Friday, April 20, 2007

Lawyer-Client and Lawyer-Partner Relationships

I'm back after finishing some papers. One of which was to do with lawyer-client relationships and the interaction between them. What is crucial is the creation and maintenance of trust that has to occur. Most of the research that has been done on the interaction between lawyers and clients has centred on small firm lawyers and individual clients. This gives a distorted picture of what takes place because this type of client is usually a one-shot client, so there's no need to consider the long term effects of the relationship because there aren't any. Whereas in the corporate sector with repeat player clients long term relationships are important.

Two recent forays into this area are of interest. One comes from a blog; the other is an article in the most recent issue of the International Journal of the Legal Profession.

A recent blog, "What the Thunder Said" took a different slant on this by commenting on how clients compliment their lawyers for the success of the job. She sees this as a tactic by clients to obtain discounts on future work. Perhaps what is less clear for those of us in the west is whether the tactics of Chinese clients are typically oriental. I suspect not. As I showed in my paper, there is considerable negotiation over the final fee with lawyers often taking a substantial hit.

In the IJLP article, "Social Capital and Knowledge Acquisition in Professional-Client Relationships" by Suseno, Pinnington, Gardner & Shulman, the role of networks established through constant interplay is demonstrated by the use of social capital which the authors define as "the professional's privileged access to resources that is established through networks and social trust with clients". This enables lawyers to obtain business-specific knowledge about their clients that ties them together. It almost creates a kind of interdependence that becomes difficult to shake off. And so the barriers to entry are made steeper and steeper for others.

Both statements are talking about similar things. The Chinese call it guanxi and western social scientists refer to social capital, but it's all about forming and keeping relationships alive and meaningful.

But let me wrap this up with a different relationship. I'm not a client, but I am an academic and I'm married to a partner in a big law firm. What then is the status of my relationship versus those with clients? The answer ought to be obvious but it's not.

I was fast asleep the other night when I was woken up at 3am by a furious argument. My wife was on the phone to a lawyer on the other side of the deal and they were engaged in "hard bargaining". It was also depriving me of sleep. It went on for almost an hour. I dozed fitfully, then thankfully relapsed into sleep again. I think there could be a role for further discounts in legal work. Only they won't be for the clients. No, they should be negotiated by partners of partners for sleep foregone. It would be a literal way of converting sleep debt into a cash profit.



Wabisabi said...

I wonder if the client called at 3 am deliberately to negotiate for discount in the hope that your wife would agree to anything just to get back to sleep.

I think 'soft' tactics like compliments and gifts are more effective for most clients. 'Hard bargaining' should not be attempted by anyone except in-house counsel - there are usually so much maneuvering of words. If a layman could out-talk a partner than he or she must be some layman indeed.

Legal Eagle said...

Hey John - that's pretty harsh, waking you and your wife at 3am. I hope the client apologised...but if they were ringing at 3am to negotiate reduced fees, I think they would have had limited tact.

What do you think about outsourcing of legal questions to Indian lawyers? Have written a post here, but suspect you know 20 times more than I do.

John Flood said...

Thanks for the kind words. Fortunately, late night calls are a rarity. On the other hand, she has pulled quite a few all-nighters when a deal is ready to close.