Marketing and the next generation of law firms
New business structures for law firms, coming soon with the various stages of implementation of the Legal Services Act, need not be as threatening as some solicitors fear. If you think about what they might give you, you might be surprised how attractive they are.
A couple of years ago I ran a training course entitled ‘Marketing yourself and your firm'. In the afternoon, delegates split into three groups to tackle a marketing exercise. The first group was a fairly typical high street practice, the second group was a niche start-up firm, and the third group was asked to set up a fictitious pilot chain of six branches of ‘M&S Legal’ (apologies to Marks & Spencer).
At first the M&S Legal people would be rather glum. They were qualified and experienced professionals, and certainly never intended to go and work for a retail high street chain – even one as respected as M&S. The other two groups would be a little smug, glad that they had not drawn the short straw and were able to retain what they saw as their professional status.
But, as each exercise wore on, there was a noticeable shift in the energy and enthusiasm among the groups. While the traditional high street law firm had some good ideas and some enthusiastic members, it was hampered by a number of legacy problems, including lack of enthusiasm among mature partners and a consequently limited marketing budget, and lack of modern IT systems and expertise, most notably an effective client database.
The niche start-up practice was able to invest in a modern brand and the latest technology, and implement best-practice systems from the outset. Here, the limiting factor was simply the lack of time available to the partners, who quickly became busy servicing clients and had little free time to devote to building the practice.
However, by the coffee break, our reluctant retail chain had settled down and applied itself to the practicalities of the task in hand. The boost in energy and enthusiasm always emerged as this group started to realise what it could achieve with the resources at its disposal and freedom from the restrictions of a typical partnership structure.
A vision would emerge of bright airy modern offices in prime high street locations, with the latest branding. Reception areas would be spacious, welcoming and smart. Opening hours would reflect those of customer requirements, with two late evenings and Saturday opening.
At first it was assumed that it might be difficult to attract the right calibre of staff, especially with extended hours. But after tapping into the expertise of the M&S group’s HR department, it was clear it would be possible to offer more attractive packages of flexible working and benefits than any local high street law firm could afford. Partnership prospects would be lacking, but some innovative share incentive schemes were starting to look very attractive too.
Of course, quality control would be an issue – or would it? The real Marks & Spencer is renowned for its systems of quality control and customer care. Would it really be so hard to adapt those systems to handling a legal matter? After a while, the group recognised that, with effective systems for monitoring quality of service, investment in a detailed induction programme and a structured ongoing training programme for all staff, it would probably be able to ensure service at least as good, if not better, and delivered consistently across all its branches.
In terms of branding and launching the chain, it was a ‘simple’ matter of extending the current TV and poster advertising campaign script to, say, Twiggy buying a house and updating her will. High street locations would provide instant visibility. Point-of-sale leaflets would be available in all the retail stores and there would be extensive editorial coverage on the website, in the catalogue and in the M&S customer magazine. It was realistic to expect the board to support any well-thought-through marketing campaign financially.
So, while my first group, the traditional high street firm, had served thousands of clients in its 100-year history, it had no single accurate record of clients’ contact details, the services they had bought or the services they might need in the future. A coordinated programme of cross-selling was a far-off dream.
With the sophisticated customer database that would surely be developed for M&S Legal, the team started to have fun thinking about sales incentives. Conveyancing clients might receive a set of towels, or a voucher to spend in the M&S catalogue. Of course there would be sales incentives for staff too, with sales competitions among the branches and mouth-watering prizes.
By the end of the afternoon this group was buzzing, simply because (in theory) it was able to achieve so much with the resources at its disposal and it was not hampered by any of the problems that typically frustrate business development initiatives within law firms.
The exercise demonstrated that there will be problems and barriers facing companies entering the legal services market – such as the AA or Which? – but large companies such as these have a ‘can do’ attitude and high-calibre management teams that focus on understanding client needs; and they are prepared to invest. They will direct their vast and experienced management resources to addressing and overcoming these obstacles, with a commitment to getting it right.
Companies and financiers are taking an interest in this profession because it is a fragmented market and, as in any fragmented market offering similar goods or services, there are opportunities for economies of scale, efficiencies and, consequently, increased profits.
Build your brand
So how can law firms face up to the sheer might of these corporate Goliaths? How can they possibly compete with established brands, long-standing consumer confidence, vast marketing budgets, state-of-the-art IT resources, and dedicated specialist resources to focus on quality control, customer care, recruitment and training, and so on?
The corporates will be able to enter this market because they benefit from immediate brand recognition and customer confidence. They will launch with big budgets and dedicated marketing and PR resources and will be attractive to the first-time buyer of legal services who has no particular loyalty to their family solicitor.
If the Virgin brand, for example, can extend from records and beauty products to space travel, is it such a huge leap to see it moving from financial services to legal advice?
How would your brand image measure up alongside these corporate brands? Size isn’t everything, if you can differentiate yourself clearly. For example, Innocent drinks, and Tyrrells Crisps are examples of small, niche quality producers that have created a strong brand identity because they are sufficiently individual and different from their competitors. Invest in a professional brand design that is implemented consistently across all your office interiors, advertising, website literature and stationery (see box).
Managing relationships
Be in no doubt that the corporate marketing teams are already dreaming up any number of marketing programmes and incentives to seduce your clients. You have a diminishing window of opportunity to cement the loyalty of your existing clients. During this period you need to identify and capture the details of all your clients, and engage with them to ensure they are thoroughly satisfied and will stay with your firm.
But when was the last time they heard from you? From time to time, you need to remind your clients that you value their custom.
Many law firms I see do not value the information they hold about their clients, contacts and prospects. Maintaining a database of information that might help to identify needs is seen as a boring administrative task, not worthy of their valuable time.
The corporate marketer will research their target market and identify segments with similar needs, such as young families, empty-nesters and high-net-worth individuals. When targeting businesses, they may group their markets by industry or business structure, such as owner-managed businesses, partnerships or franchises. By understanding these groups they can tailor their product offering, services and promotion to particular needs, bundling services together where appropriate.
Too often, solicitors operate in departmental silos. At a recent client event, I met a lady who had just been through a messy divorce, made complicated by her business interests. We talked about various employment problems she was having. She was surprised when I mentioned the firm’s employment law service and questioned why she used a national employment consultancy for employment advice, when it was a service available from her own solicitor.
Compare this to the retailers who operate loyalty card schemes and have an in-depth picture of your family life via your shopping patterns. Such data is of immense value to their marketing strategists. These companies are masters of maximising your spend with them – they will leave no stone unturned in selling on additional services to clients. Law firms need to adopt the same approach.
Quality standards
As part of their launch programme, the corporates will develop and test all their service processes and systems to ensure they adhere to, or exceed, service quality standards that have been researched and agreed with target clients. Law firms that are serious about competing need to address themselves to customer service. Few firms tackle this in a very robust manner, a manner that would include independent research and remedial training where problems are identified.
The corporates will look at the whole customer experience from the first encounter on the telephone, to their perception of the office (including toilet facilities) as well as the quality of advice given, and follow up. Investing in independent market research is standard industry practice for these marketing departments.
If you want to find out how clients really perceive your firm and drive standards up, consider investing in a mystery shopping programme and use the findings to inform your training and development activities.
Focus on efficiency
You might have heard the expression ‘you cannot manage what you do not measure’. Few firms we come across record the source of new business effectively. So when it comes to setting budgets and reviewing returns on last year’s investment, it is difficult to make an informed decision about which marketing activities yielded the greatest return. Make sure you ask all new clients how they heard of you and record this information.
Does it really make good business sense to have partners researching and drafting articles for your firm’s newsletter or website? Once you have maximised billable hours, you need to ensure that business development activities are handled as efficiently as possible, with fee-earners focusing their efforts on personal contact with clients, intermediaries and potential new clients. Everything else can be outsourced.
Even a relatively small law firm can now buy in an impressive range of marketing support to ensure they develop their market presence. Take some time out to carry out a strategic marketing review and consider whether activities are being undertaken by the appropriate people, or whether they can be outsourced more cost-effectively.
A desire to retain control in-house comes at a cost, and this is just the sort of cost that will be seen as an easy economy.
Technology works
I have already mentioned the customer database – but would emphasise again that corporates entering this market will place a very high value on management information systems. Getting your database ship-shape will help you to market your practice effectively, and will also increase the value to potential investors as it ensures that you are in a better position to maximise returns on investment.
Your clients of the future are techno-savvy and will expect you to communicate with them electronically. Failure to do so, and having an outdated website, will make you appear old-fashioned.
This is equally true for your employees of the future. You will be in competition with companies who will compete aggressively for the best talent and take an enlightened approach to adopting new technology.
Opportunities for increased profits through increased efficiencies, economies of scale and effective marketing strategies are there for all to exploit – proactive law firms as well as corporates. In this particularly challenging time, solicitors who address themselves to getting their firms fit for the future and embracing change will be in the best position to take advantage of opportunities that arise.
As you consider how to prepare your firm for the coming changes, it is essential that you look at your brand, your service standards and your marketing activities and seek to develop a clear strategy to take you into this new era of competition.
Sue Bramall is director of Berners Marketing
This is an adapted and updated version of an article that originally appeared in the October 2008 Law Management Section magazine, Managing for Success. www.lawsociety.org.uk/lawmanagement
Customer relationship management and related issues discussed in this feature will be the subject of our next Gazette In Business supplement, published at the end of March.
A recent edition of BBC Radio 4’s Law in Action (27 January) started with the phrase ‘there is an apocalypse on the way’, writes Alastair Moyes. I suggest the apocalypse is already here – solicitors need to consider how their services will compete with instantly recognised, trusted brands such as Which?, More Th>n, Allianz Insurance, the AA and Saga.
These organisations have established relationships with the people solicitors’ firms need to attract to survive and prosper in a post-apocalypse legal services world. They have the marketing power to reach into the market to capture any enquiries before your firm has the chance to compete. Your brand must be as easily understood by those clients you wish to retain or attract.
The question senior partners and marketing managers must start with is: ‘What does your firm’s brand mean to your current and future clients?’
Brands and branding are techniques at the centre of consumer marketing. These terms are often misused and confused with the names of businesses and what a customer expects from goods and services. Legal services are no different in branding terms. Most solicitors’ firms have allowed their brands to languish under complex partnership names.
How do your clients perceive the value of the services you offer? From your name or logo, a potential client should be able to unpack all the benefits of the services you offer. It does not necessarily matter what your firm’s name is – the challenge is to inform, or even educate, your target clients about what your brand stands for in terms of benefits to them through the service you provide.
For solicitors to compete against national trusted brands on limited promotional budgets, they must identify who their future clients are and make sure they understand the value of their services.
Your aim for branding is to establish the competitive benefits of using your services and repeat those benefits in as many different messages you can. This on-going process will establish a brand value for your firm with the client, who can then use that brand information when they decide to choose between the legal service options available to them for a particular problem.
In principle, these are the same techniques the big brands use, but solicitors’ firms have an advantage. Solicitors are specialist, highly trained, usually locally available, experienced legal professionals, set up to service the legal needs of their clients. This is a lot to get into a name or logo, which is why it is a constant process to define and re-define the benefits of your services and find innovative ways of getting that message across.
The Law Society’s recent promotional campaign made an excellent statement that solicitors are ‘Qualified to Answer’. For your firm, make sure you have the word ‘solicitors’ in your brand name. Then look inside your firm for the benefits of the services you offer to current and future clients. What makes your firm different? What benefit does the client get from that difference? If the client could say ‘so what?’, you do not have a recognisable benefit.
The process of benefits analysis conducted for each service you offer then allows you to build your firm’s brand for potential clients. Work those benefits into all your firm’s promotional material, emails and website, then keep reviewing those benefit presentations. Look at who reads or receives them and find more of the same types of people (new target markets). It is all part of building your firm’s brand value and worth every penny and the time spent to do it.
In a future In Business article, I will look at how to define client benefits.
Alastair Moyes founded Marketlaw with David Monk. They are co-authors of Marketing and Legal Services, published by Law Society Publishing (0870 850 1422)
