Big accounts: Tips on leading and managing key client relationships

This article reports on the progress of an ongoing study that investigates how London law firms are responding to significant commercial pressures through the effective management of their key client relationships.

The research is evolving, but already a number of practical steps that firms can take to effectively manage their key client relationships are emerging. There are five key learnings to date.

1. In a number of instances, remuneration and reward structures are encouraging behaviours that are inconsistent with the long-term outlook that key account management requires. On average, it takes four years for an organisation to transition from having no key account programme to one that is effective, drives income growth and strengthens client relationships.

2. Key account management is not a sales initiative. It requires cross-functional buy-in, organisation-wide understanding and business-wide structural and process change.

3. When developing the leadership skills of client partners, firms should take a strengths-based approach. Use 360-degree feedback to identify where client partners are already highly effective and further develop these competencies. Research has found that developing profound strengths in a few key areas rather than ‘fixing’ weaknesses greatly enhances an individual’s overall performance.¹

4. Cultivate and reward T-shaped management.² Those practicing T-shaped management deliver two performances: results in their own role (the vertical part of the T) and results by collaborating across the firm (the horizontal part of the T). Firms should incentivise and reward client partner behaviours on both axes.

5. Revised systems and structures to support key account management will only flourish if there is a culture of client care. ROI will only be achieved if there is a genuine ‘me to you’ mindset shift, with the emphasis moving from client partners’ billable targets and utilisation figures to clients’ challenges and concerns.

Any research in this area requires a focus on the role performed by the client partners who lead these complex, boundary-spanning relationships. Leading these relationships can easily result in more time being spent on internally-focused activities than with the fee-paying clients. It is in this context that the study explores the enablers and impediments that client partners encounter when attempting to align peer activity (at the partner-to-partner level). Here, conventional hierarchical relationships between leaders and followers are frequently replaced by more ambiguous relationships among professionals of equal standing.

The starting point for the research, and the fundamental question that it aims to address, is therefore: How can client partners secure the commitment of their peers to develop key client relationships?

Leadership and firm culture

In addressing the research question, key studies from the fields of key account management and leadership were reviewed. A third, critical aspect, also considered the appropriateness of simply ‘importing’ theories from these two fields into the unique structures and culture of law firms.

Compared to their corporate counterparts, law firms remain essentially democracies, with ultimate power remaining in the hands of the individual partners.³ Indeed, there is widespread agreement in literature that, among the most significant challenges facing ?leaders in professional service firms is the design and implementation of strategy and securing the alignment of other partners.⁴

Taken together, the fields of key account management and leadership, combined with the structures and culture of law firms, highlight two main areas for investigation:

1. agent: whether there is a set of leadership behaviours client partners should adopt as agents in securing the commitment of peers on key account activities; and

2. structure: the extent to which the structure and characteristics of a law firm dictates the leadership behaviours of client partners in their efforts to secure the commitment of peers on key account activities.

Research to date

Semi-structured interviews were conducted with client partners from a cross-section of City firms. Specifically, their input was sought in relation to their experiences as:

• ?a ‘leader’ – their experiences of securing the commitment of peers when leading a key client relationship; and

• ?a ‘follower’ – their experiences of the effectiveness of other client partners in securing the commitment of peers when leading a key client relationship.

This ‘dual track’ was possible as client partners frequently lead a key client relationship while also being a team member on one or more key client relationships led by other partners in ?the firm.

Key findings to date

1. When a stoppable force meets an immovable object

There was a clear distinction between ?the behaviours participants identified as those of an effective client partner and ?the effect that the structures and systems of their respective firms had on their actions. For example, when talking about the scope of their responsibility as client partners, one participant commented: ?“This [the remuneration structure] is something for management. It’s not something I can influence.”

Participants were universal in their ?view that the short-term focus of law ?firm management acts contrary to the long-term investment required to develop key client relationships.

One participant reflected the mood of many when commenting on how remuneration structures drive partner behaviours in ways that are not always consistent with the aims of key account management: “I think the whole issue of how lawyers are measured has an impact. This whole idea of chargeable hour targets or even the whole idea of fee targets for partners counts against the need to focus on the relationship or makes it ?more difficult.”

To date, the research has identified that a client partner will spend between 100 and 500 hours a year of non-chargeable time in leading and managing a key account. And, it is not uncommon for a client partner to have more than one key account – leaving many to feel as though their efforts go unrecognised at the end-of-year reckoning with its almost inevitable focus on chargeable hour totals.

2. From leadership to management, and back again

All participants commented on the need for client partners to be adept in employing a diverse skill set that, in leadership literature, would range from a clear example of leadership through to a ?clear example of management. The data therefore suggests that an effective client partner is part leader and part manager, employing whichever behaviours and ?skills are most appropriate, given the task at hand.

Thus, citing one example of l?eadership, one participant commented: “He’s one of the leaders in the firm who will be constantly looking at the next ?big thing…and from a leadership perspective you need those sorts of people in an organisation.”

As an example of the management aspects of the client partner role, another participant commented: “I’ll make a note of what someone said they would do, will stick a deadline on it and I’ll put it on an internal webpage.”

Delegating management duties while attempting to retain the leadership elements of the client partner role was identified by several participants as a significant failing on the part of otherwise effective partners. In the words of one contributor: “There is always a case for rolling up the sleeves. It keeps you connected to what’s happening day-to-day with the relationship. The most successful client partners are prepared to get on the plane, work on the pitch document and piece together the client intelligence.”

3. The softer side of law

Eighty per cent of the participants commented on the importance of emotional intelligence in engaging with peers. One participant neatly encapsulated the majority of the participants’ views when stating: “Empathy is vitally important. ?Client partner A can perceive the likely impact of her actions while client partner B will stumble in and say something and not hit on the fact that he’s pissed off half the room”.

4. “Love all, trust a few, do wrong ?to none”

(All’s Well That Ends Well, William Shakespeare)

Although a result of behaviours as opposed to a behaviour in and of itself, trust was identified as an important factor by the overwhelming majority of participants. Here, client partners drew ?a distinction between cognitive and affective trust.

Cognitive trust is the confidence ?or willingness to rely on the technical ?legal skills of a fellow partner, while affective trust is the confidence one places in another on the basis of feelings generated by the level of care and ?concern demonstrated.

On the importance of affective trust, one participant commented: “You know who the ‘good citizens’ are and the non-team players. You’ll make decisions about where you refer work and who you involve based on those instinctively.”

5. The importance of disciplined collaboration

In one way or another, all participants referred to the largely autonomous nature of the partner role and the need for client partners to therefore give careful consideration to who they involve in developing key client relationships.

The prevailing view of participants is that teams of three or four partners will typically be responsible for leading and managing activity on even the very largest key accounts. A distinction can therefore be made between a tightly-knit team of core partners who are in regular ongoing communication regarding the progress ?and direction of a key client relationship and a much wider ‘auxiliary’ team involved in delivering specific legal advice at ?certain times.

This recognises a need for client partners to practice ‘disciplined collaboration’ with peers based on the vision for the client relationship and the needs of the client. In commenting on disciplined collaboration, one client partner noted that it is a two-way play in that partners in the ‘auxiliary’ team often have to take a view on what is best for them and their individual practices:

“What it comes down to is a view or even a calculation in terms of investability. I think people have a habit of saying partners should look at their relationship in the firm and their role as partners on a firmwide basis. I just don’t think that’s realistic because, at the end of the day, you have to have a view as to what’s going to make a difference to you and ?your practice.”

6. When all else fails, involve central management

A view expressed by more than one contributor is that the last resort to gaining the commitment of others – but something that needs to be employed on occasion – is to involve central management. One client partner described this as “the nuclear option”.

It was suggested that involving management in this way may ultimately tarnish one’s standing among peers and, in any event, may serve only to ensure compliance and not commitment from the individual(s) who are the target of central management’s attention.

The practicalities

The research has generated significant interest in the topic and the above points represent only a selection of the findings. While City firms have been the focus to date, the outputs are likely to be relevant to a wider number of law firms and potentially to other professional service businesses.

It is too early in the ongoing research to draw conclusions and generalise findings, but the following points are worthy of note.?

1. Pay greater attention to investing resources for the development of talent frameworks, improvement of processes and provision of broader training to focus, engage and develop client partners. It is essential that reward systems are adjusted to recognise good practice and long-term investment. The vexed question of partner remuneration is, unsurprisingly, a recurring theme. In some instances, there is a clear case for a greater emphasis to be given to client partner inputs (behaviours) than outputs ?(fee income).

2. Client partners should look beyond the boundaries of their client teams, practice areas, firms or sectors for inspiration and examples of good practice. Some firms could learn from those to who they claim to be closest: their clients. This could also represent opportunities for collaboration. Take time as a firm to identify the upside of more effective collaboration between peers. Where possible, quantify ?these in terms of their likely i?mpact on growth. Use this data as evidence for broader behavioural change programmes.

3. Complement changes to systems and structures with a unifying vision or purpose for client management that inspires people to commit to a cause greater than their own individual goals. This applies both at the programme level and in relation to each key account. This is straight out of the ‘textbook’ of transformational leadership theory, but studies have shown time and again the importance of a common cause in elevating performance. However, when drafting an inspiring vision, it is important that competition is ‘externalised’ – i.e. competitors are clearly positioned as those outside the organisation rather than colleagues.

4. Cultivate and reward T-shaped management. Those practicing T-shaped management deliver two performances: results in their own role (the vertical part of the T) and results by collaborating across the firm (the horizontal part of the T). Promote and recruit for T-shaped behaviours and, once again, make amendments to reward and remuneration systems where necessary.

5. Identify and invest in opportunities for client partners to engage with and work alongside colleagues outside of their immediate practice areas or existing networks of internal relationships. Promote the development of diverse networks with numerous weak ties between members as opposed to small clusters with deep ties. This will facilitate the flow of information across the organisation and provide opportunities for innovation.

Next steps

The intention of this research is to help City firms to better understand how they can train, motivate and enable client partners to deliver competitive advantage by better managing key client relationships.

To be involved in the next phase of the research and receive a copy of the findings, please contact Greg Bott at g.bott@programme-member.henley.com or on +44 (0)20 7160 3488.

Greg Bott is head of the client development centre at UK law ?firm Addleshaw Goddard ?(www.addleshawgoddard.com) ?and a research associate at Henley Business School, University of Reading.

Endnotes

1. See The Extraordinary Leader: Turning Good Managers into Great Leaders, 2nd ed, J Zenger and J Folkman, McGraw-Hill, 2009

2. See Collaboration: How Leaders Avoid the Traps, Build Common Ground, and Reap Big Results, MT Hansen, Harvard Business Press, 2009

3. See Aligning the Stars: How to Succeed when Professionals Drive Results, JW Lorsch and TJ Tierney, Harvard Business Press, 2002

4. See Lorsch and Tierney; Managing the Professional Service Firm, DH Maister, Free Press, 2003; ‘Heterogeneity in Professional Service Firms’, N Malhotra and T Morris, Journal of Management Studies, 46 (6): 895-922, 2009; and The Mirage of Ownership, S Mayson, 2012