Forum Magazine: The Reality of Legal Buyers Generation to Generation

Topics: Billing & Pricing, Client Relations, Corporate Legal, Forum Magazine, Legal Innovation, Millennials

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How will tomorrow’s clients differ from today’s?

What better way to predict — and prepare for — the future than to look at how the younger generation of legal buyers differs from their older peers. By comparing the demographic profile, attitudes and buying behaviors of the two groups, lawyers can start to prepare for what lies ahead as the older age range gradually retires and the younger, more modern buying approach becomes the norm.

The statistics supporting this article and the infographic come from Acritas’ annual Sharplegal study. The analysis compares the results of those under 50 years to those over 50 years from 1,782 telephone interviews with legal buyers across the globe during 2016.

The overwhelming findings are that younger legal buyers are more astute spenders and more international in both their outlook and in their actual location. This means they pay more attention to value and require firms to think beyond their own backyard.

A key demographic difference is that the female contingent is more than 50% higher in the under 50s. Women tend to have different attitudes and buying behaviors than men. They are more likely to want a more rounded service from their law firms whereas men tend to be more focused on the core expertise.

Women are also more likely to recognize female star lawyers than their male counterparts —women want more gender balance on the law firm side. This has implications for firms who aren’t retaining and promoting enough women.

We will now explore each of the main findings in detail and consider the implications for firms:

More diverse

Younger clients are more diverse and expect the same form their external advisors. There is significantly higher proportion of females and the under 50s in general are more internationally spread. North America, in particular, has a much older age profile. They’ve grown up in a competitive world with globalization, financial distress and instant communication methods as the norm, creating a more global, commercial and spend-savvy mind-set.

More budget-conscious

They require firms to be better at budgeting and more cost-conscious; they’re more likely to adopt modern procurement methods and measure performance. Typical behavioral traits:

  • Significantly more likely to have met budget and to have set objectives;
  • Work by fixed fee twice as often; and
  • 37% more likely to involve procurement

More likely to increase spend

Because they’re more likely to reside in high-growth industries and regions, they’re more likely to be increasing spend.

More demanding

They expect firms to deliver higher standards and more value-added services. They’re hungry for knowledge, demand responsive service and are less satisfied with current standards of service in the profession.

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Attention to Spend

For most of the younger client group’s senior working careers, the Western world has been in recession, and the drive for greater legal value has been the norm. Younger clients are more cost-conscious, more likely to have set objectives and more likely to have met their budget last year. Clients under 50 report twice the use of fixed fees, which undoubtedly aids them in meeting budgets and may be explained by their higher likelihood to have involvement from professional procurement. The discipline and objectivity this joint approach to buying legal services instils will stay with these clients throughout their careers, driving a sustained focus on budgets.

Firms must respond to this need for greater awareness and control around costs to win the attention and loyalty of younger clients. Clients want accurate budgets based on real historical data, not gut feel. They want to be kept abreast of spend levels. Some desire more communication, more open dialogue around resourcing approaches. They need to be made aware when costs are likely to go outside of plan and be alerted to what the drivers are. Overshooting fee estimates will alienate younger clients. Improved data and transparency around fees will help to increase trust from clients.

Despite their strong focus on managing legal budgets, younger clients are more likely to expect to increase spend moving forward, suggesting perhaps that they are more realistic about the growing extent of their legal needs.

You can read the full article in the current issue of Forum magazine.