Law firms and their clients aren't seeing eye to eye on pricing and tech use, a new survey shows. Here's how they can bridge that gap.
- A new survey revealed significant misalignment between law firms and corporate clients.
- The two sides perceive key issues like client problems, effective tech use, and pricing differently.
- Productive communication can help drive value for both parties and boost working relations.
- Visit the Business section of Insider for more stories.
There’s a significant gap between how law firms and their corporate clients perceive key issues that can fundamentally impact business relations, finds a survey on legal pricing and project management, released Monday.
The gaps in perception involve key issues like effective use of data and technology, understanding client problems, and pricing and billing. Though both sides find value in working with their counterparts, these gaps can diminish some of that value, creating inefficiencies and friction in the working relationship.
For example, while 94% of attorneys at law firms said their firms make a strong effort to understand their clients’ problems, only 57% of in-house lawyers agreed.
This misalignment suggests that clients believe that their expectations are not being met, perhaps in large part due to the increased uncertainty around regulatory changes and effects of the pandemic. According to the survey, poor communication may be the key culprit: only about a third of law firms and a third of their corporate clients said that there’s an exchange of helpful feedback.
“There’s a ton of opportunity here for law firms and their clients to figure out how to work better together,” said Christopher Ende, one of the Legal Value Network’s co-founders and chief value officer at the law firm Goulston & Storrs.
More than 70 of the Am Law 200 firms responded to the survey, which was conducted by the legal consulting company Blickstein Group and the Legal Value Network, a group of legal professionals aimed at discussing legal innovation that includes lawyers from Perkins Coie and Paul Hastings. Intapp, a firm management platform, also collaborated in the survey.
Law firms and their clients are measuring value differently
Although metrics and data are being touted as crucial ways of measuring value in the legal industry, the study found a marked difference in what law firms and their clients are assessing performance and value.
Law firms are focusing on revenue and other financial metrics, whereas corporations are focused on service-oriented data, such as speed and productivity.
The disparity in metrics can adversely affect how each party perceives the value of law firms’ work.
“Measuring value is more of an art than science,” said Ende. In the legal industry, that value is often distilled into whether the fees paid by clients is commensurate with the service provided.
The study found, however, that nearly three-fourths of firms said their partners provide more value per dollar than their associates, who are billed at lower rates. By contrast, only 40% of corporate clients agreed, suggesting they may be getting more bang for their buck if they were to hire more associates than partners.
There’s also a gap in how effectively firms are using technology
Law firms are being pushed by clients to adopt more technology that can theoretically help boost efficiency and minimize costs. The study, however, also found that while 83% of law firms think they’re leveraging technology to deliver legal services more effectively and cost-effectively, only 52% of corporations concurred.
“It’s a still-evolving landscape, and technology in and of itself isn’t going to magically, dramatically improve relationships between law firms and their clients,” said Ende.
Again, communication can help bridge that gap. According to Ende, by having productive discussions about the types of technologies available, the most effective way to deploy them in a way that drives value on both ends, and the best way to price that work, law firms and corporate clients can find a solution that is beneficial to both sides.
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