Filling the Pipeline with Client Care

Just as there is, more than ever, an economic imperative to ‘flush’ cash through, it is vital for firms of all sizes to ensure they are managing the front end of their pipeline. Technical expertise is only valuable as long as the fee earner is achieving sufficient client instructions – from new or existing clients.

The Ideal Client

Your ideal client will probably already be on your database. It may require some thought, but all key fee earners should identify their most valued clients. These are the people with whom you want to be deepening the business relationship. The questions you should be asking yourself are:

. What are their business needs?
. How can you best service their requirements?
. Who will best handle the relationship?

Leading the Initiative

It is important to recognise that not all clients will make it onto this list. Therefore, clients should be categorised into, broadly speaking, the ‘most valued clients’ (MVCs); ‘key clients’ (KCs); and all other valued clients (VCs). It should go without saying that service levels should be high for all clients, but those clients in the top two categories clearly need the most dedicated attention.

The client care initiative should be led from the top. Buy-in is needed at all levels to make sure fee-earners are clear about the business they want; how they select their clients; how they price the work; and, crucially, how well they know their clients. Once these points are established, the initiative can really get underway.

Individual Service

The answers to the questions above will naturally be different for each client, but having a clearly prioritised client list will make the process much more valuable. In brief, the criteria for identifying the top priority clients should involve opportunities for future business and referrals; the client’s success and growth potential; and the profile-raising power that the work brings to the firm.

The philosophy must always be to exceed client expectations. It may sound obvious, but ‘ticking the boxes’ simply isn’t enough. It is hard work, but once client care is firmly established as a conscious priority, you can begin really in-depth client profiling – to drive growth into areas of specific strength and business priority. This is an issue we will return to.

Unblocking the Pipeline

As the UK slowly emerges from recession, it is worth considering the impact on cash flow in small and medium sized businesses across the land. As has been acknowledged elsewhere, an upturn can be a dangerous time, putting extra strain on a firm’s cash flow and working capital management.

Our approach is based on the premise that the value-adding process in a law firm can be seen as a pipeline – instructions enter the pipeline, and cash emerges at the end. This is often in stark contrast to the approach that many professionals take – that the only important step is the ‘technical’ bit in the middle.

Capturing Value

Just as the pipeline should be constantly being filled with instructions, it is vital to ensure that all of the value created is actually developed, captured and billed, or significant losses will arise. In some senses, the effect of missing these steps, or doing them badly, is even worse than not bringing in the work in the first place - because all of the time and resources consumed in actually doing the work are wasted, as the cash doesn't come through as a reward.

Starting at the End

When it comes to improving cash flow, the key is to start at the end of the pipeline and work back. There are two major benefits to taking this approach. In the first instance, by ‘flushing out’ cash that you have already billed but not collected, and billing overdue WIP, you will create an immediate effect on your cash situation.

Secondly, by measuring each stage in the pipeline process, you can quite accurately gauge how long matters should take from beginning through to collection for each department, and thus provide fairly accurate cash flow forecasts (for your own management and for the bank manager!).

Prospering through the Upturn

Effective pipeline management is important for businesses of all sizes, but it has a particularly noticeable impact for smaller firms. Getting a firm hold on the billing and collection process, and ‘flushing’ cash through the pipeline, will help firms stay on a stable footing through a tough recovery. This will potentially create growth and acquisition opportunities – and will give lenders the confidence to back the winners in the new economy.