Knowing me, knowing you

Law firms have arrived late into the world of advertising. Since legal practices were given the go-ahead to advertise their services in 1994, few have taken the plunge. But a polarising market is forcing lawyers to consider how they are perceived by their clients and potential recruits, and whether they can create corporate brands.

Advertising agencies and law firms have begun an uneasy flirtation, marked in many cases by ignorance about each other's business. Many law partners are shocked at the costs of running an advertising campaign. Agencies say that a media budget of £500,000 is the basic entry point.

One agency insider complains: "Law firms view it as something done on the cheap. They're not into advertising their own brands, they're short term. A lot talk about advertising, but when you go to see them they look at the price and it's the end of the conversation."

Nevertheless, hiring agencies has become more common. Clifford Chance works with Ogilvy & Mather's Primary Contact division, Hammond Suddards (now Hammond Suddards Edge) worked briefly with Team Saatchi (see box) and the Law Society has employed J Walter Thompson and Osprey London. Agencies argue that it can be more cost-effective to build an umbrella brand sitting across all marketing activity, rather than just produce brochures for different practices or run seminars for clients.

Some 40 per cent of all significant advertising agency appointments in the UK are made through AAR, formerly the Advertising Agency Register, a company which matches clients with some 80 agencies on its books. For a fee of about £2,500, AAR will take clients through a number of stages towards hiring a creative agency.

First, they get the client to fill in a form about their business and state what they hope to achieve by advertising. AAR will then find some 15 suitable advertising agencies with relevant experience and show their promotional videos. Together with the client, this is whittled down to about five agencies and then "chemistry meetings" take place to see if the two parties get on well together. The client will then shortlist about three agencies and prepare creative or strategic work from a brief for a competitive pitch.

AAR managing director Martin Jones acknowledges that this process is often difficult for law firms – they need specialised knowledge, which not all agencies can provide. Some, however, are keen to take on professional services clients to build up their knowledge of the sector. Jones says: "You have to consider whether advertising is the answer, or public relations or direct marketing. Advertising agencies tend not to be very specialised."

Law firms' marketing budgets may seem insignificant compared with British Telecommunications' £120m, Camelot's £70m or the £5m spent by one company on launching a packaged grocery brand. Therefore, they may prefer to hire small agencies. Rather than appointing one of the top five – Abbott Mead Vickers BBDO, BMP DDB, J Walter Thompson, Publicis or M&C Saatchi, all with billings of over £230m – they might look for an agency between 50 to 100 in the size rankings. Or they might go for a medium-sized agency such as HHCL & Partners, Duckworth Finn Grubb Waters or Banks Hoggins O'Shea/FCB.

Jones says: "You get what you pay for, and a big agency will cost you more. But remember, even the biggest agency is not very big. AMV has only 260 staff." And he warns: "Don't fall into the trap of getting an agency, because the senior partner plays golf with an agency chairman, or is a non-executive. There's a lot of pressure to use people who someone knows."

For some, the AAR route may seem a little cold and impersonal. Andrew Mitchell is the managing partner of agency Mitchell Patterson Grounds Mitchell, which works for Cinven venture capital. He believes that using personal contacts to select a shortlist of agencies can be preferable. This can be done by seeking the recommendations of colleagues, rivals or marketing services providers such as PR companies and designers. He says smaller clients such as law firms can get lost in big agencies, and after initial meetings with senior staff they are often passed down to young executives.

Some firms may choose to have relationships with different types of agencies, such as design, media buying and marketing. Ian Powell, marketing director of Irwin Mitchell, says: "It depends on the adaptability of agencies. We have a roster of agencies to pick from, just as our clients have a panel of law firms. If I can, I prefer to get the relationship right."

But the aim of appointing an advertising agency is to get strong creative work to differentiate the business from its rivals in the minds of clients and staff.

At the pitch stage, it is not just about choosing the funniest or most striking creative work. The strategic element is essential. The agency should present a clear understanding of the goals the firm wants to achieve, its position in the market and long-term objectives. If the strategy is right, the creative work should follow suit.

Cost is the main factor that deters law firms from launching sustained advertising campaigns. Agencies now charge fees rather than commission on media spend. This fee is worked out by adding the day rates of staff employed to the overheads. Profits might be about 20 per cent above this, though a performance element can be factored in – 20 per cent profit if the advertising generates 3,000 extra inquiries or up to 25 per cent if there are 5,000.

Some question whether it is necessary to employ an agency at all. Simon Slater, director of strategy at Osborne Clarke OWA, claims that in seven years in the business, he has never once used an advertising agency for a campaign. "Should a law firm retain the services of an agency in the first place? I'm not convinced unless your objectives are well understood. Law firms have not been clear about their objectives."

Slater believes that there is little point in running a short-term campaign, such as placing a full-page advertisement in the Financial Times for a few weeks. Advertising will only work if it is part of a sustained, long-term effort to target a particular client group and build a corporate profile. He believes that for many firms this is more effectively achieved through well-worded recruitment advertisements in the legal media and in the trade publications of targeted sectors. But he says that these should not be undertaken in-house and that it is worth hiring the services of a copywriting company to help with this.

With international expansion and mergers on the cards for law firms and the need to tell people why one law firm is different from the next, advertising bosses are expecting the legal world to become big business.

Hiring an agency is just like buying any other service. It is essential to know exactly what you wantand to gain expert knowledge of what is on offer and then shop around to get the best deal. And an ability to see through the salesman's spiel is paramount.