Thursday, June 26, 2008

Are Your Law Firm Clients at Risk?

Yesterday we talked about the results of a recent Altman Weil study, which found that an increasing number of in-house General Counsel recently fired an outside law firm or plan to fire an outside law firm.

Do you know if your valuable law firm accounts are at risk?

Fortunately, there are some signs of trouble when an account is in jeopardy. Whether you choose to take action is up to you. Here are five sure signs of revenue risk.

1. Your relationship with an important account is concentrated in the hands of one partner. What if that partner leaves the firm, is tied up on a major trial for another account, or becomes ill?

2. Your client relationship involves many attorneys within your firm, but just one or two key contacts on the client side. The same questions apply. What if your contact gets a great job offer and jumps ship? Chances are that your contact's replacement may bring their own (and different) law firm relationships to the job.

3. Consolidation or retrenchment is gripping your client's industry. Think airlines or automotive. As an industry shrinks, your client firms may pull back at best or disappear at worst.

4. Mergers or acquisitions may keep your client afloat, but not with you. Countrywide or Bear Stearns are prime examples.

5. New management takes the helm of an important account. Your client contacts remain strong, but you never know when the next corporate reorg is around the corner. Incoming leaders like to bring in their own team. Can your law firm survive?

What would happen if you lost a major account? It makes you stop and think, which is a positive step.

A continuing focus on new business development will build a steady pipeline of prospects, helping to protect your law firm from the blow of a major account loss.

One of the most important roles you can play as a Managing Partner or Practice Group Chair is to be alert to "at risk" accounts. A few proactive steps, including staff business development training, can protect your firm from reversals of your hard-fought success.

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