Survival of fittest as strong firms grow stronger and weak firms weaker, says survey
Pressure: firms facing squeeze on fees
Strong law firms are getting stronger while the weak are getting weaker as traditional sources of legal work dry up, a new survey seen exclusively by Legal Futures has concluded.
The National Solicitors Selling Survey also found that more than half of the 103 firms surveyed saw alternative business structures as a threat, with just a quarter viewing them as an opportunity.
The survey – conducted by the Selling for Solicitors consortium – found “an increasing division emerging between the winners and losers”.
It explained: “The UK legal profession stands to create an even more polarised two-tier culture as those that respond creatively and dynamically to increase competition and regulatory liberalisation prosper, while those maintaining outdated sales and marketing techniques wither.”
Although the majority of firms felt they were better than average at developing new business, the survey found “less cause for optimism” than in the same poll conducted last year, with more pressure on pricing and firms finding it harder to get clients to pay their bills.
The survey found indications that solicitors are using a wider range of pricing models – with time banking (where clients pre-purchase a block of hours) becoming noticeably more popular – as well as a greater spread of marketing methods.
While there was no clear pattern of what works best, “increasing numbers of firms are moving marketing decision-making into the hands of specialist individuals, reflecting a more commercial approach”, the survey observed.
At the same time, this move will be to “the detriment of an overall culture of business development”, the researchers warned, as the survey found only a small number of firms place responsibility on all employees to carry out business development.
“These results suggest that firms are relying on ‘rainmakers’ and not encouraging a culture of business development,” they wrote. “Whilst leadership commitment is important, this approach will be unsustainable in the long term, particularly for smaller firms.”
Similar to another recent poll, the survey found a big increase in the use of telephone marketing, with 63% of firms signed up to it this year, compared to 34% in 2010 as respondents find it becoming more effective marketing method. However, it is still regarded overall as one of the least effective ways of winning new clients, with a quarter reporting that it produced no benefit at all.
Client and third-party referrals continue to dominate as the main methods of generating new work, although there was evidence that solicitors could do more to cross-sell services to clients.
“Ultimately, law is becoming more of a business than a profession,” the report concluded. “The survey shows a notable increase in firms in the last 12 months that are acknowledging this. However, their responses to the changes are inconsistent and the co-ordination and focus within firms is highly variable.”
The Selling for Solicitors consortium is made up of sales training business A&P Training, pricing advisers Inon Consulting, business psychologists Thompson Dunn and online survey company Clarity Surveys.
Tags: ABS, Alternative business structures, marketing
Leave a comment
* Denotes required field