Five Million reasons to maintain regular client contact
If there was ever a reason for maintaining regular client contact, this tale might give you some pause for thought.
Lawyers are quite rightly proud of the number of Wills they hold for clients. They consider every Will to be “money in the bank” that they’ll cash in when the granter eventually passes away. The number of Wills a lawyer has in his Wills Bank can be a key feature when thinking about selling the business or merging with another law firm.
All of this is valid, but just how accurate is this assessment of value lawyers place on their Wills Bank?
Here’s what we did to find out
Over the course of the last couple of years, myself and a colleague, David Ballard, conducted a pilot exercise with a number of law firms. We set up a company to manage the Wills review process for lawyers. To go into all of the detail of what we did would be tedious but, essentially, the process was as follows:
We created a database into which we entered details of Wills held by the firms we were working with. The data was not taken from an index or a spreadsheet but from the actual Wills. We entered details of over 18,000 Wills. It was very time consuming!
We then checked the address details against the firm’s Practice Management system, updated the address where appropriate and then prepared letters to be sent out from our client firms offering a Will review. We did this on a weekly basis over many months. Over 13,000 letters went out to our client’s clients. Over the weeks and months, we recorded the response from clients. All very interesting up to this point and it would be fair to say that the response from clients was positive. Our clients prepared new Wills, Powers of Attorney and carried our other legal work and fee income came in.
A very interesting statistic
One very interesting statistic came out of this exercise and it was this – 20% of the letters sent out came back marked “gone away”. In terms of numbers, that meant that over 2.600 letters sent out had been returned. The firms we were working with now had no idea where these clients now lived. Now, put yourself in their position.
It is never good to know you have lost a client. It might even be upsetting to know that you have lost a client for whom you hold a Will and the potential revenue that could bring. What might also cause you some distress is the knowledge that you have lost out on the conveyancing – probably a sale and purchase and potentially the estate agency as well. I feel your pain as you begin to tot up the numbers!
And the Five Million Reasons?
We did some numbers and worked out that if an average executry generates around £2,000 in fees (and we’ve been told that that figure is a little bit on the conservative side) then, on the basis of the 2,600 letters that were returned marked “gone away” it means that our pilot firms will no longer have access to £5,200,000 in fee revenue in the coming years. Now that is a staggering amount of money!
Can you afford NOT to maintain regular client contact? Are you prepared to give up significant fee income by failing to remind your clients that you are their lawyer? Even if the contact is only 3 or 4 times a year, it keeps your firm’s name is in front of them and allows you to build up a relationship with them.
Try working out how much you might stand to lose. Calculate your own average charge for executry work. Count the number of Wills you hold. Take 20% of those and multiply it by your average executry charge (are you still with me?). This is the amount of money your firm is likely NOT to earn if you don’t keep in regular contact with your clients – particularly those for whom you hold Wills.
Oh, and lest I forget. Just for good measure throw into the mix all those lost estate agency and conveyancing fees of those clients who have “gone away”. You know what you charge – do the sums.
So, there you go. Is the assessment of value accurate? You bet! But whether you will benefit will very much depend on you actually retaining the client.
Client Communications can help you to maintain regular client contact. You really have no excuse. Our eMail Newsletters, eMail Marketing, e- Promotions and Direct Mail services are affordable and effective.
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