Trophy client or white elephant?

Every lawyer wants one of these, or at least thinks it would be good to have one. After all, so the thinking goes, trophy clients confer prestige on both lawyer and law firm, and there is the promise (more accurately, hope) of regular and abundant fees.

But are they really worth the trouble? I am not entirely convinced.

All too often it is the "trophy" aspect that drives the decision, rather than the business case. There may, of course, be advantages from a marketing angle in being able to say, "We are acting for XXXX", or to use a quote from a household name, but weigh that against the time and resource expended in securing them, the costs and resource involved in servicing them, and (dare I say it) the reputational risk of losing them. 

Pitching for (and winning) a high profile client in a sector or area of expertise in which you already have an established reputation is a different matter. Here the business case will (or should) be clear. But should you be pursuing a prospect primarily because of who or what that prospect is, rather than how they will fit into what you do? Building a new area of practice on the back of a trophy client is not always sensible - I have seen it done, and seen it done successfully, but there is always a cost.

And by their very nature trophy clients tend to be high maintenance: demanding of time and attention, on all matters. Again, this may not matter but there is the risk that this will skew the practice and that other clients will suffer.

So before commissioning the research, preparing the pitch, honing the presentation, telling all your partners, and getting the date in the diary, take a step back. Be sure that the advantages are real - and the potential disadvantages manageable. 

Some thoughts on branding

Back in 2005 I read Good companies are from Venus, a piece by Richard Tomkins in the Financial Times. I still have the index card on which I copied out a quote (I have a number of these, all now somewhat dog-eared). This is one I often refer to. For in less than 100 words Tomkins catches what “brand” means (and in doing so highlights the particular challenge for law firms when thinking about brand, if indeed they do).

A high quality product is just the price of entry to a market. Beyond that, what companies are really selling is the thing they can use to differentiate their products from their A high quality product is just the price of entry to a market. Beyond that, what companies are really selling is the thing they can use to differentiate their products from their competitors: the set of emotions, ideas, and beliefs their brands convey . . . The most successful brands and companies are those that establish a relationship with consumers based on communicating with them, understanding their needs and empathising with them.

Although Tomkins was writing about companies, much of what he said is equally applicable to professional service firms.

Law firms, by and large, accept that to succeed in today’s legal services market they need to establish differentiators (see my last post Futurology sucks). Not least, as in terms of legal expertise there is often very little to choose between good law firms and good lawyers.

Where lawyers have difficulty, is in articulating their brand, and communicating it. Lawyers don’t really do emotions, ideas, and beliefs - well, not in business. What they do is “law” - but then so do any number of other law firms.

Asking law firms to think about the intangibles of "brand", rather than what they do, is not always a very rewarding exercise. But it should be, because this is the first step for a law firm and its lawyers in identifying and then realising their brand. And in helping them to use this to build those long term relationships with clients which are so necessary to the success of the law firm.

Futurology sucks?

To which the answer is yes and no. (And to ensure you don't waste your time, this post is NOT about the Manic Street Preachers).

But you can be sure that the future is not going to be more of the same. Which seems to have escaped a lot of law firm leaders.

I had already started this post when I read, a little late, Reena Sen Gupta's article A self-deceiving return to business as usual in June's Legal Business. She argues that "an improving economic climate is leading top law firms to wrongly assume the ‘new’ normal is the same as the old one." This is very much what I have heard when talking with UK lawyers - and it is having  an impact on the approach law firms are (or aren't) taking to marketing and business development.

The discussion goes as follows,

"We've always done it (whatever "it" is; marketing, business development, client relationship) like this. Why do we now need to change? It's always worked before."

And my reply?

"You may not need to change immediately, but you will need to, sooner rather than later, so wouldn't it be sensible to at least look at how you might?"

For along with the certainty of change happening, is that change doesn't wait for anyone to catch up.

And perhaps one of the most important changes is in the dynamic between law firms and their clients. Once upon a time it was the lawyer who decided how legal services were to be delivered. No longer. Now it is the client who decides whether, how, and what legal services to buy. And who from (and the 'who' may not be a traditional supplier). There are any number of reasons for this: increased competition, new entrants into the legal services market, technological change, changing attitudes to lawyers. But the reasons, interesting as they may be, are not really important. It is happening and there is nothing that law firms can do to reverse this: Clementi, Moore's Law, and the impact of the recession let the genie out.

Instead what is important is how your firm will survive, and prosper, in this buyers' market.

For in terms of their expertise, law firms and lawyers are, by and large, all very much the same. So what is going to make your law firm different? How do you get noticed? And is it going to be enough?

More of the same is not a strategy that should recommend itself to anyone but it appears to be the default position for a lot of law firms. Change for change's sake is also not a strategy - but in a crowded and increasingly competitive legal services market place, there are going to be winners and losers. George Bull writes in Baker Tilly's most recent PPG briefing, Are you going to be one of the fifty survivors? that "of the 200 or so mid-tier law firms, only 50 or so may survive in the short-medium term". And whereas the briefing focuses on those necessary practical steps that law firm leaders should be taking to be in the successful 50 (and the pitfalls they need avoid) - in George Bull's summary, financial fitness, a clear strategy, and real differentiators - I would add getting your marketing and business development right, aligning it properly with that strategy, and ensuring that you communicate the message effectively.

Just too good to say no? Really?

You'll know the scenario well. It's late on a Thursday afternoon, and you get an email or a call. They're offering you a last minute opportunity to sponsor a column, buy advertorial, take a table at a dinner, entertain clients at a sporting event - and in each case the USP is that the cost has been heavily discounted.            

What do you do?

What I suggest is that you take a deep breath, pause, gather your thoughts - and then say "Thanks, but no thanks". Particularly if it is an opportunity that you turned down when it was first offered. If you didn’t want to do it then, why would you want to do it now? And don’t say because it is cheaper. And if you hadn’t heard about it before, why is it being offered now? There is only one reason - they couldn’t sell it before. OK, perhaps they got the pricing wrong (but if that is the case would you trust them to run the event?), or someone has dropped out at the last moment (it happens - but again why?). My money would be on them having to sell it, and thinking that reducing the cost will make it irresistible.

And what if you are persuaded to say "Yes."

You will have a very short timescale to prepare, to find the guests, write the copy, or design the advertisement. And does it really fit with your firm's business strategy? Is it aligned with your business development objectives? 

We have all done it. The combination of the sales pitch, the “saving” we are making (actually, you’re not: it's just the hole in the budget won’t be as big as it might have been), and the need to be seen to be doing something may just make it too difficult to say "No".

But try to.

And this may be why the next time (and there is always a next time) it's not you who are contacted but instead one of the partners. If that happens there are two things you are going to have to do: say "No" to the partner, and then have words with the salesperson. 

But once you have done it once, it’s easy.

"So what made you switch?"

When was the last time you asked a new client why they had decided to instruct you, rather than their previous firm, or another law firm?

And if you didn't ask them, why not?

There are plenty of reasons why clients switch firms: changes in personnel; perceptions (fair or otherwise) about experience, expertise, or value; service failure (a.k.a. cocking it up); occasionally even cost. And just like there are, or may be, any number of reasons for a client to switch, there are, or may be, any number of law firms that could have done the work / wanted to do the work / are disappointed they aren't doing the work. But they aren't. 

So why are you? Weren't you curious? 

You should be, because understanding why your client switched to your firm is the starting point for keeping that client. 

So ask the question.