Key Account Management for Law Firms: To Do or Not To Do?

Strategic account management, also known as key account management (KAM), is a discipline that focuses on building strong and mutually beneficial relationships with a firm's most important clients. Those relationships are important because, in many firms, 20 percent of clients account for 80 percent of revenue. The loss of just one major client relationship could be damaging to a firm’s reputation and bottom line. According to McKinsey, well executed KAM programs with diverse, multidisciplinary client teams can increase revenue from large client relationships by 5-10%, while maintaining profit margins. However, Accenture points out that not all key customers are profitable noting that more than half of the companies it surveyed in a 2011 Insight study recognized that they needed improvement in selecting key accounts.

The primary objective for key account managers is to maximize profitability from each major account by entrenching their firm as the “go-to” business advisors. To achieve this, they develop and implement a strategic plan that sets out business objectives and identifies the services that addresses client needs and will generate sales. Managers also use their knowledge of each major account to identify opportunities to further service client demand, and open additional revenue streams.