Your clients are under pressure. They’re facing increasing complexity and organisational transformation; cross-border competition; greater risk and regulatory scrutiny. Their in-house legal functions are feeling the pinch on costs. That pressure is being passed on to you.

If you’re a UK law firm, you’re almost certainly facing your own pressures, and on several different fronts. The US law firms are very clear about challenging the UK establishment. Read the headlines: their recent spate of expensive hires will soon be eating someone else’s lunch – possibly yours. The accountants are also on the move – their legal practices are now winning substantive panel appointments. Add in technological disruption, and the entire law firm business model is being stress tested like never before. It’s perhaps not surprising that the leader of a well-run, successful, firm recently made this eloquent observation: “managing partners see the ‘bogeyman’ everywhere”. They have every reason to.

The only viable response to these challenges is for law firms to transform themselves, and to focus on their core strengths. Marketing and BD functions are not immune from the need for change.

Margins will be squeezed again. Organic growth might have topped out

 

Recently, firms have got to grips with clients demanding ‘more for less’, recognising that there can sometimes be a silver lining in this request. In order to leverage the value of their external legal spend, clients tend to send more work to fewer firms. Albeit with squeezed margins, firms who survive a ‘more for less’ panel review can often see their revenues rise, sometimes by double digits.

The next evolution will not be so kind to external legal advisors. In future, more for less demands will not sweetened with the offer of more work at lower rates. Instead, they’ll just be less work at lower rates. This is because the legal value chain is being disrupted. The value of legal advice, how it is delivered, and how it is charged for, is changing.

Corporates continue to build their own in-house legal teams. Many are now quite capable of handling day-to-day transactional work – the sweet spot of external instructions for law firms. Meanwhile, process and technology improvements are not just bottom slicing away law firms’ commodity work, the Big Four accountants are also using these techniques to bite into large swathes of mid-tier work, such as due diligence, tax, compliance and employment law. At the same time, technology newcomers, such as Kira Systems and Luminance, are offering the same volume / efficiency proposition, while also offering businesses the chance to save vast amounts of time and money – often, your firm’s time and your firm’s money.

How will your practice respond to these competitive pressures? No one knows what the legal services market will look like in the future, but it’s time to start thinking about how to react to the changes that are already taking place. Firms need to take inspiration from the likes of Uber or Airbnb – companies that have harnessed technology to deliver a long-standing client proposition in a radically different way.

While law firm leaders need to examine the totality of their business model, heads of marketing and BD should also be challenged about their functions. What value do they add, both for the firm and the firm’s clients?

Get personal with your marketing

 

Surveys tell us that the top-rated service provider selection criteria is “understand my unique business needs”, and that 48% of clients are more likely to consider ‘providers’ that personalise their marketing efforts. So why is it that clients often say that they struggle to identify any real difference between similar firms? What is going wrong with your marketing efforts if your target clients can’t tell you apart from your competitors?

Your firm’s marketing and BD department should be doing more to lead the practice to market: anticipating – even creating – demand, and encouraging engagement between buyer and seller. But, in order to demonstrate that your firm understands your targets’ business needs, your marketing must be highly tailored and highly personalised. Unfortunately, this is not what is currently happening: too many firms believe that bigger, better marketing campaigns should focus on producing more global thought leadership. But global thought leadership is often unusable at an account level – so why continue to invest in it?

Producing tailored marketing is one thing, but it’s important to understand if it’s passing the “so what?” test?. The ability to track engagement must be part of your armoury. Is it interesting, does it address clients’ issues? What are they saying about it? Marketing departments should ensure they understand what these insights tell them, and unleash this data to create a plan of action. Many do not.

Get to know your clients – properly

 

Tailored marketing can help build engagement and partners want more of these opportunities to meet clients and targets in person. To help them prepare, partners want their marketing and BD teams to uncover insights that they can discuss. These insights should allow partners to demonstrate a better understanding of the business and the legal solutions, which helps create an avenue for new instructions. Partners want ‘buyer profiles’ and ‘buyer programmes’; guidance on where the potential client is going – and why. But all too often, this isn’t what they’re getting. Why not?

Marketers need also to take a long hard look at how their firm engages with its existing clients. It’s clear that account programmes are running out of steam, with both clients and partners struggling to identify what value they offer. Account programmes devised by individuals with no client facing experience often struggle for legitimacy: they are typically far too process driven, and cannot usefully respond to the complexities of clients’ buying behaviours.

Many law firms would also benefit from improved client feedback and insights. However, it’s important to do the numbers – the opportunity cost of getting partners involved in this process will never make economic sense. Not only do partners not have the time, many also don’t have the necessary skills to gain that insight.

Engaging in a compelling client conversation is an art form. It’s not about conducting quantitative research, which rarely uncover what clients need, going forward. Quantitative research, on which many BDs’ action plans are based, is typically worthless. All too often it’s reactive rather than proactive, and delivers nothing more than confirmation bias. Rather than following this approach, the firm’s conversations with its clients should help inform the practice’s strategy towards them.

There’s no reason why BD should not take a lead in seeking out such insights directly from clients – in a well-run firm, everyone should have a hand in sales. But BDs should always have a reason for the meeting: clients do not appreciate anyone wasting their time with ‘fishing trips’. Whoever from the firm undertakes the client meeting, the meeting itself should be well planned and have a clear focus.

And that latest point is the common theme which runs throughout this article: many marketing and BD teams need to dramatically improve their focus. They need to focus better on understanding how, what, and why, clients buy. In itself, this is a differentiator from the ever-increasing number of competitors. Marketing needs to be more targeted, and the insights it yields more closely scrutinised and used in client plans – no more useless global thought leadership. Engagement with clients should also be improved. There should be far less focus on process-driven client account programmes, and insight-free feedback initiatives. Every client sees their challenges as unique – better understand those. Concentrate efforts on where and how to deliver a commercial result, and communicate to clients what the firm can deliver.

Only by cutting out the flab can marketing and BD functions ensure they add genuine value in a market where there is simply less work available than before.

Click here to view the PDF of this article, as published in PSMG magazine.

Gordon Brown is a management consultant who helps firms develop their strategies, plans, programmes and conversations for their ‘bet the ranch” clients. Gordon has more than 20 years’ experience in the professional service sector and was previously BD and marketing director for PwC, in both in the UK and the Middle East. He can be contacted at [email protected] 

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