More of what clients want — part two
More nuggets from the Clientelligence book and the four activities that deliver the most value according to the author who interviewed thousands of C-level executives. The first post examined the first two activities – Commitment to help and Client Focus. This post reviews the other two — Understanding the Client’s Business and Providing Value for the Dollar.
Understanding the Client’s Business
To check this box, think and act like an auditor. Yes, some of the most effective lawyers put on their accounting hat and get very deep into the weeds of the client’s business.
One of the major standards governing the work of auditors requires the auditor to obtain an understanding of the entity-client and its industry as a necessary step in performing a comprehensive audit. As a guide, here are the five major aspects of understanding the client’s business and industry, along with potential sources of information that could be helpful to you for each of the five areas:
- Industry and External Environment – Read industry trade publications; subscribe to local business journals in areas where client has major facilities; review industry reports and stock analysts opinions on the client; monitor activity at major government agencies and ruling bodies; and understand legislation and regulations that significantly affect the client
- Business Operations and Processes – Tour the plant and offices, identify related parties, and inquire of management; learn about major customers and contracts, terms of payment, profit margins, market share, competitors, pricing policies, reputation of products, warranties, trends, marketing strategy and objectives, manufacturing processes, etc.
- Management and Governance – Read the corporate charter and bylaws, read minutes of board of directors and stockholders, and inquire of management; review management policy manual; and read client job listings including job descriptions
- Client Objectives and Strategies – Read 10-K filings (including Management Discussion and Analysis section), client business and strategic plans, and contracts and other legal documents, such as those for notes and bonds payable, stock options, and pension plans; listen to earnings calls for publicly held clients (and their major competitors) which may provide information as to client’s new initiatives, strategy changes, and market trends; meet with clients to discuss business goals, issues, and plans; and read client promotional literature
- Measurement and Performance – Read financial statements (including footnotes), budgets, understand key ratios and operating statistics such as cash flow, inventory turnover, and market share, and inquire of management about key performance indicators that management uses to measure progress toward its objectives
As the author notes, taking these or similar steps (many of which are identified in the book) enables you to better understand what your client really wants, proactively identify potential legal and business issues, and provide relevant, client specific solutions for which you may be able to help implement.
Providing Value for the Dollar
There are three components required to check this box.
- Deliver value
- Communicate effectively the value that has been delivered
- Work to insure that the client’s perception of the value received is in line with your perception
The following examples illustrate how you may be able to deliver value (bullet one) from the client’s point of view (bullet three). Below these examples are thoughts (from the book) about how to communicate the value that has been delivered (bullet two).
- Avoiding exposure to risk, such as losing all assets, is value. Thus, you can provide value in the form of enabling a successful corporate reorganization.
- Sometimes a brilliant idea or insight can produce great value, even though it results from a small amount of time. A simple solution to a complex and seemingly unsolvable problem occasionally results from a restructuring of the problem posed, from a burst of brilliance, or from your deep experience.
- The ongoing process of supporting a client’s needs can represent value. Your routine handling of a client’s ongoing needs in a complex society gives the client peace of mind and frees her to pursue other ends, whether personal or financial. Representation by you --- a strong, competent, loyal, well-established, and highly regarded lawyer can bring stability and credibility to the client’s life.
- High-level specialized expertise and skill create value. Some matters require your unique skills and experience. In those situations, clients will seek you out --- a lawyer who can provide highly valued specialized services.
- A straightforward approach can be a very appreciated value. You provide value when you do only what is needed. This may include advising a client that nothing need be done, telling the client how to proceed without the your involvement or expense, or finding a simple solution. Simple solutions are, by their very nature, often under-rated and under-valued. But providing a reasonably acceptable solution, even though deluxe alternatives might be available, is a real mark of value when the client only needs a reasonably acceptable product.
- Guaranteeing satisfaction is certainly value. Clients stick with you when they know that you will “make it right” in terms of what is done or what is charged.
And as far as communicating this value, the book advises that service providers who are adept in the art of articulating value are able to do three things:
- Make clients feel smarter for having hired the right advisor
- Teach clients how to articulate their own value to top management
- Use scope changes and unexpected issues to deliver more value to clients
So, the skilled communicator shares every major breakthrough, problem solved and obstacle overcome with his clients. He speaks in terms the client understands and considers important by focusing on extras such as time saved, costs avoided, risks mitigated, and outcomes that were dramatically better than expected. And he confirms scope changes in real-time, outlining the full implications of the changes before discussing fees; discusses the impact on budget, resources, and timing; and proactively shares his recommendations for handling any changes in order to keep the original parameters as intact as possible.
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