Finaccord data shows affinity and partnership marketing on the rise for legal services providers

According to new research released by Finaccord, an increasing number of organisations are acting as affinity or corporate partners for legal services, much in the manner that insurance and other consumer services have long been marketed through partnerships.

Across a total of 1,700 organisations investigated, 518 (30.5%) offer a legal service in one form or another, usually in conjunction with one or more external partners (rather than via their own in-house resources). Indeed, across the five service categories considered – namely, legal helplines / assistance, commercial legal services, conveyancing, will writing and other consumer legal services – the research identified over 850 separate examples in total. Initiatives are most widespread in the area of legal helplines / assistance followed by commercial legal services, other consumer legal services, conveyancing and will writing.

Commented Alan Leach, Director at Finaccord: “Many of these examples pre-date the introduction of alternative business structures (ABSs) from October 2011 onwards although that change to the competitive environment, brought about through the Legal Services Act of 2007, is now producing a number of important new initiatives. For instance, these are especially visible in the insurance sector where ABSs have been created recently by a number of competitors including Admiral Insurance Group, Ageas, Autonet and DAS.”

Among not-for-profit affinity partners, professional associations, trade associations and trade unions are often involved in these areas, as are banks, building societies and insurers among financial partners, and estate agency and property services firms among commercial partners. As shown in the bar chart on the final page, 71.1% of trade unions offer legal services with the equivalent percentages reaching 62.5% for automotive associations (although there are only eight of these), 43.1% for insurers, 42.6% for building societies and 38.6% for professional associations.

At 32.5%, the percentage is lower for trade associations but that is partly because with over 720 organisations in this sub-category in total, it is by far the largest of those investigated. In fact, 235 trade associations offer legal services to their members making this the area in which partnerships are most numerous (as opposed to frequent), far ahead of trade unions (69) and professional associations (56).

The research also calculates both the unweighted and weighted share of partnerships of providers in each of the five service categories with the former measure based on a straightforward count of the number of relationships identified and the latter on a formula that takes into consideration the likely importance of the organisations with which the partnerships have been established.

For legal helplines / assistance, the leading provider in both unweighted and weighted terms is Croner, a trading style of Wolters Kluwer (UK), mainly by virtue of its many relationships with trade associations. Turning to commercial legal services, Steeles Law emerges as the leading provider on an unweighted basis but is displaced by Irwin Mitchell in weighted terms.

In the realm of conveyancing, Thompsons is the provider with the greatest number of affinity partnerships although eConveyancer (a trading style of United Legal Services) leads on a weighted basis. For will writing, Thompsons leads once again in the unweighted analysis but is overtaken by Brodies and Hugh James (used as a duo by several major retail banking brands) when viewed in weighted terms. Finally, with regards to other consumer legal services, Thompsons leads the way by both measures – this legal services firm holds partnerships with a total of 30 different organisations, most of which are trade unions.

Concluded Alan Leach: “In an increasingly competitive environment, opportunities in affinity and partnership marketing constitute an important consideration for providers of both commercial and consumer legal services in the UK that want to grow their business. Finaccord’s research shows that close to 250 providers of legal services hold at least one partnership among the organisations investigated and a significant number of these hold five or more relationships which underlines the extent to which affinities and partnerships constitute a significant element of their marketing strategy.”

“Ultimately, the impact of the Legal Services Act has not been to produce a ‘big bang’ of the type seen in the financial services sector a generation ago; moreover, the description of it as ‘Tesco Law’ may also prove to have been wide of the mark; at the time of the research, no supermarket chains had yet launched legal services. However, it has injected a significant degree of uncertainty into a sector that has already experienced declining profitability in a number of areas in recent years, causing traditional law firms to re-think the way that they promote their services to customers and acquire new business.”