Charity shops beware?

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16 September 2011


Posted by Viv Williams, chief executive of Legal Futures Associate 360 Legal Group

Williams: don't grasp straws with both hands

The growth in access points for “legal services” is gaining unprecedented momentum. So what does this mean for the future?

Could it spell the end of the road for some of the charity shops that have come to dominate many of our struggling high streets and shopping precincts? Will we see new entrants to the market, all offering legal services, taking over the leases for these premises?

And, with the news of another high street offering coming to market in the form of Legal365, at what point will we reach an oversupply of these new entrants offering legal services?

Re-engineering legal services

QualitySolicitors is unquestionably the first national high street brand and, with its network of independent law firms, is the first example of re-engineering the legal services high street. The WH Smith contact points may, or may not prove successful – only time will tell.

On an amusing note, I have been reliably informed that a prospective legal customer shopping in WH Smiths had taken a QualitySolicitors’ handbook from the new stand only to be stopped by security who assumed they had taken a book without paying and was duly escorted back to the stand to prove the introduction pack was indeed free!

We now have a plethora of businesses offering licences and franchise arrangements to solicitors’ practices. Does this indicate that solicitors are still so poor at maintaining their own independence and marketing their firms, which in some cases have been established for many years?

Two interesting arguments are emerging about these new entrants.

Firstly, it is being suggested that a number of QualitySolicitors firms have bought their territory as a defensive strategy, therefore stopping their competition from buying it.

Secondly a number of firms have been heard to say: “We are in this for the long haul – it’s early days.” This is being interpreted as them saying “we are not generating any work”.

Lawyers often seem to grasp at straws and spend a large sum of money thinking this is the latest bandwagon and they must jump on it in case they get left behind!

We originally saw The Legal Alliance and QualitySolicitors enter the market with the promise of work and a variety of other entrants have come and gone. Blakemores’ Lawyers2you is the latest franchise offering with a proven method of lead conversion – an interesting twist.

Building a significant local brand yourself

With the fees being asked for some of these new brand entrants, I am convinced that a solicitors’ practice can build a significant local brand themselves – and could generate ten times the amount of additional turnover for what they are spending on their licence fee.

Surprisingly it’s not that difficult if a growth strategy is agreed, but most firms fall down on the implementation of such a plan. However, looking for magic formulae to respond to the changes facing the profession is not the solution.

How much more franchise/licensing opportunism can the market stand? I suspect we will see many more examples over the coming years until the new legal landscape is clearer.

But what about the local law firm’s own brand?

Not everyone shops at Waitrose, just as not everyone shops at Aldi – both brands carry a loyal customer following. If we stick to this analogy, then it is likely that clients will still wish to purchase legal services from their local solicitor. The key difference is the level of service that law firms offer to their clients – following the John Lewis shopping experience model should be a lesson to all law firms that wish to maintain and grow their client base.

Significant consolidation

We have seen large numbers of law firms buying into the online “do it yourself” service – however, we have also seen many fail because they do not know how to market their web-based offer and deliver traffic to their website or sites. Some early adopters of the online service invested heavily into website and document assembly software, but have sold only a miniscule number of online documents.

Did these firms analyse their clients and customers to identify who might purchase legal documents online? Did the service offering reach its audience?

I suspect that the answer is likely to be ‘no’ in both cases.

There will doubtlessly be numerous brands entering the market in the coming years and the brand of ‘solicitor’ needs to be raised, demonstrating that the qualifications, the compliance and the professional indemnity insurance undertaken by solicitors differentiates the solicitor brand from that of other “legal service providers”.

We will probably see significant change over the next five years with some winners and definitely some losers. There will probably be new high street brands offering legal services and I suspect these will already be household names.

If we follow the American legal market – which I suspect we will – we will see a significant growth in the numbers of sole trader, limited company, niche providers. The statistics are fascinating: of the 465,000 legal practices in the US, over 80% are sole practitioners. The remainder will be much larger regional and national “businesses” offering a variety of reserved and unreserved legal services.

Among the current crop of high street firms, there will likely be significant consolidation and with the current professional indemnity season well underway there will probably be many more closures and firms entering the assigned risks pool.

Take your time

I would urge practices to consider carefully their strengths and niche services, and correct any imbalance existing due to dysfunctional partners.

Structuring the practice with a dynamic website and utilising search engine optimisation can generate significant new business enquiries. Services should be packaged and bundled and attract a national audience.

Many law firms already spend a large part of their budget on marketing activities, which normally means advertising in some form or another. The numbers of leads that are wasted beggars belief as many firms will not invest in the right people with the correct training and coaching to convert these expensive leads into new instructions. Many leads do not even receive a return phone call – what a sad indictment of the profession.

The winners will not be the firms who grasp straws with both hands but those who take the time to understand their market and their clients and invest in themselves

Being the first brand to market does not guarantee success and those practices who think they have to join one of these new offerings in the hope of a creating an exit strategy should not hold their breath!

The 360 Legal Group provides a dedicated business consultancy service to UK lawyers and has some 700 law firms as members. Viv is also a leading consultant to law firms on the topics of management, practice development, marketing and business strategy. For information on entering the upcoming 360 Legal Group Awards, click here

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One Response to “Charity shops beware?”

  1. I have always failed to see how the franchise model will be successful, other than for the franchisor who picks up the license fee from enough poorly run law firms who lack an understanding of modern business. Whenever I need an accountant, web developer or whatever other service provider, I go to the one I know best and who is also recommended the most by other people, whether online, offline or both. A franchised offering has quite an inauthentic, ‘corporate’ brand in age when more and more people are connecting directly with each other, particularly through social media.

  2. Jonathan Lea on September 16th, 2011 at 1:42 pm

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