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A nice little earner
Law Society Gazette – 9 June 2005

Law firms are reportedly wasting millions on misdirected marketing. So what are they doing wrong? They need to convince partners of the value of a clear strategy, says Mark Smulian

The days are long gone when solicitors could promote their firms by simply having lunch with clients or personal friends in the business world, ideally at the 19th hole of their favourite golf course.

Law firms are businesses like any other, but because it is only relatively recently that solicitors have been allowed to promote themselves, legal marketing is still a young profession.

Those within that profession can still face an uphill struggle to convince partners of two things - first, that marketing needs to be done at all, and second that it is best done by partners as part of a business strategy.

Last month's report by consultancy Swimming Ducks suggested law firms squander millions of pounds on misdirected marketing. The report found that of 102 firms surveyed, most had little faith in their marketing, and only one-third even bothered to analyse the results achieved.

Managing director Louisa Verth, who advises law firms on marketing strategies, says she carried out the survey because she felt strongly that too many firms were getting it wrong. She says: 'There were a lot of problems with firms' marketing strategies, and a lot of clients [in marketing roles at firms] had problems convincing senior partners to spend up front.

'Where firms did spend, it was on odd disconnected things in a way that was not coherent - like one-off seminars, drinks receptions and brochures - with little thought given to what the firms wanted to achieve.'

She adds: 'One firm's research project indicated that half of potential customers had never seen its marketing efforts, and 25% had never heard of the firm.'

Firms need to commission research to establish their position in the market before they can decide on the most fruitful areas of expansion, Ms Verth advises. She says talking to existing clients will reveal only how they see the firm, not how potential clients view it: 'If you depend on anecdotes gathered in a pub or at lunch, you do not get an accurate picture. The culture is very much one of who you know and networking. But that does not bring firms to the notice of new clients.'

Direct marketing is the most likely route to new clients, who will receive information targeted to their needs, she says. 'Don't just run seminars or corporate events - it needs one-to-one contact,' she warns.

It is also a mistake to assume that what works in one situation will work in another. Ms Verth says some US firms that have set up in England have come unstuck by taking the one-stop shop approach used on the other side of the Atlantic.

'American firms will do a client's property work and also their merger and acquisitions work,' she says. 'But people here want specialist advice, and they may want to take a merger to a City firm and their property work to someone outside of the capital.'

Jennifer Yap, marketing manager at London firm Campbell Hooper, says because it is difficult to measure the return on investment, partners can be unconvinced that the firm's money is being well spent.

'There are people in firms who are pro-marketing, those who are anti, and those who just do not understand it,' she says. 'None of that makes my job, or that of any other marketing professional, any easier. A partner in a firm where I used to work once said to me that the firm would only realise marketing's value if the department closed.'

Ms Yap has found most fee-earners reluctant to get involved 'because they see marketing as time not earning fees, but they need to get known in the market place'.

She adds: 'Tenders won, press quotes and new clients are all measures of success, but nothing is black and white.' Many marketers identify the partnership structure as a key problem, especially in larger practices, because partners maintain that they should each have their say on marketing efforts - often leading to confusion and conflict, especially caused by those who see marketing as nothing more than a drain on their monthly draws. Much of it comes back to the problem of seeing a return on investment.

Nick Jarrett-Kerr, former chairman of the Law Society's law management section and partner at legal consultancy Edge International, says it is 'very difficult' to prove any connection between spending on promotional material like brochures and seminars, and increased business. But he agrees with Ms Verth that many lawyers misdirect their marketing budgets by spending it on lunches with the 'same old people', or inviting them to seminars.

'Firms need a clear plan of which clients they want to grow and which prospects to focus on, rather than a scattershot approach of shooting off marketing at random and hoping you will hit something,' he says.

Lawyers who deal with businesses should be able to identify potential clients in their specialist sectors. Those who deal with private individuals have a harder task, but even here marketing can be effective if targeted at referrals, for example from estate agents, he says.

John Haresnape, head of business development at City giant Herbert Smith, has been through a refocusing of marketing work along the lines suggested by Ms Verth. He says: 'We have put a lot more time and investment into client development activity and have not focused so much on brochures.

'We still use them but we are trying to encourage partners to think commercially. For example, if they go to see a client they should take something the client is likely to be interested in.'

Staff are encouraged to think beforehand what they want from a meeting with a potential client, so they know the opportunities before they arrive.

But Mr Haresnape explains that connections are still important: 'There is still a lot that is person-based. We may identify five organisations in a sector and someone here may know somebody there. We will normally find an entrée, but you cannot rely on the old-boy network nowadays and you have to be strategic.'

Herbert Smith has redesigned its Web site to act as a basic shop window for the firm. Mr Haresnape says: 'The Web site is very important for graduate recruitment, and more clients are looking on it just to get an idea of the firm. I think Web sites should be as simple as possible, without a lot of pop-ups.'

The firm has also rethought corporate hospitality, and tries to run events around its sponsorship programme. One was a private view at the National Portrait Gallery where it sponsored an exhibition, which generated positive feedback.

'I've seen research saying corporate hospitality is ineffective and for the most part I agree, but if tailored properly it can yield results,' he says.

Gillian Khan, marketing director at City firm Berwin Leighton Paisner, has been in her post for five years. She says one problem in marketing is that people tend to move on within two years. She explains: 'People have often not stayed long enough to effect a cultural change, because some partners are marketing-orientated and some are not.

'You cannot just tell partners to do marketing - you have to convince them. Some think marketing just consists of phoning the marketing department and it will get done, and others will put on an event but take no strategic view.'

Ms Khan adds: 'A firm's priority should be to defend and develop the existing client-base, and not chase new business at the expense of existing clients. Existing clients ought to be the most promising source of further work, and were they neglected in favour of new business the firm's reputation would suffer, which is a crazy position to be in.

'It is sensible to try to grow business from existing clients and then use a targeted approach for new ones. Look at relevant sectors and target where you know someone. I don't believe in cold calling - it is not effective.'

According to Swimming Ducks, law firm marketing spend has increased over the past five years from a typical budget of £50,000 in 2000 to one three times that size today, and much higher in the largest firms. 'Law firms are spending huge sums of money on activity that is not founded on a rigorous analytical basis,' it warned.

Firms may be concerned to learn that they are wasting millions in misdirected marketing. But what should really leave them cold is how much more they are squandering by missing out on the rewards that a more strategic marketing approach could have reaped.

Mark Smulian is a freelance journalist