Widening your horizons

Most lawyers think about marketing in terms of the highly visible branding, promotional and communication aspects, but strategic marketing spans: research into emerging needs and diligent positioning within particularly profitable segments or niches; focus on the convenience of alternative distribution methods; creative use of market intelligence or client feedback to develop innovative new solutions and create new services; unusual and attractive forms of pricing and payment '“ whether simple fixed prices, manageable monthly retainers or long term cost recovery/repayment schemes with integrated financing or insurance.

Market strategies: segmentation and positioning

It is still unusual for firms to take the analytical approach to assessing the size of the market and their share within it that is common practice for big commercial operators. How many probate solicitors could tell that there were 502,599 deaths in England and Wales in 2006, which was the lowest level since 1954, and that there were 229,215 grants of representation granted (71 per cent by solicitors)? And could they tell you about the breakdown of this work in their locality? And how many family lawyers know that there were 132,562 divorces in 2006: a 6.5 per cent fall on the previous year, and at its lowest level since 1984. Meanwhile, there were 1.86m flats, houses and commercial properties sold in 2006/07 '“ the greatest number since 1988 (just before the housing crash). This could explain why our property departments are cynical of any likely decline in the market.

Increasingly firms are investing in market intelligence and research that enables them to gain a more accurate view of the overall market and in their locality. It has cost time and money for some firms to adopt the sort of segmentation, targeting and positioning strategies you see in commercial organisations. Historically law firm systems, and the lawyers who entered data into those systems, failed to record important details such as the source of the work and critical details such as demographic and lifestyle data that would allow detailed client profiling.

Jeremy Passmore, partner and head of the 19-lawyer private client team at Thomson Snell & Passmore in Kent said: 'Before you develop a marketing strategy, you must have a clear view of where your work comes from at present. To capture the information we diverted all new client forms through our marketing team and it took around two years before we had an accurate picture of what was happening. Our analysis '“ which confirmed our suspicions '“ showed that 74 per cent of our work came from existing clients. Of the 26 per cent of work from new clients 36 per cent was from professional referrals (quite a significant amount from firms in London); 25 per cent existing client referrals and 21 per cent from partners and staff. The balance was from the website, our seminars and our newsletters.'

Unlike the consumer giants, most law firm systems make it impossible to look at the profitability of particular clients and client groups. Yet this ability to identify particularly profitable groups of clients '“ or niche markets '“ and to devise cost effective marketing programmes that reach them with services and messages tailored to their particular needs is what underpins great marketing '“ and not just those with significant marketing resources. Yet many solicitors have a 'feel' for what part of the market they are targeting.

'Conveyancing is seen as a commodity product at the lower end of the market and is becoming more price sensitive,' explains Emma Moore, a residential property conveyancer at 23-partner Barlow Robbins in Guildford, Surrey. 'We have always looked to provide a top class service to the whole market with an emphasis on a more specialist service to the upper end of the market.'

Nick Fagg, partner at 14-partner Rix & Kay in East Sussex commented: 'Managing the residential conveyancing department is a moveable feast '“ you have to shape and change things quickly as events unfold. The rapid change has forced us to make up our minds which end of the market we want to be in. The bottom end of the market is not where we want to be '“ it is so price sensitive '“ like a bear pit.'

Matthew Hansell, partner and head of private client at Mills & Reeve said: 'We have always been in the advisory market. The private client team has expanded hugely. We started three years ago in Birmingham and now have 29 lawyers '“ the largest team in the West Midlands. Last year we generated £3.25m in fees and expect to reach £4m this year. We act for seven of the top 20 Rich List in the West Midlands and our clients have a combined wealth of £7bn so we are right at the top end of the market. I was already in the market when I joined the firm. We picked up the private client team from Wragge & Co and then two divorce lawyers joined us '“ they are part of the private client team now. We have been building the team '“ and recruiting junior lawyers. It is a long term investment.'

He continued: 'Success is down to a commitment to private client work. You need to invest to get a return. In medium to small-sized firms in order for private client teams to survive you need to be a significant part of the firm contributing at least 15 per cent of the overall income. Otherwise it is not important enough to the firm to justify the investment, the marketing and to have the right staff in place for succession.

'Mills & Reeve operates across four main sectors '“ the others being corporate services, real estate and insurance '“ yet private client is the most profitable. This is achieved through a combination of the right systems and levels of staff for the different types of work. Obviously, you need partners and qualified staff for dealing with clients on advisory and relationship matters but the implementation work can be done by paralegals and more junior lawyers. Even Lords want their legal work done efficiently! Why have we succeeded? This is probably our market position '“ right at the top end.'

Distribution channels

New entrants and multi-disciplinary practices could force a change in the distribution methods involved in reaching the market. Let us take an imaginative leap and consider what the consumers might really want if they could redesign the distribution of legal services.

In the smart, modern Foxtons estate agency in the high street there is now a smiling, friendly new member of the team who takes care of all the legal stuff on your move.

A couple of people visit you at home in the evenings so you do not need to sort out childcare or worry about parking in the town centre. The legalities of your marriage breakdown are sorted out painlessly while the psychologists support you and the kids and the financial adviser deals with short and long term issues.

Right next door to the registrars office is a quiet and comfortable office where you arrange the funeral, spend some time with a sympathetic bereavement counsellor and sort out the deceased's estate.

After a meeting with your financial adviser updating your insurance, your policy documents are uploaded onto your secure online document depository, where the deeds to your home and details of your bank accounts and shares are kept. You receive an email outline of your will using this information immediately.

At your local supermarket, you pass by the in-store bakery and fresh fish counter, pick up your new reading spectacles from the in-store opticians and then spend an hour having a coffee and sorting our your will at the in-store legal lounge.

While enjoying a drink at your local coffee shop, you use your mobile phone to check out the online will writing service. As you encounter a problem answering the questions, you call over a legal technologist who helps you finalise the electronic will.

Specialise and develop new services

Once a particular market segment has been identified it is possible to specialise and tailor the service to meet very specific client needs.

'Being a specialist and having a niche is what protects lawyers from many of the changes and competition in the market,' says Frances Pierce, head of catastrophic injury at Rix & Kay. 'Some in my field are advertising that they can get a settlement in two to three years. But they are not getting the best deal for their clients and are settling too easily. For example, clients might be promised £2m'“£3m within a couple of years and that seems like a good deal. I might explain that I could achieve this as an interim payment and then get a full award of up to say £9m although it will take longer.'

There are examples in residential conveyancing where firms have identified a particular niche and specialised in, for example, new buildings, historic mews or riverside properties. Another approach is to watch the market for new and emerging trends and needs and to be quick to grasp opportunities to package and offer new services. A commitment to watching trends and reacting quickly to make the most of new opportunities through innovation are not typically found within legal environments.

Nick Fagg, head of residential conveyancing at Rix & Kay said: 'The management challenge is to provide a world class service that is uniform across three offices while ensuring that everyone is constantly learning and sharing their knowledge and ideas and constantly developing and evolving the service by, for example, introducing innovation and new services. If something unusual comes up and we find an unusual solution we look to bottle it up and promote it. For example, we established a simple internal system with folders for particular towns and roads so that everyone can enter information about the properties, technical information and responses to queries. This means that all of our team can be more knowledgeable '“ which is valuable and reassuring to clients '“ as well faster on routine questions. Another area like this is flying freehold '“ where we developed a short factsheet that conveyed the essence of the issues in bite- sized non technical pieces to help clients make choices about the solutions that we offered them.'

Other recent developments in new service development has been collaborative law. While mediation was long held out as a possible 'new service' and more cost effective and less painful way to sort out divorce and the financial and child access issues, the collaborative law approach appears to have been more successful. Collaborative lawyers commit themselves to the resolution of disputes by agreeing that, should there be a breakdown in any negotiations, both lawyers will play no further role.

As an observer of law firm management over the past 20 years I know, first hand, how hard it is for firms to adopt a rigorous approach to management, professionalism in marketing and a tough stance on what clients and work will or will not be accepted.

Both the decision structure within a partnership and the inability to allow hired professional managers to make and implement tough commercial decisions have held back many firms despite the cries of the more forward looking lawyers. If the legislation means that non-lawyers can take a proper and equal seat alongside the producer lawyers to drive firms closer to the corporate models, which will deliver success from bold and brave commercial decisions, then my view is to bring it on.