Clients Choose Law Firms On Trust Not Price
Reputation and trust are more important than price to clients when it comes to choosing a law firm to help them with a legal matter, according to findings derived from the biggest-ever client experience research project conducted in the legal sector.
LawNet, the collaborative non-profit network for independent law firms, led the project undertaking almost 70,000 satisfaction surveys and 5,000 anonymous experience reviews over the past six years, as part of its ISO 9001 audited Excellence Mark.
Astonishingly, the data revealed that only 4% of new business is won on price, with two thirds generated through reputation and trust – comprised of 30% from existing clients, 19% by recommendation and 17% because of the people or character of the firm.
In terms of cost, clients placed more importance on how the charging worked rather than the actual price quoted. They also wanted to know the benefits of using the firm and to be kept updated as work progressed, highlighting the need for firms to tackle negotiating and sales skills, as well as strong client reporting.
This echoes findings by The Law Society which suggests buyers cannot differentiate between firms, yet only 28% of firms in national bench marked surveying explain why a client should choose them.
Interestingly, The Solicitors Regulation Authority (SRA) research shows 95% percent of lawyers believe they explain the charging system clearly to their clients, but only 70% of clients agree.
This in depth sector research reveals client motivations and highlights the cultural shift needed by firms to match growing expectation.
Helen Hamilton-Shaw, LawNet member Engagement & Strategy Director said:
“Many lawyers see negotiating as part of their core skill set, yet our research suggests there is often a skills gap when it comes to talking about costs with clients.
She further adds:
“But it is an issue that responds well to targeted action, once firms know they need to develop skills. Across the network, the way that walk-in enquiries are handled has improved by 24% in the past four years, and the way that staff handle a potential sales lead, by asking for permission to follow up on the enquiry, has shown a massive 41% improvement.”
The new transparency rules were introduced from 6th December 2018 which required law firms to be much more open about their costings and credentials by displaying more detailed price and service information. Last month at the LFS Conference in Birmingham, Stephen Ward, director of strategy and external relations for the specialist property law regulator, Council For Licensed Conveyancers (CLC) said they have 100% compliance on transparency and when the rules were introduced last year most people thought it would be a race to the bottom on price. But Ward reported over a third of conveyancers increased their prices to June this year – and over a third expect to increase prices over the next 12 months.
At the same conference, Chris Handford, Director of Regulatory Policy at SRA confirmed that in general law firms are providing better information on their website in terms of their prices and services. However, of the 210 (conveyancing) firms only 25% were fully compliant, while 50% had attempted to adhere to the rules but were not fully compliant, while 25% have not complied in any way.
As a conveyancer, do you agree or disagree with these report findings?