Is Google the answer to the referral fee ban?

Stephen Moore, owner of Legal Futures Associate Moore Legal Technology discusses how small law firms willing to get serious could hit the jackpot in personal injury ban through clever use of the Internet

Who needs CMCs when you have SEO?

In April next year, the legal sector will face another huge shake-up as the ban on personal injury referrals comes into force. According to the Solicitors Regulation Authority (SRA), personal Injury work is worth an estimated £1.8bn a year. A quarter of all solicitor firms in England and Wales carry out personal injury work, which, in 2011 accounted for 7% of the total estimated market value. The Law Society of England and Wales most recent annual report lists general personal injury work as among the most competitive areas alongside the likes of conveyancing, crime and wills and probate.

What differentiates personal injury from these other sectors, of course, is the existence of claims management companies (CMCs). Such companies have demonstrated an ability and willingness to canvass for business on a scale unimaginable to most high street practitioners: television and radio campaigns, acres of ad space, celebrity endorsements and billboard campaigns.

In so doing they have played a fundamental role in the growth of the personal injury market and, leaving accusations of ambulance chasing and questionable practice to one side, they have, in many cases, shown how to capitalise on an emerging market. They have also woven themselves into the tapestry of a personal injury claim from initial contact through to legal expenses insurance, medical report provision and rehabilitation.

Over the past few years CMCs have established themselves as being almost essential to any practice operating in the personal injury sector but the ongoing relationship between law firm and CMC is deeply uncertain due to the personal injury referral ban.

According to the SRA it will be the “smaller end of the market that suffers as a result of changes in the market” and this is particularly relevant in the north west of England where “solicitors’ firms are heavily dependent on personal injury work” and where firms with five partners or fewer are passed personal injury leads from a large number of smaller CMCs.

Of course, CMCs have demonstrated acute business acumen to date and with their own existence threatened by the ban one will no doubt expect them to find a way around referral fees being classed as such. As the SRA has acknowledged: “The difficulty will be in establishing whether the payment is for the referral, particularly where the introducer is providing services to the solicitor, such as marketing, vetting of claims or other claims management activities.”

The SRA also confirmed just a few weeks ago that joint ventures between solicitors and CMCs as alternative business structures will not be subject to this ban. As a result, CMCs will be able to take in income what they would have received in referral fees.

However, the view is that this type of relationship will only be viable for larger law firms and larger CMCs and undoubtedly the CMC industry now faces a challenging future. On the flip side, this ban will open up a tranche of the market to smaller law firms willing to get serious about client acquisition. Today the cheapest route to market is the Internet and as Internet usage grows to unprecedented levels and Google focuses its efforts on rewarding established local business which have robust online presences with prominence in search, there could be significant opportunities for smaller firms to stamp their own mark, removing the need for referral fees.

Based on our experience, here are our top tips for ensuring that, in an online sense at least, your firm is ready for the referral fee ban:

  1. Have somebody with a demonstrable expertise in search engine optimisation (SEO) look over your site to ensure that the right flags are there for the search engines.
  2. Be realistic about budget – as well as being competitive offline, personal injury is competitive online.
  3. Focus initially on your local market with a view to widening out thereafter on the basis of success.
  4. Commit to content – the objective is to rank well for as many keyphrases as possible and this will only happen as a result of increased content
  5. Make sure your content is engaging, relevant and likely to be shared. This will create back links for your site and improve trust and therefore rankings in search.
  6. Aim to have you content published elsewhere – see number 5 for reason.

Having an online presence is more than simply another shop front. It’s an indicator of trust and an opportunity for you to get across your firm’s values and expertise to potential clients who may otherwise never find you. It’s a platform for you to interact with potential and existing clients, to showcase your achievements and accreditations and to draw in business.

The marketing tools available to large firms, CMCs and the new hybrid businesses are likely to be unavailable to you. Internet marketing is affordable, scalable, offers a much better return on investment and leverages one of the most significant changes facing the legal industry to your advantage.


    Readers Comments

  • Anon says:

    Stephen, the fact is that the Goverment is about to decimate a full sector of legal services and you recommend using google to replace CMCs or work sources.How can they when it’s 25 pound a click for a lot of key words and the competition on the web is so fierce that you would simply not be able to compete unless you had deep pockets even with your own SEO staff

  • Thanks for your comment. I’m not suggesting using Google to replace CMCs – there’s a question mark at the end of the title:). What I am suggesting is that there are lots of opportunities for smaller/medium size firms to pick up lot of business online as a result of robust local internet marketing campaigns – we know, we do it with a lot of firms throughout the UK.

  • I think the tone of the article is for use of SEO as opposed to PPC so that by using the kind of content that post Penguin Google requires you get high organic listings that are free. I am going to linkedin thread to continue discussion.

  • The referral fee ban has the potential effect of diminishing public awareness as it has done it Scotland. The effect of the increase of the arbitration limit will effectively kill off the PI industry leaving niche areas such as medical negligence and high value injuries as the future battle grounds.

    Can SEO help? Yes. Can PPC help? yes. For those niche areas? Yes

    Can SEO or PPC help to keep RTA fee earners and PI lawyers off the dole queue – No. Lets be honest.

  • We have achieved some good results but the PI sector is unusual, the big boys are spending fortunes already. You need to resource seo, get the right people who know the sector and be patient, it will take more than 6 months to gain some traction.

  • Jon says:

    We work with a number of PI firms and have reduced their cost per lead to below £200 through PPC. We also have medical negligent clients and have reduced the cost of an accepted medical negligence claim to below £500. PPC can be a great tool to use for sourcing cases if you have experienced marketeers who are used to the legal sector.

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