Embracing the customer and technology to survive and thrive

8th August 2012

Law firms have often been accused of not being outward enough when it comes to understanding the market. This is unfair shorthand for an industry that is loosening the shackles of past attitudes. I have met many practices, large and small that have clearly defined commercial plans, built on growing their markets, acquiring synergeous businesses and establishing partnerships to face the changes taking shape across the industry.

But there are clearly many yet to respond to evolution taking place around them. Evolution is creeping, it isn’t noticed day to day. The stuff that visionaries talk about that seems outlandish today could be tomorrow’s norm. While legal services don’t move as fast as Smart Phone technology, law firms need to safeguard their futures by marketing effectively to their client bases, while seeking added value through new alliances.

The trouble with marketing is that it’s a variable cost and difficult to charge on. The practice manager can often be the responsible person for website and content, communicating periodically to a list from a spreadsheet. Ok, this might be a bit harsh, but it is clear that customer engagement could go further.

There remains a tendency to rely on local brand and that high street location with the gold plaque in order to drive future fee income. Word of mouth recommendation is still extremely powerful and there is huge trust placed in the “privileged information relationship”. However, in a world of access to choice, 24/7 information and apps, will a newer generation care much about tradition and operate in the only way they know how? The answer is inevitably no and the market has to evolve to meet this.

Big brands with large cross-sellable databases, incentives and large marketing budgets are looking to muscle into the space – insurance companies, banks, finance houses and, of course, the Co-op and Eddie Stobart.

Alternative Business Structures (ABS) are likely to change the landscape in the areas most commoditised, like personal injury claims, conveyancing and wills. Brands are putting together portfolios of services that can stack well vertically – litigation and personal injury insurance brokers; estate agency groups and conveyancing; funeral services, probate and will writing, for example.

They will be driven by smart technology that promotes access, simplicity in offer and message, robust and scaled customer service, backed by high quality advice. The traditional law firm will always hang onto the last of those, but it’s not the be all and end all to the tech savvy client.

Do law firms really understand what their clients want? Do they know what their prospects want? Are they different? How do they differentiate to win them? Do they know where to find them and how to reach them? Classic marketing questions, but do they have the in-house capability compared to other big brands?

Law firms must increasingly learn to engage with analysis and an understanding of their commercial potential, both to them and future business partners. Data isn’t about a curated and aged spreadsheet, it’s about understanding how accurate and valuable the client base is, who is accessing what service when and if not why not, and what can be done to stimulate demand.

Marketing in law firms must be inextricably linked to the process and the technology adopted. I believe that a great convergence of Customer Management Systems (CMS) and case management is at the heart of this – adopting a customer oriented contact strategy rather than just an internal workflow mentality.

Consumers respond positively to personalisation and being kept informed through stages of a process or engagement. All too often, professional services lose sight of the fact that it isn’t just the qualifications they have that people are buying. They are buying brand reputation and engagement. You can be assured that a national brand will focus very heavily on this to step over and reach clients of the local law firm.

Whatever conveyancers thought of HIPs, it taught them lessons about embracing technology to be leaner and deliver greater efficiency to make margins in an ever commoditised world. It also highlighted whether you are in or out of the tent when it comes to panels. ABS can only accelerate this. It is vital that law firms leverage their brand reputations, so carefully won over the years, with leading edge thinking, technology connectivity and sources of business referral. It isn’t just a nice website with lots of template-based content that will draw customers to you.

The law firm brand must of course speak of trust, compliance and quality service, but it needs to be outward and accessible. Price will always be the hardest to compete on as the scale economies just aren’t there compared to national brands – so they must differentiate.

The market will be hard enough for the typical practice over the next 12-18 months, with conveyancing volumes struggling to reach half their 2007/8 peak, PI costs and demographic factors affecting many high street firms viability. By adopting a customer-centric, open attitude to technology and commercial partnerships, those with the appetite to compete with the big boys should carve out profitable futures.

David Kempster is the Owner and Managing Director of Clear Edge Communications, a marketing strategy, brand and communications consultancy. With an extensive background in legal, property and technology marketing, he offers project and retainer based services for professional services firms. For more information, visit www.clearedgecomms.co.uk, email david@clearedgecomms.co.uk or call 01732 750577

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