Do Law Firms need to Market Themselves Differently?
Written by Ian Hunter, Business Director
Fish where the fish are: Do law firms need to market themselves differently?
Law firms are having to work much harder to stand out – not only in the eyes of consumers, but also when it comes to attracting and retaining talent. After years of stagnation, acquisitions and mergers are back on the cards, as firms look to expand their portfolio of service. Consumers are shopping for legal services differently – they expect more, and much of the responsibility for addressing this lies at the doors of marketers.
But why are these challenges coming to light in the first place? The legal services market has seen significant change over the last ten years, affected by changes in the economic situation of the B2B and B2C Client base and changes in the legislative landscape. Since 2014, the market has contracted. But in 2018 we have seen some areas of growth.
What does the contraction of the legal market means?
Whilst the legal market has contracted overall, there has been significant growth from London law firms outside the top 100 and large regionals whose mainstay of legal work across private Client and commercial work has continued to grow. Firms turning over £10-20m have seen an average of 9% growth in turnover this year. Individuals and businesses of all sizes, C-suite professionals, entrepreneurs and in-house legal teams, still want great legal advice, but they are shopping around to find the services they need, sometime from more than one provider. The result has seen a number of law firms look at alternative ways of driving revenue. Cost is a key factor behind the strategic approach of a number of law firms. With the request for ever growing transparency in how the sector charges, fixed fees are becoming standard. There are still a number of specialist boutique and magic circle firms who will avoid going down this route – for now – but for all who operate in the more consumable legal services, it’s becoming unavoidable.
Law firm structures – how varying this can help pave the way to success
The structures of law firms have been a topic of discussion for a while now, and a number of years ago we saw the arrival of Alternative Business Structures (ABS) (2007). The vast majority of law firms continue to work under the traditional model, but those who have changed their mindset and adopted a different way of investing, structuring and managing their business, are seeing the results. National firm Irwin Mitchell (21) and Magic Circle multinational DLA Piper (1) are amongst the biggest names to adopt an alternative structure and have been very public about the success this has brought them.
Whilst there are progressive law firms out there operating under the traditional partnership model, I can’t see the downside of adopting a working model that allows a law firm the freedom to run like a sole trader, limited company, LLP or corporate, and by so doing, adopt a far more commercial minded mentality. It can only pave the way to better business ideas, ways of delivering legal services, and marketing them.
Outside the magic circle, law firms who keep with the traditional model will likely find themselves being overtaken by far more dynamic and success-led ways of investing and working. Nowadays, successful firms are those that flip the status quo of equity partner first, before firm and Client. It should be all about the Client, like the model for every other market.
What is influencing the changes in law firms?
The market is extremely competitive and law firms need to step up to the challenge in order to make an impact. As a result, it’s important for marketers to explore how this can be done. Technology is starting to play a major part in this, as law firms look to analyse the way they work, streamline process, reduce fees, change the way they charge and deliver a more accessible service to the consumer.
The legal profession is inheriting the impact of the changes adopted by B2C consumer brands to create better ways their Clients can experience their brands, products and services. This is particularly true for Millennials. Driven by demand, firms and new entrants are exploring Blockchain AI, and online commoditised legal service solutions.
I don’t believe there is any doubt that technology will become an integral part of the operating infrastructure and service gateway for legal services. Especially for higher volume, lower value legal services. The early adopters have embraced these as part of their business models; however, the use of this technology is still some way off providing a valued alternative to the traditional face-to-face service for the majority of business or private Client legal services.
Law firms should never lose sight of this. A brand is an experience, and experiences make up your brand. Whilst technology is no doubt helpful in streamlining and speeding up the process, it should focus on being utilised where relevant, and only to improve the Client experience. For example, services that need the personal touch, or when empathy or a listening ear is called for, technology can be a million miles off replicating how valuable sitting in front of someone is.
Looking to the future
Whether you’re a magic circle, top 100 or regional law firm, the competition remains fierce. Enterprise level companies, and larger SMEs have been forced through financial restraints, to look at saving money by using smaller firms. Big panel contracts are being reduced and broken up, meaning law firms are having to wake up to a new way of working.
Individuals are also changing the way they buy legal services. In the past law firms could rely on 80%+ of their revenue coming in from repeat business; but now in a world of over 30 billion connected devices, legal consumers are very comfortable shopping around, especially if they don’t feel they are getting true value for the legal services they’ve purchased in the past. The challenge that faces marketeers is how to stand out from the crowd on multiple fronts. It’s about getting smart. Building a brand story that is unique, relevant and compelling to Clients, prospects and new talent, and bringing it alive at every stage of their journey. A story that is less about the legal service, and more about the benefits of working with the law firm and one that addresses their wants, needs and fears.
Whilst functional requirements like price and delivery must be met, addressing a Client’s emotional concerns will bring your audience closer to your legal brand. Make them less anxious and in turn more confident. You’ll then be seen as a partner, and an ally in their legal struggle.
Find out how we can provide your firm with the best of both worlds, contact firstname.lastname@example.org for more information.