Many City firms are facing the coming year with fear and trepidation. The managing partners of most medium-sized firms risk losing a large number of clients to the bigger firms and, as such, the prospect of merging has become increasingly more attractive.
Some firms have already indicated that they intend to fight their corner by specialising and putting their faith in marketing. There is nothing wrong with using marketing to make your firm appear more attractive as a potential takeover target, but using it as a tool to win new business and attract clients is a fundamentally flawed strategy.
In the battle for hearts and minds in company boardrooms, marketers have tried at various times to elevate marketing to the status of art, in which only the talented can perform, or a science in which only the highly trained can succeed.
But marketing is neither a science, nor an art. Marketing is a religion. The marketing evangelists have spread their message to all walks of life – hospitals, schools, politics, and even religion itself. Now it has entered the legal profession. It has a faith centred on the one true god: the brand. Marketing people evangelise inside and outside of their firms about the “power of the brand”. And they use it to justify enormous advertising and marketing budgets.
However, with the media explosion and the growth of new competitors, the power of the brand has been fundamentally undermined. On average the once powerful brands have lost a third of their market share to new rivals.
What marketing people thought for years was brand loyalty was actually brand habit. A habit that was all too easily broken as companies saw their market share diminish irrevocably.
How odd then that many law firms are rushing to become a brand by adopting a new logo, or appointing branding consultants and public relations firms to communicate “brand values”.
In an increasingly competitive environment, the big players have far more pressing problems. The latest in-house survey by The Lawyer (see page 11) is clear evidence of this. It indicates that two thirds of in-house lawyers believe they are being overcharged and are considering changing firms.
The fee structure is one area that is prone to attack from competitors and needs immediate attention. Clearly a greater degree of accountability and flexibility is needed to stave off potential threats. There are also opportunities to add value with extra services.
Slick marketing and advertising will not defeat new rivals. Offering a more comprehensive, cost-effective and efficient service will.
Reputation is important for winning new business and attracting the right calibre of employees is essential. But winning new clients should be less important than retaining existing ones.
The advertising business, which is so obsessed with reputation has never understood this. That is why the average amount of time a client stays with an advertising agency currently runs at less than a year.
Firms which obsess about their public image because of an excessive focus on winning new business often forget that it is the service to existing clients that count not the number of mentions in the legal press.