To Law Firm Marketers

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1 To Law Firm Marketers We ve come a long way together. When FGI and Greenfield/ Belser conducted the first-ever state of law firm marketing survey, we were measuring an activity barely a dozen years old. The first volume in this series, Law Firm Marketing Guide (1991), reported an impressive range of marketing tactics and tools were being employed in American law firms. Some important patterns had already been set, but no overall theory had emerged to tie together, explain or guide the diverse activity called law firm marketing. Now we ve done it again. To carefully measure progress and trends, we asked the nation s law firms the same questions we asked in To match the survey to changing reality, we also asked about new tools and tactics, such as Web sites and PowerPoint presentations. The big news: everything is bigger. Our survey reveals a profession that continues to grow in size and marketing savvy. To match the amazing growth of law firms, we note that compared to 1991: twice as many firms have in-house marketing staffs the typical marketing budget has increased sevenfold nearly three times as many firms engage in advertising. Branding is the name of the game In recent years, we have seen branding and positioning theory emerge as an effective route to understanding the complex psychology that results in name recognition, visual memory and loyalty between clients and their lawyers. On a practical level, we have watched branding at work in a few law firms and we are impressed by the results and the quick acceptance by lawyers and management committees. Thus, to give greater meaning to our survey results, we have woven our survey report throughout a practical guide to applying branding theory to law firm marketing. About the survey In January 1999 we completed in-depth interviews with law firms selected at random (geographically and sizewise) from the nation s 1,000 largest firms. In nearly every interview, we talked with the person in charge of marketing for the firm. Survey conclusions stated as percentages have a maximum margin of error of ±8.6 percent. All results are valid for firms of 31 lawyers or more.

2 Branding your law firm 1 What is branding, really? 2 Strategic brand analysis 3 Why is branding necessary? 4 What is positioning? 5 What positions are available for law firms? 6 The benefits and drawbacks of brand leadership 7 Repositioning brand name firms 8 Focus the brand with market research 9 The elements of a branding campaign 10 The real goal of branding 11 How people find lawyers 12 How people choose lawyers 13 Anticipate buyer s remorse 14 The real value of a firm brochure 15 How to create great brochures 16 What s in a name? 17 The importance of visual identity 18 What a visual identity can do 19 Managing change 20 Yes, your clients read newsletters 21 Proposals are now a way of life 22 Why law firms should advertise 23 Measuring return on advertising 24 Why client surveys are critical 25 Web Web To sell, speak their language 28 Great expectations! You are the show 29 Who we are? 30 Who are our clients?

3 1 What is branding, really? Let s talk first about what branding isn t: Branding is not a fad like TQM. Nor is it just another name for positioning or the consistent application of an identity. Branding is bedrock marketing that has been intelligently applied to products and services for decades. But, if recent articles in the legal trades are any indication, it is so poorly understood that our guide to branding must start with the basics. So, out with it! What is branding? Branding is the active development of a personal relationship between the consumer or client and the product or service. The ultimate goal is to create an identification between you and the brand. Of course, no single brand can possibly represent all of you. A brand usually represents a piece of you a slice of yourself, a shard of your ego. When identification is successful, the brand builds a deeply loyal relationship between you and the product or service. Why do people feel so passionately about Coke or Pepsi when blind taste tests prove consumers cannot tell the difference? Because they identify with something the brand represents. Brands shape our world and, in many ways, articulate how we feel about ourselves. Brands are built on prior performance; that is, on reputation. Often, the market itself defines the brand. For example, Skadden s reputation in mergers brings them to the table at premium fees. They have become the brand name in mergers. But this is not branding. This is the result of good luck and hard work, but the firm is not in control of its brand. Branding demands an active effort on every front from public relations to advertising to identity to guide and control the market perception. We are entering a new millennium in which it appears that everything will be branded. Usually we do not have the knowledge or information to fully understand the claims of a brand. For example, is a Volvo safer than a VW? Is Skadden any better than McDermott? Our inability to know or understand products and services is why branding is so valuable: Branding is a short-cut around intellectual proof. Buyers can make a wise list, but they always choose based on some aspect of brand identification.

4 2 Strategic brand analysis Understanding the foundation of your brand is not hard, just tedious, which is why the work is so seldom done. Here is the information you need to begin: Where does your work come from? Focus on your strengths. Identify which clients give you 80% of your revenues in any single area of practice. Forget the rest. Industry strengths. Classify your leading clients by industry. Be loose and creative about the classifications and you can discover hidden strengths in industries you may have ignored. Geographical strengths. Plot your clients on a map, either local, regional or national or perhaps all three. Weight them by assigning each color dot on the map a revenue range. Practice area strengths. Identify those practice areas that provide 80% of your revenues. This may be two areas or 20. Percent change. Identify the change in client and industry activity over the past five years. Surprised? Weight your strength in each area on industry and geographical tables. What is profitable and what is not? Profitability studies are an important part of the positioning effort, because no one wants to build a business on work that loses money. Marketing efforts should not simply increase the volume of business but focus on increasing profitable business. Match up the numbers Plot this information on matrices as many as you can invent. Shore up weaknesses; build on strengths. Where are you going? How do industries on the rise match up with your strengths? Market research can tell you where to invest your resources for the next two years, focus your marketing objectives and measure the validity of your positioning decisions.

5 3 Why is branding necessary? There are three times as many lawyers practicing today as there were 30 years ago. Branding is a tool for a competitive market. Four key trends demand branding be employed today: Population growth A quick glance at a chart of world population growth shows a trend line going straight up! The rising population is leading to increasing segmentation, a phenomenon known in its most global terms as tribalization. Tribalization As the population has increased overall, so have segments of populations. Many population segments have grown so much that they ve come to the attention of marketers seeking more efficient use of the marketing dollar. Groups that practice the politics of division only reflect the increasing segmentation of American society. Database development The growth of significant market segments has been matched by the power to identify the buying habits of those segments very carefully with computer databases that are collecting more and more information about each of us. The dramatic fall of the cost of computer memory, added to the rapid rise of processing speed, means more information costs less. In the past, four or five data points, (say, zip code, age, income level and race) may have been enough to target a market segment. Today, 200 data points are not too expensive to collect, as complete psychographic profiles are being developed on every American consumer. These three developments lead the wise marketer inexorably toward the fourth trend: niche marketing. Niche marketing Today, markets or buyers are segmented into dozens of niches. Within each niche, buyers of business services are looking for increasingly specific expertise. Business-to-business marketing may include all the above along industry lines.

6 4 What is positioning? Positioning is the theory that drives branding strategy. It defines the niche. Positioning is as fundamental to marketing as gravity is to physics. The theory informs how we should run our businesses as well as how we should market legal services. Positioning was introduced through a series of articles in Advertising Age in 1972 by Al Ries and Jack Trout, later collected into the marketing classic, Positioning: The Battle for the Mind. By observing the purchasing behavior of consumers, they developed a theory of (1) how we learn, (2) how we store information in memory and (3) how we retrieve information stored in memory. It is, in fact, a theory about human memory applied to buyer behavior. Businesses study positioning to learn how to influence the buyer s mind, so that the buyer not only recalls their product or service, but remembers it in a positive light. How the theory goes Ries and Trout observed that we live in an overcommunicated society. We receive more than 3,000 messages a day from the radio or television when we wake up, from the morning newspaper, from store signs on the way to work, and from magazines and the mail in our in-box a day-long assault on our consciousness by businesses of all sorts promoting their products and services. To protect ourselves from this rush of stimuli, we react the only way we can: We tune out. But the genius of Ries and Trout was to recognize that we don t simply reject the thousands of messages we receive. Instead, we select a small portion of each product or service category (usually only three or four) and rank them in precise order in our minds, like rungs on a ladder. Typically, those three or four we remember are the market leaders. They have won, according to Ries and Trout, the battle for the mind. Positioning is a promise Ultimately, a market position is a promise between the firm and the client. If you drive that promise through all of your communications so that you develop an identification by clients with your service based on that promise, you have created a brand.

7 Budgets are way up In 1999, marketing budgets average $9,135 per attorney. That s a 746 percent jump from the average $1,223 we found firms spending in More firms (50 percent) follow formal, written marketing plans, up from 40 percent eight years ago perhaps to justify those bigger outlays of marketing dollars.

8 Marketing staff follows law firm growth As law firms and their marketing budgets grow, so do marketing infrastructures. In 1991, only 56 percent of firms had a marketing director or anyone at all devoted full time to marketing. Today, 93 percent have a full-time marketing staff, the largest with as many as 20 full-time employees.

9 5 What positions are available for law firms? Positions may be broad ( We Try Harder ) or narrow ( The Best Bankruptcy Boutique in LA ). Positions can be built around features of your service or its benefits to the user. Your position may reflect an industry niche. The one characteristic all positions share is that they define the value of the service in the buyer s mind. The promise of expertise Corporate counsel rank expertise as the single most important factor in finding and choosing lawyers. But it s a tough position to gain because buyers can t judge quality. They can weigh the number of deals you ve done, speeches made, articles written, referrals given. Individuals, and some firms, can build a position around expertise, but most firms cannot afford to build a brand around a single skill set. So branding the large firm becomes harder. The place of prestige and the prestige of place In the legal profession, prestige carries enormous cachet. Because of the nature of this republic and its laws, brand name firms exist everywhere there are state boundaries hang on long enough, you ll earn a brand name! You can also seek a brand position in a metropolitan market or beyond the borders of the United States. The appeal of technology Yes, technology is an important component of the service mix, but our research shows corporate counsel don t ever place technology at the top of their decision pyramid. Technology is a dangerous market position because other firms can buy the next best thing and erode your technology gain. Other positions can define value for your firm: (1) the sense of business sense, (2) the value of excellent service (Ungaretti & Harris in Chicago offers a money-back guarantee of client satisfaction) and (3) the spirit of innovation. An innovative approach to routine legal problems can help a firm make the shortlist. But watch out! Innovation means originality. You d better have it. The public won t give you a market position simply because you insist on it. You ve got to prove it again and again.

10 6 The benefits and drawbacks of brand leadership The baggage that comes with being a brand name firm is both good and bad. Brand name firms in any market accrue substantial benefits: Brand name firms are called to the table. Work comes to them, even though all the work may not remain with them. They have achieved name recognition, the first step of successful positioning. Everyone in law can name the Wall Street firms and the Washington firms. They have become the go-to firms for those market segments. Brand name firms enjoy the presumption of quality. Brand leaders are presumed to produce quality work in every area. This makes the introduction of new practice areas considerably easier for brand leaders and more difficult for those firms chasing the brand leaders. But being a brand leader carries other baggage as well: Brand name firms are expensive. The leading firms usually are, in fact, the most expensive if hourly rates are the measure. Because leading firms are typically larger, their overhead is greater higher salaries, higher rent, higher equipment costs, higher cost of training young associates. Franchise firms must argue value over cost in order to level the playing field in price-sensitive or commodity-driven work. Brand name firms are old-fashioned and out-of-touch. The conservative tradition of the law may be what lawyers honor most about their profession. Ironically, brand name firms are tarnished by that same tradition. So often tracing their roots far back in time, brand name firms are viewed as stodgy and out of synch with the fast pace of contemporary American business.

11 Benchmarking studies inform sophisticated marketing A benchmarking study can tell you how your clients rate your services compared with how other firms are rated by their clients. The result is an objective evaluation of a firm s relative strengths and weaknesses. Nineteen percent of our respondents have used competitive benchmarking studies. Most (70 percent) rely on the objectivity of consultants to obtain and report client opinions.

12 Feasibility studies are little used, but highly appreciated Most law firms rely on little more than instinct and happenstance in deciding whether to open a new office or launch a new practice area. Only 33 percent have conducted office feasibility studies, and only 15 percent have conducted new practice feasibility studies. But firms that have used feasibility studies are glad they did. Seventy-nine percent of firms that have conducted office feasibility studies have conducted more than one, and 82 percent described themselves as satisfied with the results. Ninety-two percent of those that have conducted new practice feasibility studies rated their satisfaction at 6 or greater on a scale of 0 to 10.

13 7 Repositioning brand name firms Apositioning concept that is as important as positioning itself is repositioning. Margarine repositioned butter as an unhealthy spread. But folks still wanted the buttery taste. Therefore, I Can t Believe It s Not Butter was able to reposition its margarine competitors so that it sat closest to butter on the supermarket shelf. Law firms can do the same thing especially new firms in competition with the brand name firms. Competitors should portray brand name firms as stuffy, conservative, old-fashioned and out-of-touch. But what about the brand name firm under attack? It should preempt the young firm s strike by repositioning itself as Not the large, old-fashioned, stodgy, expensive firm you think we are. Not your father s Oldsmobile. Franchise firms must also prove they are technologically current, flexible and alert to cutting-edge issues. Why brand name firms own the capital markets Wall Street work from the investment bank side, not the issuer side is the holy grail of nearly every firm. But you won t get a position on Wall Street just by insisting you re as good as Davis Polk. Quality of work product is not the point. There are only a handful of investment houses that can handle deals in excess of $500 million and only a handful of law firms that can refer business back. So those deals stay tightly controlled. But Skadden Arps has a powerful Wall Street position because it repositioned the merger itself! Before Skadden, contested mergers were considered ungentlemanly. That didn t bother Joe Flom, who made a fortune off other men s sense of propriety. Meanwhile, Wilson Sonsini has done very well by repositioning itself at the intersection of Wall Street and High Technology. White & Case, Milbank, Cleary and others, including the London mega-firms, have done nicely by positioning themselves at different intersections along the avenue of capital markets Wall Street, London or Hong Kong and international privatization, for example. Wall Street business is not impregnable. But it takes mighty players with imagination to storm the ramparts.

14 8 Focus the brand with market research As corporate America knows, successful branding campaigns don t take place in a vacuum. Market research branding and positioning studies is the fundamental first step in any corporate branding effort. And law firms are beginning to follow suit. Branding and positioning studies target those directly involved in the decision to hire your firm both existing and prospective clients. They help you determine how you should be perceived, and alert you to how you are currently perceived. Know thyself Knowing where you stand is critical to the branding effort. How is your firm perceived now? What characteristics first come to mind when your name is mentioned? Branding and positioning studies search out the buyer s top-of-mind perception of your firm. They let you know if your market s perception matches your goal and, consequently, where you should target your resources. You ll also have to do a bit of navel-gazing. Look at how your experience, resources and skills stack up with your competitors. What position can you credibly claim? When you come up with a match between what the market wants and the qualities that make your firm unique, you have found your branding objective. Know thy market In any competitive milieu, several competitive positions are possible. Branding and positioning studies help you rank the most desirable. They measure the relative importance of various attributes including reputation, track record, size, price, geography and practice area expertise in the decision to hire a lawyer in your particular market. An ironclad rule of positioning is that you can t take a position someone else already owns. Branding and positioning studies identify which positions are available, which are already occupied and how entrenched the occupants are.

15 Few firms have taken the first step in branding Relatively few firms (19 percent) have conducted market research that compares the perception of the firm among prospective clients with the brand image the firm is attempting to project. Most firms that have commissioned branding studies expressed satisfaction with the results. Indeed, 23 percent of these firms have conducted a series of branding studies, rather than just one.

16 What marketing tools are most useful? Lawyers seem most comfortable using marketing tools that combine tangible value with personal contact. Most firms ranked seminars as the best and most useful marketing tool (53 percent), with public relations (28 percent), newsletters (18 percent) and sales training (14 percent) the closest competitors. Special events (6 percent) and marketing software (3 percent) were at the bottom of the list.

17 9 The elements of a branding campaign Branding is not just a slogan, a jingle, a name or a logo. Branding is a strategy that reflects the sum total of a firm s activity the way the firm does business. It is not a sales scheme cooked up by an ad agency; it is the business itself made public. A firm s market position and therefore, its brand must reflect the culture of the firm, its business mix and its aspirations. It must be drawn from the firm itself. Otherwise, it s all hype. Four components of corporate activity affect successful positioning: Service offerings Your services must be consistent with your brand position. Don t sell what you don t have. Nor should you market new services that do not match the firm s position. This may demand that practice areas be acquired or jettisoned, expanded or reduced. Professional and employee attitude Both professionals and nonprofessional employees influence the way the service is perceived by clients, other law firms, the media and suppliers. Involving everyone in the branding process is critical. An integrated marketing communications plan Every piece of paper that is printed by the firm, every document published from letters to forms, from brochures to advertisements reflects the firm s market position. They should be coordinated, consistent, creative and compelling. This consistent stamping of the firm s market position is why we call it branding. Citizenship Market position is not won just among your clients; it s won in the entire marketplace of opportunity. No public should be ignored in a firm s overall branding effort. In subtle and not-so-subtle ways, word of mouth in the community affects the perception of the firm among buyers of legal services. A firm does not achieve a brand overnight. Members of the firm and the public must learn how the firm defines value for its clients. This takes years!

18 10 The real goal of branding Abranding campaign with its attendant advertising, newsletters, brochures and Web sites will not sell professional services. The right person with the right service in front of the right audience at the right time sells legal services. A well-conceived branding campaign, however, does serve at least two important functions: It conditions the sale before you meet your prospect, and it reinforces the sale after you are successful. That is, a brand makes you easier to hire and easier to sell upstream. How does this happen? By establishing a corporate personality a visible persona that is the law firm in the minds of its various publics one that the public can identify with, one that reflects on the firm positively. Form v. function Law (and engineering and science) concerns itself with substance and scorns preoccupation with form. However, if only substance were important, then magazines would just publish typewritten articles, and corporate counsel would choose the unattractive and unlikable lawyer as easily as the attractive and likable lawyer. Buyers even lawyers who buy legal services are not immune to the power of design. Substance satisfies the intellectual fact gatherer, but design satisfies the emotional decisionmaker. And people make buying decisions based on that truth. Why own a Lexus costing thousands more than a VW when both get you there? Buyers will pay much more to satisfy emotional needs than they will to satisfy intellectual demands. We do not believe that form rules over substance; but neither does substance rule over form. Use them both!

19 Announcements are still a staple of law firm marketing When a law firm announcement shows up in your mail, chances are it s telling you about new partners, associates and lateral hires (86 percent). Firms also use announcements to promote new office openings (30 percent) and seminars (20 percent) and to celebrate anniversaries (5 percent).

20 Seminars still rank as top practice builders In 1991, we reported that 89 percent of firms had held at least one client seminar in the past year. More important, lawyers ranked seminars as the most effective tool for cross-selling legal services and gaining new clients. The same is true in 1999, only more so. Now, 94 percent of firms hold seminars regularly. When ranked for effectiveness, nothing else came close.

21 11 How people find lawyers Before the decision is made to choose outside counsel, the finding process begins. The goal: a short list of qualified lawyers, no more than three or four. If the matter is of bet-your-company status, the short list may double. Our research among corporate counsels shows that four of five buyers start by calling people they trust. 42% begin by calling others inside their company, while 41% start by asking business associates outside the company. Sophisticated legal buyers resort to legal directories when the referral network fails (as it does more and more often as the population of lawyers rises). With them, Martindale-Hubbell is by far the most popular (88%). Buyers also read ads, search the Web, review seminar materials and refer to articles written by individual lawyers whether in firm-sponsored newsletters or independent media to find the right lawyers or firm. An intellectual process Once the short list has been created, all candidates are functionally equal; that is, one candidate may have more experience, but the other may be more likable. One may have international offices, but another may have fewer potential conflicts. The finding or information-gathering phase is predominately an intellectual process. Our research shows the most important factors in the finding process are (1) expertise, (2) cost (not the lowest hourly rate, but the best value), (3) individual attorney reputation and (4) innovation. Buyers are willing to put you on the short list if you have an innovative way of treating a routine matter or a new approach to a complex one. But, you are unlikely to be chosen solely on your fresh approach unless the firm s reputation is already strong. Other factors that may be more or less important depending on the matter include knowledge of the buyer s industry or company, chemistry, billing practices and client orientation. Answers to some of those questions come only through an in-person meeting, but others can be answered by firm brochures, newsletters, proposals and other communications.

22 12 How people choose lawyers The only reason people ever make a decision of any kind is because they run out of time! The matter is urgent, supplies have run out, the car is waiting! At this point, because the choices are perceived as roughly equal, the buyer must make a predominately emotional decision. This fact of buyer behavior is at the heart of all advertising and other marketing communication tools. An emotional decision Two factors dominate the process of finding and choosing a law firm: Expertise in the pertinent area of the law was named as the top criterion at every phase; cost/value considerations ranked second, becoming relatively more important in the selection phase. However, in the choosing phase, personal chemistry and firm reputation move up the ladder of importance. For 19%, the reputation of the firm is the most important factor. That s not surprising, because most buyers of services must justify their choices to management. A law firm s strong reputation makes that chore easier. Other important factors in choosing lawyers are individual attorney reputation, knowledge of the industry, firm location, billing practices, responsiveness, prior experience with the firm and the firm s Total Quality Management. Notice the factors are slightly different and in a slightly different order than in the finding stage. Some are surprised to learn that responsiveness is so far down the list. But responsiveness is what is called, in marketing lingo, a post-purchase evaluation something that cannot be measured until the service relationship begins. Studies show that prospective buyers consider lawyers responsive if they deliver a brochure or other materials within 48 hours. To prove you are responsive, start being responsive right away. Notice that prior experience with the firm is also near the bottom of the list. That should terrify every lawyer and with good reason. Companies with revenues between $100 million and $1 billion use an average of 15 firms. Companies with revenues in excess of $1 billion use an average of 66 firms! So the best defense is a good offense: Keep in touch through regular client surveys and communications.

23 The firm brochure is universally used You can t sell without one is how one marketing partner put it, proving that the much-maligned law firm brochure is alive and well. Today, 92 percent of firms have at least one marketing brochure, up from 81 percent in Half (50 percent) have redesigned their brochures within the last two years.

24 Targeted brochures are on the rise Many firms have more than one brochure: 79 percent also have practice area or specialty brochures; 30 percent have branch office brochures. Interestingly, two marketing and public relations tools that have proven very effective for some firms reports of charitable giving and law firm annual reports are used by only 13 percent of all firms. Fortyone percent have published a firm history.

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