Articles

• Current Issue
• Issue Archives
• Marketing Articles
• Management Articles
• Technology Articles
• Finance Articles

Law Practice Today

• Subscribe/Unsubscribe
• Write for LPT
• Advertise in LPT
• Article Reprint Permission
• Give Feedback
• ABA Law Practice Management Section
•  RSS Feed

---

Practice Management Q&A

How Do Client and Industry Teams Fit Into Our Practice Management Structure? Part 2

by Susan Raridon Lambreth and Terri Pepper Gavulic

February 2006

Please share with us your experiences with client teams as this area of law firm management continues to develop. We would love to share these experiences with our readers in future columns and on the annual conference on practice management we offer each spring. Feel free to contact us at srlambreth@hildebrandt.com or tpgavulic@hildebrandt.com or 800-223-0937.

As discussed in the October column of “Practice Management Q&A,” client and industry teams are the hot topics in almost every firm today. Most law firms have established a least a few industry and client teams and some firms have established dozens. Too many firms, however, see these teams simply as a part of their marketing program or a cross-selling strategy, rather than a part of the fundamental structure of how they manage their law firm. As a result, in many firms, their initiatives with client or industry teams have failed. The October 2005 column covered the current use and effectiveness of industry teams. This column will focus on similar issues related to client teams.

The Role of Client Teams

Practice management basically means managing the firm through smaller business units whose role is the development and management of the work, the client relationships and the professionals in the firm. These business units can be based on substantive practice areas, offices, industry niches or clients -- or a combination of several. For most firms, practice groups based upon substantive law niches (such as products liability, tax, commercial litigation, labor and employment, etc.) is the most common primary management structure. The second most common structure is where the practice groups are a mix of substantive law groups and industry groups such as health care, energy, banking or technology.

At the same time, at least for most large or multi-office firms, managing a law firm along a single dimension (e.g., using only practice groups based on substantive practice areas) tends to be inadequate and ineffective. Within the strategy of most large firms today – and in response to demands from the marketplace, there is a strong focus on core clients and industry specialization. As a result, there is a need for business units to manage this focus, usually called industry and client teams. As covered in the October column, industry teams are primarily established for marketing and training purposes. Client teams, on the other hand, play broader roles in the management of the work and the client relationships. In addition, the firms’ offices also have management issues and are another dimension of management. This matrix approach is depicted in the chart below.

Why Establish Client Teams?

First, lawyers and law firms typically avoid bureaucracy. So, why should you have client teams? The impetus for client teams is being driven by the increasing demands and expectations of clients and the competition for clients among law firms. This requires a more sophisticated and institutional approach to client management than in the past. The rationale for client teams includes:

• The need to move from a “transactional” to a “relationship” based approach to client management;
• The need to supplement the traditional “partner-client” relationship with a breadth and depth of relationships between the contacts within the client organization and the lawyers or other professionals in the firm;
• The expectation of clients that the firm will provide a very high level of consistency of service through a more well-managed internal coordination and communication;
• The movement in law firms from a “sales” driven approach for providing additional services to their clients to a “client” driven approach based on an in-depth understanding of the client’s needs and perception of value (usually based on in-person client interviews conducted by the firm or third parties);
• The desire of clients to reduce the time and expense of re-educating service providers with each new legal challenge; and
• The constant drive in law firms to add value in ways their competitors do not.

Beyond just the rationale or necessity for instituting client teams, they typically result in many benefits, as follows:

Benefits to the Firm

• Greater attention of a larger number of people in the firm on the maintenance/enhancement of a complexity of relationships within a client organization;
• Focus on the unique and specific needs of a given client, across practice areas, typically resulting in better service quality and experience for the client; and
• Expansion of the work from the client – both in terms of total revenues from the client, the profitability of the work and the number of practice areas within the firm used by the client.

Benefits to the Client

• Stronger vertical and horizontal relationships between the firm and the contacts in the client organization – through dedication of a team of people who develop an understanding of the client’s needs, preferences, internal operations and marketplace considerations and who develop a larger number of strong trust relationships with the client;
• Development of high caliber “backup” to the client’s primary lawyers – i.e., lawyers who are aware of the client’s situation, preferences, past work, etc, and so can jump in to handle matters without a long or expensive learning curve – resulting in more cost effective (and often more timely) legal services; and
• Identification of new ways to add value to the client – through closer relationships and better understanding of the client by a larger number of people within the law firm.

Keys to Effective Client Teams

In many firms today, they have established client teams but they have accomplished little. There are three main reasons for this:

1. The firm established a structure for the teams that failed to take into account group dynamics (which will be described in more detail below);
2. They established them as part of a new overall practice management structure without sufficient buy-in overall or for the need for client teams (e.g., frequently the marketing department is driving them but firm management or the partners have not fully bought in); and/or
3. They established the teams for the wrong reasons, such as:
• Other firms have them;
• It is the “trend du jour”.

There are four keys to successful client teams, as follows:

• Compelling Reason for Client Teams Generally and for Each Specific Client

The firm must have a clear rationale for establishing client teams that fits with its strategic plan, culture and compensation incentives and is based on one or more of the key rationale described above. They should not be just setting up client teams because it is the current fad or because the firm thinks it is a way to obtain more business. In addition, there must be a reason for each specific client – why does the firm think having a client team for this client will add more value to the relationship than there already is?

• Understanding of Group/Team Dynamics

Many groups and teams within law firms fail because of a lack of understanding of group or team dynamics. The research on effective groups or teams – by many experts in organizational behavior and management – is very clear. There are key elements that must be in place for a team to be effective. These include:

• Clear goals with buy-in from all participants in the team (a good, simple action plan and the will to implement it);
• Accurate picture of current level of team effectiveness (feedback that is objective and free of judgment);
• Clear roles for all participants;
• A focus on the team focus versus an individual or emotional focus;
• Education about how teams function and how teams get stuck; and
• Commitment and hard work.

One of the key parts of the education about how effective teams function is for all members of the team to understand that how teams work is largely not a function of the team leader. Instead, it is based on how all the members of the team interrelate, participate in goal-setting and share responsibilities. The success or failure of the team is a function of all team members, not just the leader or a few. Way too many teams that we see do not understand these key elements and as a result, are never very effective. Also, without an understanding and appreciation of group dynamics, teams are less effective at working through the issues that all teams face in their development, namely trust, inclusion, interdependence and conflict resolution. They may be a collection of successful individual performers but never really accomplish much as a team.

• Clear Team Goal(s)

As mentioned above, the team must have clear overall goals (but generally no more than two or three) and they need to be related to the client’s objectives or situation. They also need to be inspiring for the team. A team goal of getting more business from the client, while it may be a goal that helps with group cohesion, is not one that typically results in an enhanced relationship with the client over time. The team goals need to relate to enhancing the experience the client has with your firm or the value your team provides to them. For example, in one firm, the client benefited when the team found an innovative way to train associates on their matters.

• Incentives for Group/Team Performance in the Firm’s Compensation System

The historic compensation system in most firms -- even those with “subjective” systems -- has primarily rewarded personal production and business generation on an individual basis. If a firm hopes to incentivize participation in client or industry teams, or other practice group or management activities, there must be perceived incentives for contributions to team performance, not just focusing on individual performance. In addition, the firm must candidly evaluate whether its compensation system actually disincentivizes group and team activities by rewarding personal numbers, rewarding attraction of new clients more than expansion of existing clients, encouraging partners to keep their business portable, etc. This issue was covered in depth in the October 2005 column. The bottom line is that, for client teams – or any groups and teams -- to work in the firm, the firm’s compensation system must reward group activity, not just strong individual contributions. Other aspects of firm culture which must be evaluated if teams are to be effective include individual autonomy and trust among partners.

There are other forms of rewards and recognition that aid in the development of client teams once appropriate compensation structures are in place. These include things such as public recognition (e.g., broadcasting successes firm wide) and first chance at new business opportunities.

Reporting Relationships

Like with industry teams covered in the earlier column, the reporting relationships are varied for client teams and their leaders. In some firms, the head of the client team reports to one of the department chairs with whom the client is most closely aligned or the practice group leader where the client work originated. In others, the client team leaders report to the managing partner in charge of practices or practice management for the firm (a new role that has developed in firms). In a few firms, the heads of the client teams report directly to the chair or managing partner of the firm because the client teams are considered such an important initiative for the firm and when there are only a few major client teams (less than 10 typically). In a growing number of firms, they report to a partner in charge of client teams who is part of the firm’s operational board or even management committee. If the firm has an operational board, it is usually composed of the managing partner, the department chairs (in firms with two levels of practice oriented structure -- departments with practice groups underneath them), the partner in charge of client teams and the firm’s executive staff like the COO, CMO and CFO.

Job Descriptions

Many firms still do not have specific job descriptions for their client team leaders or members. The responsibilities are generally outlined informally and include primarily client relationship, project management, lawyer training, client education, and marketing or business development functions.

However, a growing number of firms do have a job description for these team leaders (although not many have “job descriptions” for members yet). Like with the job description for other practice management roles, the Client Team Leader does not, and cannot, do all of this by himself. They must, however, be accountable for ensuring someone on the team does it all. Excerpts of a job description for this role are covered below:

• Facilitation of the team’s development of clear goals and a simple action plan;
• In-depth understanding of the client’s business -- development of a thorough understanding of the client’s needs, preferences, culture, etc. – as perceived by the various contacts within the client organization;
• Development of new approaches to servicing the client that continue to add value or innovate in ways that are meaningful to the client;
• Collection, use and dissemination of client input gathered through formal and informal feedback processes;
• Client team coordination and management

• “Care and feeding” of clients
• Internal communication with the client team and relevant practice group or office leaders
• Client satisfaction
• Monitoring of all matters for the client
• Relationships with key influencers in the client organization
• Cross training and client education; and
• Client and matter profitability.

It is clear though that an increasing number of firms are clarifying these roles and responsibilities with a written statement or job description for reasons we will cover below.

Expectations For The Client Team, Its Leader and Members

As covered in our column on industry teams, no teams in the firm are likely to be successful without clear expectations for the team, its leaders and members. Without clear expectations, we see the following issues may occur:

• Teams flounder around trying to find their way;
• Development of internal competition between practice groups, industry and client teams for resources, time commitment of lawyers for group or team projects and more;
• Lack of meaningful metrics in order to be able to measure return on investment or other goal achievement; and
• Wasted time as a result of unclear roles and responsibilities.

It is important to clarify how the client team will interrelate with the departmental and/or practice group and industry team structure. This involves three areas: (1) the job description for the team leader vis-à-vis other management roles like practice group and industry team leaders and office managing partners; (2) clarification of the goals firm management has for the team, such as higher satisfaction expressed in client interviews, stronger relationships with key influencers in the client organization, expansion of revenues, increased number of contacts in the client organization, , cross-selling of new services, etc.; and (3) clear expectations for what members of the team need to do in terms of time commitment to team meetings, client team activities and other implementation of the plan for the team.

Sizes of Client Teams

Client teams are typically interdisciplinary and cross many substantive practice groups. As a result, in major firms, client teams for key firm clients can have dozens and, occasionally, even hundreds of members. We worked with one firm where a single client had over 300 timekeepers on its matters the previous year. Obviously, with teams that large, they must operate with smaller subgroups as steering committees, task forces and other smaller groupings with specific goals or functions. This is particularly important for the client team to develop as a truly cohesive team because the research on teams indicates that few, if any, teams over 12 individuals are ever highly effective. Thus, when a large number of individuals service a client, there must be a smaller core group that is focused on goal-setting, division of responsibilities and the other elements for effective teams outlined above. Otherwise, the teams generally accomplish little. In smaller or mid-sized firms, the teams are often more like 5 to 20 members which is more manageable.

Integration with Practices

It is important for firms to ensure that the efforts of client teams are integrated with practice groups and not competitive. If they are working well, the client teams enhance the business development of the practice groups by helping them focus on certain clients and providing differentiation from firms that do not understand the client as well, do not find unusual ways to add value or have as strong of relationships.

Keys to Success

While the use of client teams and the “best practices” will continue to develop, there are some definite keys to success that are evident so far:

• Do not implement too many at once. For most firms, this means piloting a client team initiative with no more than three to five of these teams.
• Clarify the expectations for the team, the team leader and the members -- preferably with job descriptions or other written communication.
• Make sure the teams are not too large (or at least the real working group) and that all the team members understand some basics of group dynamics.
• Establish reporting and accountability relationships. Most client teams are not successful unless they are accountable to firm or practice management for their use of firm resources and goal achievement.
• Ensure that team leaders and members believe that working toward client team goals will be rewarded like other valued firm building or investment time activities, and sometimes this is more valuable than “billable” time.
• Identify any firm cultural, compensation or other disincentives to the behavioral change that is necessary for any real teams to work – practices, industry or client teams.
• Assuring that the existence of the client team has true meaning for the client and bringing their voice into the firm through formal and informal client feedback gathering.

Back to Top

---