Telephone marketing can be very effective – but only if the service offered isn’t too superficial.
Last week the Gazette reported losses at Co-Operative Legal Services.
The firm’s half-year results showed that it had posted a £3.4m loss in the first half of 2013, compared with a £700,000 profit for the same period in 2012.
CLS blamed this on the ‘start-up nature’ of the business, and it has certainly spent a lot on TV advertising and marketing costs as it seeks to promote its brand to consumers. Of course, the loss revealed last week doesn’t necessarily mean that the business will not become profitable soon enough. But the fact that a loss has been announced may be uncomfortable news for the government. After all, one of the main drivers behind the introduction of alternative business structures was the theory that consumers will then be able to benefit from the entrance of big consumer brands offering legal services at a lower price. If big players such as CLS don’t ultimately manage to make the sums work, that would call into question the reason for all this reform.
The CLS results statement pointed out that probate profits had ‘exceeded expectations’, and that is one area where solicitors are particularly concerned about the competition, because of the natural fit with the Co-operative’s funeral service. There are often comments on the Gazette site suggesting that CLS ‘cold calls’ probate clients.
I recently had my own (very brief) encounter with the Co-op’s legal division, after having arranged a family funeral. As we had used the Co-op’s funeral service, we were offered a half-hour’s telephone legal advice as part of the package. That is certainly a means of letting the customer know that they can also purchase legal services from the Co-op, but I didn’t feel there was anything unethical about that, and I wouldn’t describe it as cold calling. During the conversation with the Co-op’s telephone legal adviser, I didn’t feel that I was being pushed towards using the Co-op for the probate work.
But the telephone advice was interesting from another perspective. I spoke to a young man who was very friendly, polite and ‘accessible’. But our situation was outside the usual circumstances (more on that another time), and indeed I already knew that at some point we would have to find a specialist contested probate solicitor. The Co-op adviser was out of his depth, and acknowledged as much, but nonetheless he gave me quite a positive assessment of my situation. That assessment later turned out to be very different from the advice we received from the qualified specialist solicitor in private practice, whom we ultimately instructed.
It is all very well to be friendly and accessible, but when the service offered is too superficial, sometimes the client is better off without it.
Rachel Rothwell is editor of Litigation Funding magazine