How to get ahead in banking
10 March 1995
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7 February 2014
Banks have been aiming increasingly aggressive marketing campaigns at law firms. The Royal Bank of Scotland is sponsoring the 1995 solicitors' annual conference and many of the major clearing banks are using direct mail to try and shake the loyalty law firms have to their bank.
But how effective are these marketing strategies?
Laytons' national partnership administrator Douglas Knowles is unimpressed with the marketing efforts banks make towards law firms. He has had several approaches from high street names which generally send a letter, make a phone call and then try and arrange a meeting in person.
"All banks say that they have a unique selling point," he says. "Unfortunately, this is rarely true and because the marketing most banks do is fairly pedestrian, it is also pretty ineffective. Lawyers buy on service and cost-effectiveness, they tend not to be terribly promiscuous and banks have a long way to go before they can really start to make inroads on getting new clients."
Andrew Jennings, director of finance at London firm Ince & Co, is even more scathing. "Approaches from other banks go straight in the bin," he says. "That is a factor of how effective our own bank is. Quite frankly, you are not interested in being sold something which you have already got."
Banks find law firms attractive because of the Solicitors' Accounts Rules which allow law firms to place substantial client funds with banks.
Andrew Priest, accounts manager at Davies Arnold Cooper, says: "Banks are not terribly interested in managing the office account but they are desperate to get involved with client funds."
Banking, like legal services, is a service industry and service industries rely on the chemistry between individual players. Banks must work on developing the personal relationship to get alongside the decision-makers in a law firm. They must make sure they are well-known to the decision makers in a firm.
Central to any bank's marketing drive is informing clients of staff changes. It is vital that the marketing department step in and arrange for the new team to meet the law firm.
Legal services is an increasingly competitive market and law firms, like any business, want the best banking deal available. The problem banks face is that most law firms believe their existing bank gives them the best deal. Certainly, the firms canvassed seemed extremely reluctant to change.
Lawyers should not forget that they have a unique opportunity to cross-sell which they could exploit to a greater extent. Banks want to handle solicitors client funds but, as Priest says: "The return match is that banks are in a position to give solicitors instructions on insolvencies, receiverships, mergers and acquisitions and start-ups, to name only a few."
However, Laytons' head of private client work Ian Burman says: "The days when you could trust your friendly manager to look after one of your rich clients are long gone. Banks are now in direct competition with law firms and have their own in-house trust and executor departments waiting to snap up any clients that may come their way."
The bottom line seems to be that banks have not worked out how to convince firms to switch allegiance. Lawyers, as a breed tend to be fairly conservative, and although some banks work on the personal relationship, more innovative techniques are necessary if they really want to win the client. Simply raising their profile is not enough.