild: Paying the (DLA) Piper