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Quality Management—The way others have prospered

by Geof Cox and Anne Radford 1991

“The costs of poor quality in service firms absorb 40% of people and assets" (Thriving on Chaos by Tom Peters)

“High quality, high service firms return, on average, twice as much on invested capital as do their typical low-end counterparts." (The Renewal Factor by Robert Waterman)

“To compete and win, we must redouble our efforts- not only in the quality of our goods and services, but in the quality of our thinking, in the quality of our response to customers, in the quality of our decision-making, in the quality of everything we do” E.S.Woolard, CEO DuPont

What is Total Quality Management

J.S.Oakland, Exxon Chemical Professor of Total Quality Management at Bradford says that it is about “meeting the customers requirements”

Jane Lister, Managing Partner at the Plymouth law firm Foot & Bowden spoke at the Law Society's 1990 National Conference in Glasgow and said that for their firm it was “striving for perfection in the context of the advice and service given to the client”

6 ways the TQM helps businesses prosper

1. Quality businesses talk to their clients to find out what the clients want. For clients of banking, high technology and manufacturing 'the personal touch' is considered more important than convenience, speed of delivery or how well the product works. This is according to a survey carried out by Ernst & Young and published in 4 June 1990 Fortune magazine.

2.Quality businesses adopt the customer service rules 1 and 2: Rule#1 - The Customer is always right , Rule#2 - If the Customer is ever wrong, refer to Rule#1 .... from a sign carved in granite outside Stew Leonard's store at Norwark, Connecticut (Passion for Excellence by Tom Peters).

3. Quality businesses set themselves the task of being better than their competitors and setting new standards for work in their field. Japanese companies have been very successful with this approach. The Just-in-Time method of producing goods has been adopted in many other countries. Companies such as Canon and Honda have built up their businesses by selling quality products at a price much lower than the competition and developing new products for new markets thought irrelevant by the competition. Sam Walton built up his chain of Wal-Mart discount stores by only opening a store in towns which had populations under 50,000. After dominating that area, he went on to the next contiguous area, town by town, state by state. Wal-Mart Stores is now the largest discount store chain in the United States and is considered to be one of the best 100 companies to work for in America..

4.Quality businesses listen to their customers. When they do listen to their customers, they reduce the amount of money spent on putting things right. Since this can be anywhere between 25 to 40 % of sales it is worth doing. Philip Crosby in Quality is Free maintains this is the case because the cost of putting in training and systems so that people do the right things first time is so much smaller than the cost of putting things right.

5. Quality businesses act on customer complaints. They know that they must manage initial complaints, otherwise they will be handling many more complaints. There have been many studies on complaints. These figures are in the middle of the range. Only 1 in 25 customers will complain directly to a company. However, each dissatisfied customer will tell 10 others about the experience. So when a company hears about a complaint it knows there could be 25 people who are dissatisfied and 250 people who know about that dissatisfaction. As a Hospital Administrator put it, “Having 95% happy patients in a 600 bed hospital means that at any given point 30 are thinking about suing you for malpractice.” If customers think their complaints have been dealt with promptly and with concern, between 82 and 95% of the customers will come back depending on the industry according to information in Thriving on Chaos.

6. Quality businesses involve everyone and expect them to contribute to the company. These businesses know that positive expectations yield positive results. Negative expectations beget the opposite. In The Renewal Factor, Robert Waterman gives many examples of companies which use positive expectations to achieve commercial success. Robert Rosenthal and Lenore Jacobson's research Pygmalion in the Classroom showed that student achievement mirrors teacher expectations more than it does actual student ability. Follow-up studies carried out in business showed that if a manager believes an employee is competent and that his or her work is worthwhile, the employee is likely to be more effective and to see the job as more rewarding. An article in Fortune (June 4, 1990) quotes the experience of several service organisations who found that when employees make their customers happy, they make themselves happy, and are less likely to change jobs. Ken Blanchard in the One Minute Manager puts it this way “People who feel good about themselves produce good results”.

Why should law firms be interested in Total Quality Management?

Some law firms would say they follow all the basics of quality management and are continually improving their procedures to bring quality service to their clients.

Unfortunately, many firms do not. One of the reasons solicitors give for this is they believe quality management means being creative rather than methodical.

In fact, quality management means being methodical about:

finding out what type of service clients want, and what type of service they receive from you, your firm and from your competitors.
preparing yourself to talk about technical subjects in a non-technical way so that your clients and colleagues understand the value of your advice.
having regular meetings with your team so that they know what they need to do by when in order to meet the client's expectations.

Here are some of the good things law firms are doing for their clients and some new things they could do.

1 Listening to clients

Client care programmes are being developed and put into place. Training activities and conferences focus on what the lawyer can do to ensure that everything goes smoothly for a client.

Listening is a fairly precarious activity and needs to be developed as any other skill. According to studies referred to in the October 1990 "Law Practice Management", a publication of the American Bar Association, 75 percent of what we hear is heard incorrectly and of the remaining 25 percent we forget 75 percent of it within weeks or days. This leaves a lot of room for error in taking instructions correctly and in meeting client expectations

2 Talking to clients

Some law firms collect information from their clients about the service they receive and the service they want. The firms may commission the research themselves or participate in Customer Satisfaction Surveys which are conducted for several law firms.

Unfortunately, there are still those firms who think such information gathering is too expensive or regard it as foolhardy to seek out criticism.

3 Following the customer service rules

Clients expect high quality service these days. They are in a buyers' market for legal services and will transfer their business from one firm to another if they think they are not being served well.

Clients who are continually improving their own management processes may expect their professional advisers to be doing likewise.

When law firms began paying more attention to their clients through in-house client lunches and prestigious hospitality events some clients enjoyed this type of attention and others regarded it with suspicion. This has led many firms to select activities much more carefully so that they do the right activity for the right person.

4 Being better than their competitors

Analysing competitors in specialised areas of law is becoming more usual. Answers to the questions such as Who are our competitors? and Who are our clients? are helping law firms decide what their own service is , how it is different from their competitors and how they can focus their efforts on other potential clients.

The analysis needs to include other law firms and other groups such as accountants, financial analysts and specialised consultancies.

5 Acting on complaints

Many law firms have a established a way of handling client complaints so that they are dealt with quickly and effectively.

However, on a national level, dissatisfaction with lawyers has been increasing slowly over the last decade. According to the Solicitors Complaints Bureau, there are 20,000 annual complaints. Using the complaints multiplier, this means there are likely to be 500,000 people dissatisfied and a total of 5 million people who know about that dissatisfaction. Overcoming such negative opinion will take much more effort than preventing it in the first place.

6 Involving everyone

Department, group and team meetings to discuss work progress and marketing initiatives are usual activities in a law firm.

There need to be more client meetings involving everyone who handles some work for that client, more inter-departmental meetings where specialists bring colleagues up to date on legal issues relevant to their clients and more department or group meetings attended by secretaries.

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