Treasure Island
08 November 2011
The primary target for every private client practice has to be the high-net-worth individual. This is the type of client that generates the ‘real’ fees – more frequent tax advice, more complex estate and probate and a higher likelihood of an expensive divorce or multi-faceted trust arrangements. One of these clients alone can amount to thousands of pounds in repeat purchase fees during their lifetime and all a solicitor needs to do is make sure they look after them properly. However, in reality, what percentage of the population can really be considered to have a truly high net worth? One per cent? Divide that group (700,000 from a population of 70m) into the number of law firms (11,000) chasing those particular targets and you’re not left with a wealth – if you’ll pardon the pun – of opportunity.
The next rung down is the reality for most firms. The ‘comfortable’ client. This is the group that has enough in terms of property, savings, investments and dependants to have to make (and subsequently update) a will and – statistically – should create divorce or family matters. There are attractive, if not spectacular, fees to be made through probate and, looked after correctly, they will come back (semi) regularly for conveyancing and other personal services.
Say these ‘comfortable’ clients represent 15 per cent of the population (and personally I think that’s probably high), that’s still only 10.4m potential clients for those 11,000 firms. Take into account the total number of solicitors, associates, legal executives and paralegals in those firms and, well, you can see where I’m going. Those two quick calculations lead me to believe there are, therefore, 58,900,000 potential clients currently being excluded from receiving legal services due to a number of factors, including price and perceived necessity.
So, the question is, how do you find, attract and service that huge number of potential clients, without damaging your firm’s value brand and the associated fees? My suggestion would be to ‘downbrand’. If downbranding strikes you as one of those annoying unnecessary marketing buzzwords, that’s because it is one of those annoying unnecessary marketing buzzwords. I hate them too, but it’s so much easier to say ‘downbrand’ than ‘develop a brand completely separate to your firm’s existing value brand that will allow you to offer and deliver cheaper legal services using a no-frills transactional model that's primarily delievered online'. I could make it more lofty, more academic and more complicated than that, but it would be a disservice. Downbranding is simple. Think supermarket 'basics' - bog standard essentials with no fancy packaging or bells and whistles. You pick it off the shelf and you get what you pay for and nothing more. In a legal context that 'shelf' will probably be a website: highly search-engine optimised, easy to navigate and riddled with 'calls to action' to maximise response. This site would house a commoditised, form-driven process that churns out only the desired paperwork - a 'basics' range for law firms.
Aside from the potential volume of requests, the attraction for the partnership is that the cost of sale will be low and, as the manual work behind the system can be undertaken by trainees or junior associates, the output will be more profitable. It also means partners can engage in more profitable work associated with the firm’s value brand and, from an HR point of view, the work provides a perfect (i.e. paid for) practical training ground for junior fee earners. But creating chiasmic distance between the downbrand and value brand is paramount. To maintain that distance requires a different name, design and tone of voice. Design and tone can be covered by a good web designer and copywriter but, when it comes to a name, there are two schools of thought.
The first (proposed by an Essex firm I can’t name as they’re readying themselves for launch) is to use Google Analytics or similar to find out the search terms your prospective market uses to find your services and buy the closest URL. Although I can’t name the firm, I will quote their BD director who underlined his views on downbranding perfectly with an anecdote from his previous life in high-end estate agency. When haggling over fees with a prospective client he agreed to 1.5 per cent as opposed to the standard 2.5 per cent. The client was delighted until he was told that wouldn’t include the online advertising campaign, the colour press ads or the Google work. “Why not?” asked the client. “Because that would cost 2.5 per cent.” Just like a supermarket, when it comes to providing the basics, firms have to be strong and recognise the channel can only deliver the service that’s been paid for.
The second is to choose a name with relevance but not relation to your current operation. Veale Wasbrough Vizards in Bristol launched Augustine PI (St Augustine is in their address) and took the additional step of setting it up not just online but also in their own heavily branded offices opposite the offices of the parent. However, I know within firms of every size there is, understandably, great resistance to the idea of commoditisation and, in fact, to using websites for more than nuts and bolts promotional work. After all, personal legal services are by definition a personal service, sold on the back of close client care and highquality bespoke advice. The case against downbranding and commoditisation hinges on one point: one size won’t fit all.
The immediate answer to this statement is conciliatory. If you don’t feel right delivering a complete service online, how about going halfway and just using your website for promotion, data capture and lead generation? If you were to add forms based on the interview you’d normally conduct during your initial consultative meeting with a client, the client would then be confirmed as a serious buyer rather than as a ‘tyre kicker’ fishing for the best price. You’d also be two steps further forward at your first meeting, enabling you to conclude the matter more quickly. And – this is for the marketers – even if it came to nothing, you’d have a new name on the database and an accurate ‘as we stand’ insight into what they’re looking for. Case closed. We can now go back to delivering personal legal services in the old way having tipped a hat tentatively at this increasingly digital age. Not quite…
Finding the halfway house is a start, but misses the point of downbranding. Downbranding is there to provide a standardised ‘no frills’ service at the lowest price point for the sizeable segment of the population who have a requirement, but not the budget, for legal advice delivered in the traditional way. Also – and again I’m being a realist not a snob – the volume of assets in these clients’ lives probably wouldn’t require the in-depth reconciliation a more affluent client would need. That said, every transaction made online should not be treated as one-off and discarded afterwards. Each virtual client should be treated the way you’d treat any other client – record their name and keep marketing to them. If you apply the same cross-referral rules as you would within your existing private client practice and make those suggestions either electronically or in person, you may find an open door to bring in new fees. Likewise, where you see a potential requirement to deliver more sophisticated advice in person, make sure those servicing your downbrand recognise the signs and pass on the lead. It may come to nothing but, for the cost of a phone call, it’s an opportunity to increase ROI that can’t be ignored.
There is already a thriving market for PI claims, wills and divorce on the internet. The demographic that values bargains over service is already sold on the fact you can buy legal paperwork online and have decided that the fact you can buy it must mean it is fit for purpose. That means there’s a ready-made audience ready for your commoditised, standardised online service. The idea behind downbranding isn’t to make sure your firm can take advantage of this market, it’s to make sure you create a distance between a ‘no frills’ approach and your current private client practice so your existing brand isn’t damaged by confusion over fee levels or service levels. This is the end of the market in which Tesco/Virgin/Co-op will gain ground quickest using proven e-commerce models, existing client data and call-centre type operations. Why should your firm – with its history and expertise – surrender this potentially lucrative market to them?
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