bti market outlook and client service review 2014 webinar

©2014 The BTI Consulting Group Wellesley, MA 02481 Tel: +1 617 439 0333 www.bticonsulting.com

The BTI Consulting Group

396 Washington Street, Suite 314 Wellesley, MA 02481

Tel: +1 617 439 0333 Fax: +1 617 439 9174

www.bticonsulting.com [email protected]

Prepared by:

BTI Market Outlook and Client Service Review 2014

January 16, 2014

Webinar

Compelling Research. Compelling Results.

Page 1

©2014 The BTI Consulting Group Wellesley, MA 02481 Tel: +1 617 439 0333 www.bticonsulting.com Questions? Call Michael B. Rynowecer, President, The BTI Consulting Group

The BTI Approach

Strategic Insight: Changes,

Opportunities, Threats

Corporate Counsel Needs: Now and How They

Will Change

Expectations for Relationships

Drivers Behind Client Satisfaction and Client Service

RESULTS HOW OUR CLIENTS BENEFIT

Higher Profits

Improved Client Service

30 Years’ Experience and Insight

Analysis

Market and Financial of 200-Plus Law Firms

Structured Trend

In-Depth Interviews

4,000 Corporate Counsel

250 Major Law Firm

Leadership Partners

More than 200 Top Business Executives of Fortune 1000 and

Large Companies

Strategic and

Tactical Analysis Higher Growth

Improved Retention


Page 2


U.S. Legal Market Exceeds $100 Billion Mark

Corporate Legal Departments $39.8 Billion 39.8%

Spending on Outside Counsel

$60.2 Billion 60.2%

The $100.1 Billion Market for Legal Services

Source: BTI Premium Practices Forecast 2014: Survey of Corporate Legal Spending


Page 3


Corporate Counsel Shift Spending In-house, New Competition…

In-house Corporate Counsel Spending $ Billions

$0

$10

$20

$30

$40

$33.5

$39.8 2011

2013


Page 4


55.7%

52.8% 51.3%

50.0%

31.2% 33.4%

35.5%

39.5%

20%

30%

40%

50%

60%

2010 2011 2012 2013

Global Organizations A Bright Spot

U.S. Corporate Legal Market for Outside Counsel Percent of Outside Counsel Market

Fortune 1000

Global 500



Page 5


Premium Practices Roadmap for 2014

Regulatory

Employment

Bankruptcy

Securities

Bet-the-Company

Tax

Class Actions

Real Estate

Litigation

IP Litigation

Restructuring

M&A

Investigations

Environmental

IP Corporate

Relative Rates

TACTICAL PRACTICES PRIORITY PRACTICES

CORNERSTONE PRACTICES OPPORTUNISTIC PRACTICES

High Growth 10.0%

Negative Growth -4.0%

1.1% Average Growth

Routine Rates Premium

Gro

wth

Pro

spect

s

= $2 Billion Market Opportunity


Moderate Growth


Page 6


Matters to Surge, Spending Flat

150

200

250

300

350

$10.0

$15.0

$20.0

$25.0

$30.0

2011 2012 2013 2014(Projected)

Litigation Activity and Litigation Spending Billions Matters

Source: BTI Litigation Outlook 2014: Changes, Trends and Opportunities for Law Firms

Litigation Spending

Total Matters


Page 7


Resolution Rates Remain High

22.2%

36.9%

41.6%

36.5% 39.7%

0%

25%

50%

75%

2009 2010 2011 2012 2013 2014…

Trend in Resolution Rates Percent of Active Matters Settled

Source: BTI Litigation Outlook 2014: Changes, Trends and Opportunities for Law Firms


Page 8


$24.8 $25.4

$27.2

$25.4 $26.6

$30.0

$32.2 $32.8

$28.1

$30.3 $30.1

$32.7 $33.3

$10.5 $11.6

$14.0 $14.6

$16.9

$19.5 $20.5 $20.8

$18.5 $18.7 $19.1 $19.8 $19.7

42.2% 45.7%

51.4%

57.6%

63.4% 65.0% 63.5% 63.3%

65.9% 61.6%

63.6% 60.6% 59.2%

0%

25%

50%

75%

100%

$0

$10

$20

$30

2001 2002 2003 2004 2005 2006 2007 2008 2009 2010 2011 2012 2013

Outside Counsel Spending

Total Legal Affairs Spending

$ Millions Outside Counsel as % of Total Spending

A Predator’s Paradise Outside Counsel Spending Flat



Page 9


Harsh Law Firm Self Ranking on Essential Skills

6.93

7.82

1

4

7

10

Marketing and BusinessDevelopment Efforts

OverallClient Service

Self Performance Rating

High

Average

Median

Low


Page 10


2.20%

2.10% 2.10%

2.01% 2.06%

2.34% 2.42% 2.50%

2.60%

2.44%

2.17% 2.14% 2.28%

2.57%

2.84%

2.64% 2.57%

2.93% 2.81%

1.5%

2.0%

2.5%

3.0%

2006 2007 2008 2009 2010 2011 2012 2013

Law Firms Invest In Marketing and BD Muscle

Average Marketing Budgets Percentage of Revenue

Expressed as a percent of revenue, including salaries, what is your marketing budget for 2012?

AmLaw 100

AmLaw 101-200

Outside AmLaw 200


Page 11


Hand-to-Hand Combat: 11 Core Law Firms Compete Every Day for Work

Law Firm Utilization Number of Law Firms

0

10

20

30

40

2

9

36

Primary Law Firms

Secondary Law Firms

All Others

Core law firms account for approximately 80% of outside

counsel spending

Handle small, technical or routine

cases


Page 12


Benchmarking Key Client Service Metrics: Reaching Clientopia

Financial Investment

Emotional Investment

Clientopia The Ideal State of the Client Relationship

First Primary Core Firm First Recommended

ClientopiaTM


Page 13


31.4% of Clients are Truly Satisfied with Their Leading Law Firm

31.4% of corporate counsel recommend their

primary law firm first

Clientopia The Ideal State of the Client Relationship


Page 14


Clients See as

Abundant in the Market

Clients See as

Scarce in the Market

Ability to Differentiate

17 Activities to Develop Superior Client Relationships

Importance

High

Low

Not Important Very Important

Commitment to Help

Quality Products

Deals with Unexpected Changes

Handles Problems

Client Focus

Keeps Clients Informed

Meets Core Scope

Provides Value for the Dollar

Unprompted Communication

Helps Advise on Business Issues

Regional Reputation

Brings Together National Resources

Innovative Approach

Breadth of Services

Anticipates the Client’s Needs

Legal Skills

Understands the Client’s Business


Page 15


650 Core Law Firms Serve the Fortune 1000; Just 336 Stand Out for Superior Client Service

Best-in-Class BTI Client Service 30

30 Law Firms 4.6%

Law Firms Honored in the Client

Service A-Team 306 Law Firms

47.1%

Other Core Law Firms Serving the Fortune 1000 314 Law Firms 48.3%


Page 16


The 2014 BTI Client Service Top 30: The Cream of the Crop

BTI Client Service Rank

BTI Client Service Score

BTI Client Service Rank

BTI Client Service Score

16. Holland & Knight

17. Hogan Lovells

18. Littler Mendelson

19. Norton Rose Fulbright

20. Greenberg Traurig

21. Jackson Lewis

22. K&L Gates

23. Foley & Lardner

24. Alston & Bird

25. McGuireWoods

26. Venable

27. DLA Piper

28. Ogletree, Deakins

29. Thompson Coburn

30. Husch Blackwell

171.80

151.44

151.05

146.17

144.61

141.11

141.03

138.08

137.50

129.50

127.36

122.03

115.55

104.48

103.59

1. Skadden, Arps

2. Jones Day

3. Sidley Austin

4. Morgan Lewis

5. Kirkland & Ellis

6. Morrison & Foerster

7. Latham & Watkins

8. Thompson Hine

9. Faegre Baker Daniels

10. Gibson, Dunn & Crutcher

11. Reed Smith

12. Mayer Brown

13. Bryan Cave

14. Seyfarth Shaw

15. McDermott Will & Emery

374.67

274.87

255.33

254.58

252.05

247.03

229.34

212.04

204.79

197.88

196.58

192.78

190.08

186.37

172.47

Highlighted firms boast more than 12 years as part of The BTI Client Service 30


Page 17


Superior Client Service Changes the Nature of Client Relationships

Number of Practices Delivered to Clients

0

2.5

5

1.0

1.8

3.2

Secondary Law Firms Primary Law Firms With Superior Client Service

Primary Law Firms


Page 18


Benefits Enjoyed by Law Firms Consistently Delivering the Best Client Service

Higher Profits Rate Premiums Across All Staff Levels

Fees From a Single Client

Higher Client Retention

2x

Higher Growth 0%

25%

50%

33.0%

25.6%

50.0%

39.0%

35.9%


Page 19


Superior Client Service Initiatives: Garnering Buy-in

Superior Client Service Initiatives

Make the client service initiative your partners’ idea

› Ask partners to rank the priority and benefit of client service tactics

› Use the results to design your initiative—mostly

Use your next retreat to create the demand

› Strategically designed breakout groups to drive client service

• Partners:

– Identify obstacles to delivering superior client service

– Pinpoint strategies to overcome obstacles

– Delineate best actions to implement

› High-impact interactions

• Short

• Specific

• Actions vetted by partners

• NO navel gazing


Page 20


Superior Client Service Initiatives: Garnering Buy-in

Superior Client Service Initiatives

Use client feedback scores as evidence of need to outperform competitors in your client base

› Overall performance score

› Scores on BTI 17 Activities

› Scores compared to other law firm serving your clients

› Metrics to put a stake in the ground

› Probe as to “why” to help partners to understand


Page 21


Number One Obstacle According to Law Firms: Resistance

Getting Support for Client Feedback

Create a sense of urgency, need and value

Include in: strategic plan, partner annual goals, practice-specific goals

Gain feedback from high-profile, large-scale clients first

Ask partners which questions they think make the most sense to ask

› Provide sample survey documents and questions

Embrace friendly and influential partners who support client feedback

› Provide results

Invite partners to present changes resulting from client feedback at every firm-sponsored meeting

› Leadership follows up on results

The average Am Law 200 firm has over 11% of client billings at risk in their largest clients


Page 22


5 Rules to Maximize Opportunity in a Slow-Growth Economy

Rules for Market Share Gains

1. Deliver superior (not good) client service

70% of Leaders deliver superior client service

2. Assign a senior partner to be accountable for client service

3. Don’t dabble—commit substantial resources on a systematic basis

4. Treat your 50 largest clients as 50 markets of one

Each client is an unique market opportunity

Each opportunity requires a custom approach for success

5. Act now—we are only at the beginning of the maturation of the

legal industry


Page 23


Steps to Take Tomorrow

Immediate Impact Activities

Form a triage team with your clients to jointly assess new matters and needs as they come in

› Once a month or biweekly, depending on client

Offer to sit on clients’ new product development committees

› Help spot IP opportunities; both strategic and defensive

Swarm clients with online value-added tools:

› Checklists

› Guidelines

› Self assessments


Page 24


What’s New in BTI Research and Reports

Upcoming Reports

The BTI Client Service All-Stars 2014

New! The BTI IP and IP Litigation Outlook

New! BTI’s Rate Study

The BTI Brand Elite 2014

BTI’s How Clients Hire: The Role of Legal Directories and Online Lawyer Profiles

Just-Released Research

The BTI Client Service A-Team 2014

BTI Premium Practices Forecast

BTI’s Strategic Review and Outlook

The BTI Litigation Outlook


Page 25


BTI’s Key Services

We can help you with everything

from high-impact client feedback

to full-scale client service initiatives

Contact:

Michael B. Rynowecer

[email protected]

Jennifer Petrone Dezso

[email protected]

mailto:[email protected]

mailto:[email protected]


Page 26


Follow BTI

LMA Annual Conference 2014 Clientelligence: The Cold, Hard Facts on What Your Clients Really Want from Your Firm Thursday, April 3, 2014 4:15 – 5:15 PM Orlando, FL

Twitter: @bticonsulting and @themadclientist Follow BTI Consulting on LinkedIn Like BTI Consulting on Facebook


Page 27


Thank You

www.TheMadClientist.com

Michael B. Rynowecer

[email protected]

+1 508.651.5048

Jennifer Petrone Dezso

[email protected]

+1 512.243.8037

To find out how BTI can help you with your client research or strategic planning, contact Michael B. Rynowecer or Jennifer Petrone Dezso

©2014 The BTI Consulting Group Wellesley, MA 02481 Tel: +1 617 439 0333 www.bticonsulting.com

The BTI Consulting Group

396 Washington Street, Suite 314 Wellesley, MA 02481

Tel: +1 617 439 0333 Fax: +1 617 439 9174

www.bticonsulting.com [email protected]

Prepared by:

BTI Market Outlook and Client Service Review 2014

January 16, 2014

Webinar

bti market outlook and client service review 2014 webinar

Business

bti consulting group

bti premium practices

bti market outlook

bti litigation outlook

litigation spending

compelling results

counsel spending flat

corporate legal market