Effectively managing and meeting the expectations of your clients is vital to the success and profitability of your firm. You largest clients are very often responsible for significant levels of fee income and profitability. Losing one of these key clients could have a potentially serious and dramatic effect on your firm.
With increasingly sophisticated and demanding clients and the seemingly relentless commoditisation of professional expertise, the importance of key account management (KAM) as a tool for creating greater client loyalty has never been greater. However, many law firms continue to struggle with their own key account programmes.
This report provides law firms with a blue print for creating and sustaining a highly effective KAM programme. Written by Meirion Jones, the architect of Reed Smith’s highly successful KAM strategy, it clearly sets out a roadmap for implementing a successful KAM strategy, helping you to identify and avoid the potential obstacles to successful implementation.
1. What is and isn’t key account management?
Understanding the complexities of KAM:
- Strategic planning.
- Consultative sales.
- IT integration.
- Team working.
- Project management.
- International communications.
- Cultural alignment.
CASE STUDY based on two equal sized firms on a legal panel, one losing ground, the other winning ground
2. Irresistible forces
What are the forces driving the need for key account management:
- Changing client expectations - the increasing sophistication of clients in their sourcing of legal expertise and what they want from their advisors.
- Legal commoditisation: what used to set firms apart now just gets them across the threshold.
- Increasing client use of IT to check and verify the quality of the service they are receiving.
- Market over-supply.
3. Stuck in the mud - immovable forces
If the importance of KAM is self-evident why don't law firms introduce KAM programmes wholesale? What are the barriers to implementation?
- Cultural and mindset - lawyers tend not to make great leaders, strategists, opportunity exploiters and relationship builders.
- Financial complacency - law firms are profitable businesses. What other business can return a 30% profit margin and still think it's under-performing relative to the market?
- Organisational - failure to align internal processes such as compensation, promotion and internal communication with KAM.
- Behavioural - fear of change; intolerance of process.
4. The four pillars of successful KAM
The firms that overcome the barriers identified in Part One will come to dominate the market in the next ten to fifteen years. How will they do it?
Each chapter in this section will look at the processes and actions involved, and explain why they are essential to the overall Key Account Management programme. Each chapter will contain case study examples (based on fact but disguised for commercial sensitivity) and conclude with a list of the core tools.
i. Data gathering - information vs understanding
- External - client business analysis; industry sector; client feedback; competitor analysis.
- Internal - historical financial analysis; workflow analysis; relationships; client feedback.
- Information sources.
- Opportunity assessments.
- Relationship maps.
- Client and client team selection criteria.
- Creating a strategic account plan.
- Testing the plan with the client (brave but worthwhile).
- Weighted comparative analysis.
- Account plans - strategic and financial.
- Priority strategic focus.
- Value-added client offerings.
At this point the teams must put the plans into action.
- Individual account plans.
- Training and coaching programmes.
- Networking and consultative selling guidelines.
iv. Maintenance and momentum - embedding a KAM mindset and ensuring follow-up
- CRM system or equivalent.
- Internal communications.
- Performance dashboards .
- Compensation systems.
5. Next Steps
Critical conditions for launching a successful programme
If a firm fails to approach this challenge holistically the programme is unlikely to succeed. There are six key, inter-related elements to ensure successful implementation:
- Skill set.
A short-form questionnaire is provided to enable readers to assess their own firm's preparedness for launching a KAM programme. The results of the survey will help them to shape their own KAM strategic implementation plan.