Differentiation is dead. Law firms and the search for distinctiveness.

Transcription

1 Differentiation is dead. Law firms and the search for distinctiveness.

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3 Story 1. Start 2. On the inside 3. On the outside 4. Being distinctive 5. End

4 1 1. Start Be distinctive 90% of what one law firm does will be the same as its peers. 10% will be distinctive. The challenge is to uncover, articulate and communicate what that 10% is. Being distinctive has never been more critical. The top 100 UK legal market is one where the minority dominate and the majority are competing for a much smaller prize. The 34 international firms have a market share of over 80%. Despite the apparent flight to scale almost half of the top 100 firms in the UK have revenues under 50m. Many firms simply did not exist two years ago. Blake Morgan, BLM, Bond Dickinson, Charles Russell Speechleys, Henmans Freeth, Norton Rose Fulbright, Pennington Manches and Wragge Lawrence Graham are all creations of various mergers. The market is being reshaped through consolidation, which is leading to fragmentation. In a world where like for like growth is around 4%, firms can no longer rely on maintaining their share of the market and hope the market gets bigger each year. The trend for rates is still downward and clients continue to demand more for less. Increasing use of panels and commoditisation will keep squeezing firms. Consolidation will continue. Growth in the new world means increasing your share of a decreasing market, which means taking work from competitors. Finding growth is difficult. Growing when you offer nothing distinctive is almost impossible. To survive, let alone thrive, law firms need to stand out and be crystal clear about their market proposition. Differentiation is dead This thinking will examine how well the top 100 UK law firms articulate and communicate how they are distinctive. It will explore their values, how they describe themselves and their core marketing messages. It will highlight the disconnection between what law firms say they are like on the inside and how they communicate it on the outside. The thinking will explain why and how most law firms are failing in their search for distinctiveness. It will then propose a practical and straightforward way for them to become RAD (Relevant, Authentic and Distinctive) and communicate it by saying what they do and doing what they say. On the face of it, clients have huge amounts of choice, but what kind of choice is it? When everyone says and does the same thing clients will make a choice based on the only thing they can price. This is not good for anyone. Ultimately, these ideas will lay bare how law firms market themselves on the 90% of their business that is the same. The question is - what is your 10%? Something distinctive exists in every law firm. It just needs uncovering.

5 Populations 2 Categorising law firms subjectively helps no-one. However, in order to make the analysis digestible it was necessary to find some way of breaking the market down. This thinking uses five factual populations to segment the different types of UK headquartered law firms international, London, national, regional and Scotland. Law firms do not compete only within one population, but hopefully this is an objective grouping. Population International London National Regional Scotland Firms with Offices inside and outside of the UK Offices in London only Offices throughout the UK only, including London Offices throughout the UK only but not London Headquarters in Scotland, sometimes with additional offices in England

6 2. On the inside Values. The DNA of what makes you distinctive Values are the foundation of what makes an organisation distinctive. They are about culture and personality. They represent the actions and decisions that people take instinctively. You cannot tell someone what values they have; they either have them or they don t. You cannot tell someone to be innovative, collaborative or creative if, by their very nature, they aren t. 3 Only 46 of the top 100 law firms talk about their values on their website. A firm s website is its window to the world and one of the easiest ways for clients and prospects to find out about who it is. The 44 law firms that don't talk about their values on their website are missing that opportunity. The vast majority of firms have between three and five values. Across the 46 firms there are a total of 143 different values. On one hand that seems like a huge variety. However, all of those values fall into one of nine traditional types: Type Building relationships Client focus & commitment Commerciality CSR Excellence & quality Innovation People & respect Professionalism & integrity Teamwork Definition Being approachable and friendly, building strong relationships, flexibility Exceeding expectations, being ambitious, putting clients at the core of the firm Business focus, pragmatism, understanding the client s business Citizenship, sustainability, being a responsible member of the community Technical quality, rigour, attention to detail, precision Creativity, entrepreneurship, original thinking, continuous improvement Investing in people & talent, mutual respect Accountability, working hard, taking responsibility, behaving with integrity Collaborating, being collegiate, working together as one team

7 This section of the study explores the specific values law firms have and the type they fall into. A number of things emerge; some obvious and some less so. First, all law firms say the same thing. Straight away, law firms are telling clients and prospects that they are all exactly the same. 4 Types of values - % of all firms Client focus & Professionalism service & integrity commitment People & relationship building Innovation Teamwork Excellence & quality Commerciality Building relationships CSR Second, many values don't hold true. The most popular specific value is teamwork, but most law firms still talk about the challenges of cross-selling and encouraging partners to work with colleagues in other practice areas. Innovation values are the third most popular. However, few would challenge the notion that law firms are innately conservative and risk-averse organisations. This gives the impression that many firms choose values they think clients want, or represent what they would like to be, rather than what they actually are. This is dangerous. A broken promise is worse than no promise at all.

8 Third, many values should be redundant. After teamwork, the most popular values in order are integrity, respect, excellence, commitment and quality. Lawyers should embody these qualities as a matter of course. So should everyone who works for the firm. You wouldn t (or shouldn t) recruit people who are not professional and dedicated or do not have integrity. Most common values in descending order Teamwork Integrity Respect 5 Excellence Commitment Quality Law firms are highlighting the 90% of their business that is the same as their peers rather than emphasising the 10% that makes them distinctive. All they are doing is telling the world that their people are highly able technical lawyers who take their jobs seriously and work hard. Values matter because people and relationships matter. Clients and prospects are presented with lots of technically good lawyers who take their jobs seriously and work hard, but they choose to work with lawyers who have something else on top. Law firms need to work out what that something else is that characterises their culture and approach. To do this they need to spend more time finding out from their clients what it s like to work with them and more time finding out from their people what it s like to work for them. Find out from clients what it s like to work with you and from people what it s like to work for you

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10 3. On the outside Who are you? Imagine you are a client or prospect. In front of you is a selection of proposals from law firms bidding for a piece of your work or place on your legal panel. From the front cover, they all look broadly the same, with a similar range of images and titles. You open them up and, after being thanked for giving them the opportunity to submit a proposal, you read their lift speech (or elevator pitch if you are in the US) the 'about us' sentence designed to grab the attention. What you will read are a series of almost identical statements, totally interchangeable and homogenous. Rather than helping them to stand out, what law firms do when they talk about who they are is blend in. 35 Most common ways law firms describe themselves - % of all firms Geography - office locations Leading - International - top - national preeminent - law firm premier Sectors & clients Full service Number of people Top 50 - top 100 Practices A law firm Heritage 30 of the top 100 UK law firms describe themselves according to geography and where they have offices. 27 describe themselves as leading, top, preeminent or premier. 27 also state that they are international, national or regional.

11 Only 13 firms talk about the sectors and clients they work with. In the majority of cases, the descriptions are so vague (corporate and public sector clients, financial institutions, global corporates, private individuals etc.) that they are virtually meaningless. Most common ways laws law firms describe themselves in descending order Geography and office locations Leading, top, preeminent or premier An international or national law firm Sectors and clients Full service Number of people Very few firms describe themselves in a way that helps people understand who they are or helps them stand out. Worse, almost all of the 'about us' statements from the top 100 UK law firms are features-based; virtually no-one talks about what they do or how they help their clients. Why you? 8 All law firm marketing is based on the same eight messages: Type of message Client focus & service delivery Geography Heritage How we help People & relationship building Sector & commercial knowledge Size & scale Description Building client specific teams, delivering services consistently across offices, being integrated across practices Geographic reach, office locations, local knowledge Length of time in business Adding value and achieving results Being approachable and collegiate, understanding the individual, building strong working relationships Sector knowledge, understanding the client s business, business focus Number of offices, number of people, turnover

12 80% is concentrated in just five messages, generally the same across each different law firm population. Again, law firms market themselves on the 90% of their business that is the same rather than the 10% that is distinctive. They assert rather than demonstrate; they say rather than show. 30 % of marketing content devoted to each message - all firms Client focus & service delivery Sector & commercial knowledge People & relationship building Size & scale Technical expertise Geography How we help Heritage Clients come to law firms because they have a problem they are trying to solve, an issue they are trying to fix or something they are trying to do. However, law firms spend the least amount of time talking about the things that clients are most interested in how they can help them. 9 Law firms spend more time talking about where they have offices than how they help their clients Some of the things that law firm marketing focuses on are sensible. However, what law firms say about these things are clichés and general platitudes that have little or no substance. Because everyone says the same things, they ve become white noise that clients and prospects tune out from.

13 4. Being distinctive From the outside out Your values are the DNA of what makes you distinctive, so what you communicative externally needs to be consistent with what you're doing and saying internally. However, there is a clear mismatch between the types of values that law firms have and their marketing messages. Top five types of values Client focus & service commitment People & respect Innovation Professionalism & integrity Teamwork Top five marketing messages Client focus & service delivery Sector & commercial knowledge People & relationship building Size & scale Technical quality Client focus & service commitment values talk about exceeding client expectations and being committed to their success. Client focus & service delivery marketing messages are about delivering services consistently across borders, offices and practices. Similar headings, but very different meanings. While sector & commercial knowledge and people & relationship building are the second and third most popular types of marketing message for law firms, commerciality and building relationships rank only seven and eight out of nine as values. While people & respect is the second most popular value type, what it means is investing in talent and treating colleagues with mutual respect 10 Innovation, professionalism & integrity and teamwork are three of the top five values, but they hardly feature at all in law firm marketing. Law firms are saying one thing internally and something else externally. This disconnect is clear and dangerous. Firms are telling their people to behave in one way and promising clients they will receive something very different. They are telling their clients that sector & commercial knowledge and people & relationship building are two of the most important things, but telling their people that they are two of the least important.

14 Uncovering and articulating Being distinctive is not about having a great idea. It is about a process of discovery, about discovering something that people haven't noticed. What do people already know (and like) about you? Does everyone know? What don t they know? What should people know about you? To work, whatever you discover needs to be RAD - Relevant, Authentic and Distinctive First, what you discover needs to be relevant to the markets you are in, the clients you work with and the work you do. It is intrinsically linked to your strategy, about where and how you want to compete. It needs to be important to the people you are selling to, otherwise they won't be interested in it. Second, it needs to be authentic. For your people to consistently think and behave in a certain way it has to feel real, otherwise they don't do it. If you want your people to go out and talk about it they have to believe it. If they don't, you will be found out. It is much easier to believe in something that is real than something that is not. Last, it needs to be distinctive. Whatever you say cannot be timid, bland, boring or half-hearted. Articulate it in as simple and straightforward a way as possible ideally a word, statement or phrase. Contrast, don't compare. Be bold and confident. The whole point is to stand out. Saying what you do and doing what you say Having uncovered and articulated how you're distinctive, you need to embed it and communicate it relentlessly and consistently, both internally and externally. The objective is to make the 10% mean more than the 90%. The diagram opposite shows how to do this by saying what you do and doing what you say. 11

15 Saying what you do and doing what you say Your RAD Saying what you do Doing what you say Share knowledge internally so that everyone can talk consistently and passionately about the business Define a set of values to act as a guide for people so they know what s expected of them Every bit of content on your website should reinforce your distinctiveness implicitly or explicitly Establish client service standards to set out what clients can expect and how you will deliver Bids and tenders need to tell a consistent story about how you re distinctive and what it means to clients Align performance and reward to values and behaviours so that people can see a link between the two Marketing materials need to be consistent with what you say on your website and in your bids and tenders Ensure your visual identity reflects how you re distinctive through your imagery, logo and colour scheme Coach people on how to tell the firm story in a relevant and tailored way for specific sectors and practices Develop a consistent language and tone of voice that is used in all of your internal and external materials 12 Make your buildings and offices look consistent so that clients and prospects always know who they are with Collect regular client feedback to check that you are delivering on your promise and doing what you say you will

16 5. End The case for distinctiveness Who are you? What do you stand for? What's your purpose? Who are you for? What's your proposition to the market? These are the critical questions facing law firms today. To answer them law firms need to uncover and articulate how they are distinctive. Too often though this is put in the too difficult box. There will, inevitably, be some who don't see the need. They will think that what they are doing already is good enough. There are a number of problems with this. First, the top 100 UK law firms collectively grew their revenues last year by 4%. That's not a lot. 51 of those firms grew by less than 5% and 26 showed no growth or declined. To increase growth law firms clearly need to do more than they are doing already. Second, actions speak louder than words. The mergers that we have seen, the redundancies, outsourcing of business services functions, near-shoring and off-shoring, cutting of expenditure budgets and the like demonstrate that law firms don't really think that what they are doing is good enough. However, these measures are about maintaining profits by reducing expenditure. It's one thing to manage a business for cost, but it's another to manage a business for growth and increase profits by growing revenue. Third, good enough will eventually become not good enough, especially if your competitors decide to up their game. Can law firms really afford to take that risk? A major part of being distinctive is, of course, about winning work by offering clients a more compelling proposition. However, that is only part of it. We need to stop thinking that it's just about marketing and the domain of marketing professionals only. Being distinctive is ultimately about your strategy and your DNA. It goes to the heart of who you are and what you want to be. It requires investment of time and effort from law firm leaders. Without that it will fail. With that it can be a hugely powerful tool for transforming the entire business. Done properly it will improve client loyalty, speed of decision making, collegiality, return on investment and recruitment: Clients are more likely to stay with a law firm that delivers the experience they were expecting and hoping for. Offer clients something that they value, that nobody else offers them and then deliver and you can have a client for life If you know what it is that you stand for it's easy to evaluate decisions and investments; if they don't align you say no. It suddenly becomes much quicker and easier to run a business effectively and strategically 13

17 Partnerships are by their very nature disparate organisations and encouraging a firm-first approach is difficult. However, if there is a stake in the ground that everyone believes in and buys into then it becomes something that binds everyone together. If people don't believe in it then they can always (and should always) leave A huge proportion of marketing and business development time and money is spent on things that do not support the message law firms are trying to communicate. Generally that's because they don't know what the message is. Understand who you are and what that means to the market and you will understand the things you can stop spending time and money on If you only recruit people who believe in the same things that you do, recruitment will be much quicker and easier. First, people that don't believe in the same things won't want to join you; second, you'll know much earlier on whether the people that do are right for you (and why wouldn't they be?). In time you'll have a workforce that are more loyal and more committed because of your shared values A business that wins new clients and turns them into loyal clients, has collegiate and committed people who use their time effectively, makes good decisions quickly and spends money wisely is a business that will be successful. But it can only become those things if it understands and communicates what it is that makes it distinctive. Law firms and lawyers do some wonderful work and contribute hugely to their clients success. What they say doesn t communicate these things. Often, law firms are better than they say they are. Nobody buys a car because it's exactly the same as all the others they test drove. Nobody buys a house because it's exactly the same as all the others they looked at. Nobody instructs a law firm because they are exactly the same as all the other ones they spoke to. Be distinctive. 14

18 About the author Lee Grunnell helps law firms be more distinctive. He has been marketing director for various types of law firms, leading mergers, rebrands and new positioning at times of change. He has spent his entire career in professional services marketing, also working for one of the big four accountancy firms.

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