A good friend, the CMO of a global law firm, once described key account management’s position in the marketing mix as “the social misfit at the party that no one wants to speak to.” The other “guests” — social media and apps, websites and other collateral, pitching and PR — all create clear and immediate value. KAM, on the other hand, is complex and messy. It demands a lot of attention with no certainty of return. In summary, she said, “If it were a person I’d cross the road to avoid him.”
As difficult as a KAM program might be to launch and operate, senior marketers have little choice but to try. The legal market is increasingly international in scope. Clients are promised seamlessly integrated cross-border service. KAM — the means of protecting and serving complex client relationships via well-organized and cooperative client teams, then managing them for strategic growth — is how that promise is made good.
This article summarizes the principles of KAM. It looks at the cultural and organizational difficulties of undertaking KAM. It sets out a checklist of prerequisites for the implementation of a successful program. And it provides access to a simple but effective self-assessment questionnaire to gauge your firm’s preparedness for launching your own KAM campaign.
WHAT IS KAM?
Key account management treats client relationships as precious strategic assets of the firm (rather than as the fiefdoms of individual partners). Typically, a KAM program involves four distinct stages. These are:
• Gaining insight. Stage one involves gathering rich, insightful information on the client. This includes information on the client’s competitive position, structure and organization; the status of the firm’s relationship — strength and breadth of contacts, types of work, profitability levels and service level feedback; and the relationships the client has with rival firms.
• Assessing opportunities. The next stage distills this information into a set of strategic opportunities: Given the client’s business priorities, its relationships with the firm, and the firm’s own practice area/industry sector/geographical mix, where are the likeliest opportunities for future growth? And where do the threats to that growth lie?
• Converting the opportunities. The assessment undertaken in stage two then forms the basis of a strategic client team plan. An integrated team, ideally drawn from a representative cross-section of practice group and offices, is charged with actively pursuing these opportunities. Individual team members have the task of targeting and relationship-building with key individuals at the clients and for creating sales opportunities as a result. This is a long game and it brings us to stage four.
• Following up. Pursuing strategic goals requires sustained commitment. The importance of individual team members keeping to their part of the plan, and of feeding back the progress they make, helps to maintain overall momentum, deepens the team’s understanding of the client and contributes to long-term success.
NAVIGATING THE PITFALLS
Given this approach it’s understandable why so few firms genuinely embrace KAM. As a New York-based CMO said to me last year, “Who has time for all this?” Culturally, firms operating on the basis of short-term returns and “eat what you kill” have difficulty in creating mutually cooperative teams pursuing long-term goals. Many attorneys jealously protect their relationships, resisting the idea of introducing fellow attorneys to their contact. Even when teams do coalesce, activity is often piecemeal, tactical and sporadic.
MISSING THE TARGET
I run a training program for client partners on building successful key account teams. Part of the preparation for this program involves participants completing an online survey on their own KAM activity. Aggregating the results of this survey over time has given me some fascinating insights into the thoughts, motivations and reservations of partners when they are thrust into the KAM leadership role. Take target-setting, for example.
Nearly 90 percent of respondents say they do not set targets. Even for those who do, their targets are couched in the vaguest terms: “win more work”; “strengthen the relationship”; and so on. A vanishingly small number actually are prepared to set a specific figure. When asked why this is the case, the answers include excuses such as, “It’s impossible to anticipate future client demand,” and, “What if we don’t make the number?”
Fascinatingly, those few brave souls who do set specific, measurable targets explain how the practice of doing so actually modifies their behavior — it encourages self-examination, fosters aspiration and encourages greater entrepreneurialship.
What kind of targets do they set? Since, as observed, it is difficult to predict exactly how much work might arise from one year to the next, these goals are often expressed in terms of increasing the share of the client’s legal spend. They also apply a so-called basket of measures, seeing short-term goals — such as expanding the number of relationships and learning more about individual concerns — as perfectly valid successes on the path to longer-term sales growth.
LISTENING, NOT WAITING TO TALK
Another reason for KAM feeling so alien is that the relationship-building element of the plan puts a premium on strong questioning and listening skills. As valuable as these skills are, they do not come easy to many lawyers. Trained to provide solutions and appear commandingly knowledgeable, asking questions feels counterintuitive. “I feel naked,” said one partner I interviewed for my training. “It implies I don’t know all the answers.”
Yet clients consistently say how highly they value advisers who are genuinely interested in learning about their business. As the GC of an extremely large, global professional services organization explained to me: “I’m tired of being in meetings with lawyers where, rather than listening, they’re just waiting to talk. They need to ask questions and not feel ashamed at appearing ignorant about the detail of our business.”
YES, BUT …
A strong counter-argument to the virtues of KAM is that U.S. law firms tend to be more profitable than their global counterparts. At a conference last year I heard KAM described as a form of camouflage adopted by European lawyers to hide the fact that they’re not very good at relationship-building.
Cultural stereotypes aside, my observations are that the greater keenness in Europe (or, more particularly, London) to roll out KAM is driven by commercial calculation.As they expand rapidly on the international stage, they see it as a vital tool in helping to leverage their cross-border, cross-practice resources.
They recognize that legal-technical expertise is largely replicable. True competitive differentiation is created in dialogue with the clients that unearths — and helps them to service — deeper issues. Ultimately, KAM generates more work.
PUTTING IT INTO PRACTICE
So, recognizing that KAM is an increasingly important weapon in a firm’s client service armory, and that there are numerous deep-seated obstacles to instituting an effective KAM program, how can a firm go about launching a program? Here is a short set of ground rules that, in my experience, are essential for a successful campaign.
• Ensure high-level ownership. The firm’s senior management has to be seen to have a major personal stake in a KAM program’s success. It must invest its credibility, reinforcing the KAM message consistently in its communications, holding client partners to account and devoting commensurate resources to its success.
• Start modestly. It is often tempting to overreach, especially in the early stages of a program. When launching a KAM program there is a strong temptation to include more clients, more partners and more teams in the hope of gaining quick momentum and wide inclusivity. As noble as these objectives are this is a recipe for failure: It spreads resources too thin before a working process has had a chance to be tested, and it quickly undermines firmwide credibility in the process, consigning the program to the “just another failed initiative” junkyard.
How many clients should a firm start with? A good rule of thumb is one client for every hundred fee-earners. Once the team concept is proven and the teams are working well, then celebrate their successes and widen the scope for a second phase.
• Choose clients wisely. If you’re starting small it becomes critically important that each of the limited number of clients in the program belongs there as a commercial imperative, not because it’s the pet client of one of the firm’s big partner beasts or because the client’s name is a nice one to have on the roster. Clients should be selected using a set of consistently applied objective criteria including growth potential, strength of existing relationships, alignment with the firm’s industry sector profile and flight risk.
• Create the right team structure. One of the great benefits of starting with a small number of client teams is that it enables firms to draw extensively from the (usually relatively small) pool of partners who “get it”: enthusiastic, commercially minded, entrepreneurial and happy to work in a team. This is not to characterize them as selfless philanthropists; on the contrary, they are usually clear-sighted enough to realize that embracing KAM is a sure way to higher remuneration and in-firm kudos.
• Create the infrastructure. As much as KAM depends on the good will and commitment of the participating partners, it needs to be underpinned by a set of simple-but-robust processes. The larger and more complex the client relationship, the more important this becomes. Despite different firms adopting very wide-ranging approaches to KAM I observe three consistent elements:
• No. 1: Create the means for uncovering genuine client insight. Insight is about much more than information-gathering, but many firms confuse the two. The goal is not to assemble impenetrably thick wads of data about a client, but to distill into a digestible summary of the strategic motivations and challenges facing the client — and the opportunities for offering legal advice to which these give rise.
• No. 2: Employ robust strategy planning and action plans. Converting the opportunities assessment into a clear, well-defined strategic plan is the next step (and, as we’ve already seen, crucial for creating the necessary focus that turns aspiration into action). The strategy, in turn, is converted into a series of supporting tactics and actions that are owned by individual team members.
• No. 3: Ensure team implementation by training your leaders. I have steered clear of the subject of leadership up to now but individual implementation is very unlikely to happen without a team leader — usually the client partner — leading the charge. The leader sets the tone and vision, creates common purpose, encourages others — as well as holding them to account — and celebrates success. Ensure that the leaders understand what is expected, therefore, and support them with the necessary training or coaching if certain skills are lacking. (And I strongly believe that leaders are made rather than born.)
In my client work I use a diagnostic tool to assess a firm’s preparedness to undertake KAM. If you would like to gauge your own firm’s suitability I have created a short form online for readers of this article. Complete and submit the survey and I will send you, free of charge, a report summarizing your firm’s preparedness and benchmarked against the aggregate response. Be assured that all responses with be treated with absolute confidentiality.
The survey can be accessed at www.surveymonkey.com/s/VBVGGLV.
Meirion Jones is the principal of Client Critical, a consultancy specializing in embedding essential client service skills and behaviors in professional services organizations in the United States and Europe. He has occupied senior in-house client strategy roles at some of the world’s leading firms including Coopers & Lybrand (the predecessor firm of PriceWaterhouseCoopers), Allen & Overy and Lovells. He led the global client services initiative for Reed Smith and continues to consult for the firm. Email: email@example.com.