Major brands are preparing to enter the legal services market in competition with law firms, and have huge resources at their disposal. Alastair Moyes explains how to beat them at their own game

In a relatively short time, several large national brand organisations will begin to spend millions of pounds on promotions to sell legal services in competition with the majority of solicitors' firms.


Their aim is to capitalise on their established brands and their huge databases of customer information. These companies are marketing-led to their core, allowing them to pick and choose the most profitable work for the legal organisation they set up once the Legal Services Act comes into force. Their communications will seamlessly present easy opportunities for their clients to use their legal services, stressing the benefits over and over again.


These 'big brands' will have two main effects: on customer communications, and on the price of legal services.


They are likely to start with conveyancing, will-writing and personal injury (PI) work. Customers can be fickle, and tend to buy their services based on limited information, immediate requirements, and recommendations from friends, colleagues or other professionals.


When new companies enter a market, the increase in supply drives down the price. The price for conveyancing and will-writing is already low, and the costs and complexity of attracting PI work are increasing.


For many solicitors' firms, this will affect the profitable work that underpins their businesses. They therefore need to plan their response now, while they have a head start.


Commercial-only practices may, at this point, be feeling rather smug that they no longer deal with 'Joe Public' for the work. This would be short-sighted, as the easy solution for many firms would be to switch their attention to gaining more commercial work while dropping domestic departments.


This brings us back to a basic economic principle, which indicates that price and profitability will be forced down when competition and supply increase. So how does a general practice or specialist firm compete against nationally known, trusted brands as they bulldoze their way into a new market area, spending millions on promotions?


There is one underlying principle worth considering at this point that might bring some relief. This is that the big brands have no more methods of promotion or routes to market than any other organisation. They have no tricks, secrets or special powers that mean they can win business over rivals. What they do have is an understanding of their customers through their databases, access to finance, and the people to organise ceaseless promotions.


However, there are advantages that local, established law firms have that the big brands cannot afford to replicate. These include having an established business with a history of satisfied customers, local offices staffed by highly-trained professionals, and support staff with a trusted brand that is known in their town or county. The task of meeting the big brands is a matter of developing marketing knowledge and applying that to the existing business. No revolution is required, just the application of commercial marketing and management techniques.


Of the highest priority is developing and managing the database of past, current, and potential clients alongside a database of professional contacts. Firms already have the required technology in their case and practice management systems, though some effort is needed to re-organise these existing databases into a useful system from which regular and, most importantly, relevant promotions can be sent.


Fighting for your corner of the market is a matter of integrating new ideas into the way a firm is run. Marketing management cannot be tacked on to a firm. Once a database is set up, it must be maintained by partners, fee-earners, and support staff so that it is part of their working process and not a burdensome task that distracts them from fee-earning.


The costs of getting the database working should be seen as an investment. As firms consider multi-disciplinary practices and alternative business structures, their value to others as a business will depend on their ability to attract future business in a more competitive market.


This means that a firm's database becomes a significant asset. As that client knowledge grows in the database, the ability to offer more relevant services increases, thus allowing pro-active management of the relationship with a client and the ability to focus on the profitable work the firm is seeking.


This is all fine in theory, but it often falls apart at the implementation stage, where firms either run out of ideas, time or the resources to carry these developments through to a profitable conclusion. The solution is also familiar, as hindsight usually indicates that if a project had been better planned, financed and co-ordinated, it would have had a better chance of succeeding.


Other business organisations of similar sizes to high street firms see the value of having marketing managers to co-ordinate initiatives, plan, and report on profitability.


For firms to compete against the big brands, marketing management must be included in business planning. Options vary, from the long-term commitment and expense of employing a professional to the use of consultants and outsourced services. All of these can deliver the required knowledge. However, the key is the partners' commitment and understanding of the necessity of the investment. Marketing is about understanding the business of legal services and the requirements of the future customers it can serve.


The likes of the AA and the Co-op may not immediately appear to threaten established firms that have always survived on local loyalty and have more than enough work already. But it is a sure economic fact that firms of all sizes will be affected by the increase in competition as the market accommodates new entrants.


A key element to securing future business success, or even survival, is taking marketing management to the heart of your firm.


Alastair Moyes is a director of Marketlaw