How can professional firms keep their clients happy, employees engaged and still make a profit? For those that missed Meridian West’s recent seminar on ‘The Golden Triangle’, find out more:
Most professionals believe themselves to be great problem solvers. However, our extensive research highlights that professional advisers need to be careful that they are adding clarity rather than complexity to their clients’ issues. We have identified four pitfalls for advisers to avoid:
1. An obsession with risk
The ability to spot potential risks is ingrained in the professional psyche. However, professionals are often accused of focusing on hypothetical risks at the expense of the opportunities that could
arise from accepting some degree of uncertainty. Cloud computing is an obvious example: the data protection and IP risks are great, but so too is the opportunity it brings to conduct business more efficiently across all parts of the world.
Fee-earners can also spend too much time and money focusing on irrelevant risks. Recent research by IACCM (International Association for Contract and Commercial Management) reveals that during the contracting process, lawyers spend too much time drafting warranties and indemnities, whereas the biggest cause of contract disputes – defining the scope – is often overlooked or left to others to resolve.
Why should this be? Historically there has been no clear feedback loop between advisers and the actual outcome of their advice: what risk actually occurred and
what the impact of these were. This means that precedents and templates remain unaltered. However, innovations in legal risk management, which map the seriousness of a risk against its likelihood
to occur, are helping make fundamental improvements on this front.
Building practical solutions is an emotional process that requires advisers to educate their
2. Not involving clients in solution building
Clients become frustrated when their advisers show up to deliver fully-developed solutions on tablets of stone. This is one of the main sources of dissatisfaction with professional advice, as one general
counsel we spoke to recently suggests: “It annoys me when there is no two-way interaction, when there might be several options available and my advisers only come up with the one that they prefer and
don’t involve me in the decision-making process.”
Most clients of professional services tell us they expect to be presented with a range of options, and to be guided through these to decide on a course of action. Building practical solutions is an emotional process that requires advisers to educate their clients, arming them with the information they need to make informed decisions without overburdening them. By developing a collaborative, open relationship it becomes easier to discuss solutions with a client.
3. Overlooking the unintended consequences of advice
As we saw with the debate surrounding the tax affairs of Starbucks, the unanticipated side-effects of advice – in this case, reputational damage – can be harmful to a business. It is incredibly frustrating for clients when the damaging consequences of a piece of advice are overlooked even if the advice itself is technically sound.
We recently spoke to one pensions trustee who didn’t believe her adviser had thought through the commercial impact of his solution: “Their proposed changes to our pensions scheme would have saved
the company money, but it would also have been impossible to implement and would have resulted in our staff going on strike!” Failing to consider advice within its widest commercial context makes it
more difficult to be considered as a trusted adviser.
4. Delivering solutions that are difficult to implement
No matter how technically brilliant a piece of advice is, if it is too complex for a client to grasp or too expensive to implement then it won’t succeed in fulfilling the client’s objectives. This problem is
most likely to occur when advisers don’t consider themselves to be part of the implementation process. They depart satisfied with their leg of the race complete, while the client struggles alone or has to bring in a new team for implementation.
To successfully build practical solutions, advisers have to work to ensure their clients fully understand the proposed solution, and that it dovetails effectively with requirements during the implementation stage. During M&A transactions, for example, it is not uncommon to have two separate advisory teams – the acquisition team and the integration team – with little communication between them. To deliver a successful outcome for the client, a commercial adviser will think through the full implementation process for their proposed solution and conduct a detailed handover with the integration team and the client.