With the recession apparently settling in for the long haul and law firms feeling the pinch, it is unsurprising that many are looking hard at what cuts can be made to outgoings to maximise dwindling profit margins and ensure as many jobs as possible are saved.

One might be tempted to slash marketing spend. Some may think that the benefits of marketing are intangible – firms did fine without it until a few years ago and, ultimately, those marketing bods do not bring in all-important fee income.

Such an approach is a mistake, says Alastair Moyes, director of Marketlaw and co-author of Marketing Legal Services: Succeeding in the New Legal Marketplace – particularly given the spectre of competition from non-law firms entering the legal market.

‘It is essential for a firm’s survival to market itself in the downturn,’ says Moyes. ‘The new competition from branded legal service providers will take an increased percentage of the market. Firms need to promote the benefits of their services to be able to hold on to existing clients and to have any hope of attracting new instructions.’

It is important, he adds, to distinguish between marketing and promotions – the former being about the management of the firm, what services or products it offers and to which client; the latter the process of communicating the benefits of the services offered to the target market through advertising, websites and so on.

‘Firms must understand this difference so that marketing resources can be focused on a return on investment – of time and funds – that enable promotions to bring in the right type and amount of work,’ he says.

Reducing promotional spend is reasonable in the current climate, Moyes says. But those resources should be transferred to other marketing activities, like fee-earners writing to former satisfied clients to remind them of the range of services the firm offers.

Past clients, he says, are the best market segment for promoting legal services. ‘Your past clients know your firm,’ he adds. ‘If you tell them about the services you offer they will be able to instruct you if they have a need.’

A firm, Moyes says, should examine its database and ensure client details are correct.

‘Consider how the firm’s website, brochures and newsletters promote the firm and make sure all materials include a benefit to the client of using your firm’s services,’ he says. ‘Saying your firm has "experienced professionals" doesn’t help a client until you add a benefit such as "so we can help you more quickly solve your problem" or "will protect you from future legal risks". Fit your legal experience to the needs of your clients.’

Robin Dicks, director at marketing firm The Thriving Company, says good marketing can make a huge difference to a firm’s turnover, profitability and cashflow. A recent best practice customer relationship management (CRM) study across marketers and managing partners of professional services firms showed that around 80% achieved increased revenue and profitability from CRM activities.

‘Getting feedback from clients and using it effectively is also critical,’ says Dicks. ‘Recently, through client research, one major regional firm identified that 25% of its revenue was at risk from being dropped from panels. The firm managed to retain the clients and revenue through an effective response.’

If a firm does not know its clients and their future needs, it won’t be in business for long, says Moyes. CRM – a tool for capturing client information and using it to anticipate their future legal service needs – is essential to do this.

He says: ‘CRM helps identify target client groups and analyses service or matter types so the right services can be offered. At its most basic, it’s the firm’s client database on the current IT system and how the firm plans to use it. CRM, in its more developed form, is also there to make the promotional elements more efficient.’

Moyes at Marketlaw uses a system he calls the ‘One minute marketing solution’, which can work very effectively for law firms.

‘When a fee-earner comes to close a matter, they need to ask two questions: are all the contact details of this client correct on our database? What does this client need from legal or professional services next? Then, most importantly, they must record the answers in a usable form in the IT system.’

External and large-scale competitors already have highly developed CRM systems poised to develop this market and solicitors must be careful not to be left behind. ‘Most solicitors don’t use their IT systems properly,’ Moyes adds. ‘They are not able to compete against the combined power of Saga and the AA.’

The best ways a law firm can market itself and set itself apart from its competitors, says Dicks, is by actually being different, because ‘there’s no point communicating to your market that you’re different if you’re not’.

By deciding what sort of clients a firm wants – by size, niche, issue and so on – and focusing on these, it can determine what is really of value. ‘Get robust research and listen carefully to what key clients and prospects want,’ he says. ‘Few firms do this really well – so you can unlock new ideas about what you can do differently and ways to gain more quality business. Use this in your marketing communications but also consider what will be distinct and unique.’

A ‘client development centre’ such as that run by City firm Addleshaw Goddard – where members of the firm join together with in-house legal departments – is a good example of innovative thinking, says Dicks. ‘This isn’t just about learning together, it provides added value and locks in relationships by delivering something extra.’

Moyes says that if a law firm requiring a marketing plan does not have in-house marketing expertise, it should buy some in. ‘Don’t try to do it yourself, you’ll run out of knowledge and ideas too quickly and probably waste money and time in the process,’ he says.

Solicitors should remember, he adds, that the marketing team is there to help them achieve their departmental aims, not to do it for them.

‘What they can do is assist with the administration and innovation of service and target markets, develop promotional materials and implement the non-legal side of the firm’s marketing strategy,’ he says. ‘A marketing team is there to support the solicitors in efforts to achieve excellence in legal services, whether in brochures, website, pitches or contracts. The solicitor must remain at the heart of the marketing process.’

Dicks says that there are basic steps firms should take to achieve the goal of identifying what business they want and where they can compete. For example, firms should create account plans – ideally done with the client – and extend their relationships with key clients so they are best placed to win the quality business available.

‘Identify those intermediaries and referrers where you could obtain a better share of introductions and manage these relationships in the same way as key clients – few firms do this, but it pays real dividends,’ he says.

Firms should also review their performance at pitches and tenders, gain feedback and compare with competitors so they can determine how to win a greater share of proposals. ‘As in other cases, this is more about getting better results for your money than spending more,’ he adds.

Although Moyes concedes that in some sectors firms can buy in work, join panels and sign up to referral schemes and websites, what look like cheap and simple ways for firms to get more and better business will generally already have the profit taken out or will have strings attached. ‘If it’s that simple then everyone would be doing it or have done it already,’ he says.

���Recommendation is still the most common referral method, so make sure your firm’s past clients know the benefits of your services – they are then more likely to recommend you when asked.’

The word-of-mouth factor is something some have grasped and applied to the internet. Disgruntled clients who feel let down by their lawyers are invited to anonymously vent their fury with postings online – which they have done, very explicitly in many cases.

Less venomous solicitor comparison websites are also available, such as solicitor.info, which compares solicitors in terms of ratings left by clients.

Solicitor.info founder David Sprake says: ‘It is like being recommended by word of mouth over the internet. Word of mouth is the one of the oldest and most effective ways of marketing. It has been a powerful advertising tool for services, including legal, for centuries.’

Since its launch six months ago, more than 550 law firms have listed on the site, which aims to help clients find good solicitors and vice versa, says Sprake. ‘While this may mean some legal firms are highlighted as providing a less-than-satisfactory service, this is not the primary intention of the site.’

What sets his site apart from others, he says, is that client ratings determine who comes top of any search, not who has the lowest cost. Also, because the site is free, fees do not drive ratings.

He may need to review his free-for-all review policy in future, though – at least one firm had a five-star listing based on one review and that review turned out to be written by a partner in the firm.

There are, of course, a number of enquiry broker websites springing up, which Moyes says are being sold aggressively as a ‘marketing’ solution to solicitors.

‘In the current economic climate many firms are signing up,’ he says. ‘The quality of the enquiries is the key factor and cost may not justify the expense.’

But Moyes predicts that growth of legal comparison sites will increase because businesses see this as a way to make money out of solicitors. ‘The web provides an easy medium for setting up these types of website, but because of the low barriers to entry in the comparison website arena none will dominate and most will be useless.’

He adds that since the general public rarely understand the legal services they need, comparing one firm to another is not helpful.

Another take on the legal comparison website is the likes of bidlegal.co.uk, where would-be clients type in their legal requirements which are then forwarded to registered law firms, which can then bid for the work. Clients choose the bid they fancy before being put in touch with the winning firm.

The site – which charges firms registration fees from £100 (plus VAT), plus an annual fee once the first client is landed – says punters will get the best quote from ‘hundreds of UK lawyers’, although Bidlegal director Jo Summers refuses to say how many firms are actually registered, but she says an increasing number of clients are turning to the internet to source their legal advice – and law firms ignore this trend at their peril.

‘Legal comparison sites offer firms access to clients they might never otherwise meet, without having to spend thousands on direct marketing,’ she says.

And now the big players are involved – Moneysupermarket launched a legal leads service in September 2008, and launched the personal injury side of that service last month.

Forking out for a comparison website entry should not be the total of a law firm’s marketing effort, though, warns Sprake. It should instead be viewed as part of a range of marketing and advertising initiatives, both physical and internet-based.

‘As well as traditional marketing, law firms can also develop their own sites using pay-per-click advertising, search engine optimisation or even spam-free email marketing,’ he adds. ‘Firms such as Clicks (clicksseo.com) give free internet marketing advice and monitoring.’

As to the future, many see social networking sites such as Facebook as an increasingly important marketing tool, with books and countless articles written on the subject.

However, Moyes advises that Linkedin is a better option for business at present, because Facebook/bebo and the rest are more social and very international.

‘It will become an important part of a solicitor’s public profile though,’ he says. ‘I’m looking at developing this with a client at the moment.’

Lawyers being selected for their personalities? Now there’s food for thought.

Lucy Trevelyan is a freelance journalist