Force of the impending legal bill

The Legal Services Bill comes into force at the end of this year and has potential wide range implications for the sector. The Bill will allow non legal organisations to offer legal services, meaning that potentially, the sector will be open to more competition from possibly the likes of insurance companies and major retailers. Firms cannot ignore the issue that this change will have impact on the dynamics and structure of the market. Some industry commentators and press are suggesting that there will be consolidation through mergers and takeovers of law firms to strengthen themselves, so as to respond to the actions of new market entrants and ‘protect’ their client base.

Firms therefore need to look closely at their current business and ask the following questions:

Which services would we likely see new market entrants targeting?

How will this affect our business with regards to services offered, existing clients and business development?

Should we focus on specific service offerings and withdraw from others?

How do we currently differentiate ourselves from existing competition?

How should we differentiate ourselves from new market entrants?

Why do clients choose our firm, what do they value and do we really understand this?

What are our strengths and weaknesses?

How will the above affect our marketing with respect to client communication/care/new business development and most of all, our existing client base?

These are not easy questions to answer, because they are strategic and go to the very heart of why the firm exists today and where it is going in the future.

From a differentiation view, if not already doing so, legal firms will need to look at the ‘client experience’ of doing business with the firm. Because as with all marketing, business starts and ends with the customer. Understanding why the client chooses the firm over others and what ‘value’ they place on the activities of and dealing with the firm and why they keep coming back or refer you, are paramount in understanding how and why to differentiate over the competition and also how to position the firm in the client and markets mind.

Service based products are typically classed as intangible and inseparable. In other words, the client cannot actually experience the service until they are physically consuming it. Furthermore, a client’s judgement of your service quality will not be formed based solely on engaging with one person in the firm; rather, it will be based on their experience with the firm as a whole, particularly with respect to your firm’s skills, capability, competence and delivery during the service encounter.

So, the crucial issue becomes one of how firms communicate the client experience to those that have never experienced the service before. This may be particularly difficult for small or medium sized law firms who do not have the strong, immediately recognisable brand values and marketing budgets commanded by national firms nor by potential new market entrants.

The possible implication from the Legal Services Bill is that there is likely to be increased activity in the sector from marketing agencies offering re branding, new PR and advertising campaigns and a plethora of activities to address the ‘perceived’ tactical issues the legal sector will face. However, this should be viewed as merely ‘window dressing’; there needs to be careful consideration of how the market changes will affect the firm before any tactical actions are put into place – put simply, firms will need to take a strategic look at the market and their business before committing resources particularly valuable partner, management, and marketing time and, most of all, cash.

So where do you start?

In developing strategy, do nothing is an option you could consider; you can remain as you are and where you are, the problem is it leaves you wide open to competitor activity and changes in the market, so in reality it’s not an option or path to be recommended. The first place to start with is the market. You don’t need to spend vast amounts of time or money on market research or internal workshops, or strategic advisors, nor do we want analysis paralysis. Keep it simple is the best tried and tested approach, consider doing the following:

Talk to other contacts/trade sources, look at the press and published articles, market research reports from Mintel or Keynote – gather views/opinions and where possible facts/figures as to what is happening in your market or the key trends as to what might happen in your market in the short, medium and long term.

Commission research amongst a cross section of your clients. Don’t use a postal questionnaire as it won’t be completed or returned. Research in a service based market is personal, so make it personal. Research should be undertaken by the partners at the end of each matter to find out how we performed and what could be done better. Sometimes there is a reluctance to ask this question of a client, but even if it is difficult, it needs to be done. Use an independent company to approach clients on your behalf say on an annual basis to find out your key strengths and weaknesses, what you are good at, what you could do better, what comes to mind when they think of your firm and its name. This is best done by a covering letter asking for their help and then a phone call. Independent means it’s unbiased and given the conservative nature of British people, experience shows they will tell a third party their views and opinions when they might not tell a firm directly.

Analyse what the current competition is doing – how do they compare, what are they doing differently, are they growing or declining, how could or should this affect your competitive position?

Bring the information together in a SWOT analysis – Strengths and Weaknesses are internal, Opportunities and Threats are external to the company. An easy way to remember this is a strength helps you win and keep clients, a weaknesses is what will lose them. Strengths and weaknesses have to be viewed from the client’s perspective, not what the firm ‘thinks’ it’s good at.

Rank the opportunities in priority order and then screen them – which ones are practical and possible?

Assess the weaknesses, what action needs to be put into place to address and correct them?

Then and only then are you in a position to produce marketing plan. The marketing plan will clearly articulate the market that you will address, the service offerings you will make, the positioning statement you will make (in other words your brand and the values it will convey to the market), your philosophy of doing business with the client and what promotional activities will be used as part of the plan to reach and communicate with the market.

As with all plans, execution is the most important thing as is ownership – it has to be owned in order to make it happen. Too many plans fall by the wayside becoming a means in them selves rather than a means to an end.

Opening Doors is a Cheshire based marketing company with key strengths in marketing consultancy and design.

The company offers the ability for an independent external view of the firm, its market and the views and opinions of its clients. This then becomes the development of marketing strategy and your marketing plan.

Les Wilcock is Managing Director of Opening Doors.
With over 20 years experience in industry in marketing roles, 7 years at KPMG Management Consulting as Prinicipal Consultant in Marketing Consultancy, he has a rare ability to view marketing from a strategic position as well as tactically what works best. He has worked extensively in the professional services sector assisting clients such as Pinsent, Eversheds, Wragge & Co, Grimley JR Eve, and Booth Ainsworth.