Innovation appears to be ‘anathema’ to solicitors, who place too much reliance on the value of their reputation and are overly wedded to ‘old school’ marketing techniques, according to a report published today.
The ‘white paper’ compiled by business advisory group Selling for Solicitors also found that lawyers tend to be overoptimistic about their firm’s position.
The research, which was based on a national survey of 105 firms of all sizes, suggested that many firms overestimate the importance of their own reputation, compared to that of their competitors. When asked why clients bought services from their firm, the survey results showed that solicitors tended to consider their reputation as ‘twice’ as important as the price of their services. However, in relation to competitors, firms saw price as ‘equally’ important as reputation.
The white paper suggested this ‘possible misperception’ and reliance on reputation ‘could be the undoing of many firms in the years to come’.
The research found that firms currently rely on client referrals, third party introducers and networking as their main sources of work. Although electronic marketing was considered ‘relatively successful’ by firms, only half of respondents actually used it.
The report said: ‘This reliance on old school methods (some of self-confessed dubious efficacy) and cold shoulder to increasingly prevalent internet-based tactics leaves firms vulnerable. It also represents a big opportunity for any firms that choose to focus expertise, investment and energy on customers online, or develop new routes to market.’
More than two-thirds of firms said they had come under strong or moderate pricing pressure from clients, but they had largely resisted this, with 66% reporting that they had not changed their prices in the past year, the research found. It noted that there was ‘resistance’ to offering pricing models other than the hourly rate.
The report also suggested that there was ‘inordinate optimism’ in the profession, with five times as many solicitors thinking that their recovery rates had gone up as those who thought they had declined. However, the paper noted that ‘all the anecdotal and much of the financial evidence does not yet bear witness to the legal sector having turned a corner’.
The report said law firms were looking to ‘an increase in high-value work’ to achieve growth, rather than seeking to offer new services. It said: ‘Innovation seems anathema to solicitors and it is not obvious where growth in an ever-competitive market is going to come from’.