I recently conducted an interview that reminded me of one of my favorite client feedback interview experiences and the importance of knowing your clients’ legal budgets.
As part of the interview process, we always conduct a prep interview with the relationship lawyer and key individuals working with the client. We ask about the history of the relationship, the current work, client preferences, if we should anticipate any service gaps and insights into the business and culture of the organization. We talk about billing and pricing, the overall legal budget and what percentage of work the firm believes it is receiving of the overall spend.
During the prep interview for a firm years ago, I asked the relationship lawyer what percentage of work he believed the firm was receiving as part of the overall spend. He replied, “I’m not too sure of the exact specifics, but we are definitely getting our lion’s share.” Mentally, I questioned the analogy a bit given the billings of slightly over one million dollars in the previous year but moved on. I conducted the interview and asked the client about the overall legal budget of the organization. “Approximately $26 million” was the response. I smiled internally, asked a few more questions and thanked them for their time.
When I delivered the report and feedback to the firm, the MP happened to be in the room. We discussed the feedback, opportunities for improvement, key insights on competitors, the overall legal budget and opportunities for follow up. When I told them that their billings were .03% of the overall spend, the MP turned to the relationship lawyer while laughing and said, “Well I don’t know what your definition of lion’s share is, but .03% is definitely not mine.” They both laughed and we spent the rest of our time discussing how we could strategically respond to what we heard.
The story exemplifies how critical it is to know your clients’ legal budgets. Imagine how much easier it is to help them meet or exceed their budget goals, look good to executives, effectively retool resources or strategically partner for better outcomes if you know their budgets.
It can be a difficult question to ask, and it needs to come from a place of wanting to help them effectively and efficiently utilize their budgets, but we often find clients are willing to share their total legal budget when the relationship is a valued and trusted partnership. If they are not willing to tell you, it is often a sign of weakness in the relationship. Ask your clients if you don’t know, and see what you learn about their budgets as well as your overall relationship.