Equation for a Trusting Relationship

We in Canada have little understanding of the legal services industry in Australia, whether this is due to geography or wilful blindness is unclear. But given our common legal heritage and commonwealth brotherhood (whenever I’m in Asia, Canadians seem to bond easiest with Aussies – in the pubs at least) we should pay much more attention to the land down under. Especially since it’s thinking on legal services delivery is years ahead of our own.

So I count myself fortunate to be able to grow my contacts in Australia.

Aussie management/legal consultant George Beaton has put me onto a post by another management consultant from Oz, Joel Barolsky.

Joel’s latest post deals with a revised view of best-seller, The Trusted Advisor, by David Maister, Charles Green and Robert Galford.

It is old hat that Canadian lawyers seek to be seen as the “trusted advisor” of their clients. But what exactly does that mean and what are the components that make up a trusting relationship between lawyer and client?

Joel posits the following:

A Trusting Relationship = Reliability x Value x Affinity x Understanding x Innovation

Reliability, Value and Affinity need little comment as a law firm that is unreliable, provides little or no value and which is not particularly well-liked by the client has little hope gaining work over the long term.

The key focus for firms should be on the last two parts of the equation: Understanding and Innovation.

Joel cites Beaton Research & Consulting’s research as confirming that it is vital to clients that their lawyers understand their needs, business and industry. In Canada we have, over the past decade, seen large firms shift from claiming to be “legal experts” to being “industry experts.” Canadian firms have, at least superficially, aligned into industry sectors but still struggle with giving up practice group alignment – which I believe causes confusion within the firm (am I part of the Communications Industry Sector or the Real Estate Practice Group?). Dentons has tried to merge the two concepts an interesting way on their new website.

Joel suggests that sector alignment/knowledge can provide significant competitive advantage to firms (although my sense is that most Canadian firms see sector alignment as more a marketing/follow-the-other-firms ploy rather than a true managed strategy):

  • insights necessary to pitch, price and win the next major assignment and/or panel reappointment;
  • a client-perceived switching cost; and
  • the ability to anticipate where the firm-client relationship is likely to go over the long-term and to develop proactive strategies in response.

In the Canadian context, my view is that few, if any, large firms use these competitive advantages to their full potential; the work required to properly take advantage is seen as a “cost” to the firm with no immediate return on investment.

Joel also points to innovation as an important part of the trusting relationship equation. Much like a long marriage, long-term client relationships can fail because “the parties get bored with each other and start taking everything for granted. Continuously exploring new ways to deliver and create value is central to keeping a long-standing relationship away from hungry, and often very attractive, new players.” Joel’s point should send shivers down the spines of mid- to large-sized Canadian law firms. Only the most intransigent lawyers would think that a firm that revamps its business model to deliver new value (think: a Riverview Law or Seyfarth Shaw) would not start taking clients away from established firms.

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Comments

  1. George Beaton

    First, thanks for citing the Beaton Research + Consulting studies Mitch; we now have 10 years of data from nearly 200,000 respondents in Australia, New Zealand, Asia and South Africa. (Hopefully some time soon from Canada too.)

    Second, our research strongly supports Joel’s proposition that ‘Understanding’ is a key driver of the strength of the relationship between attorney and client. If we tease out ‘understanding’ we find the essence lies in the currency and depth of knowledge the attorney has of the clients’ business, its drivers and the competitive dynamics of the client’s industry, at least for business clients. For government clients, ‘understanding’ refers to the political and bureaucratic dynamics.

    Third, I’d like to hear what readers make of ‘innovation’ as an ingredient of trust?