Anwar: PI lawyers are incredibly resilient
One in four law firms impacted by the whiplash reforms have already exited that market, with more set to follow, according to new research.
At the same time, firms are focused on growing other areas of their personal injury (PI) practices through a combination of factors, from sales and marketing to mergers and acquisitions.
The research by First4Lawyers said the introduction of fixed tariffs for lower-value road traffic accident cases combined with a dramatic drop in the number of claims due to the way the Official Injury Claim (OIC) portal works has made the work unsustainable for many.
Just 19% of firms that previously dealt with it expected to do so in the future, according to a survey carried out for the report, with many predicting that the trend towards volume players handling the majority of claims would continue.
Despite the uncertain outlook, and with more reforms on the horizon, the mood of the market was one of resilience, however, with one in five firms already diversifying into other areas of law.
For its eighth annual white paper, Trust me, I’m a lawyer – Marketing legal services in 2023 – First4Lawyers commissioned IRN Research to interview 100 firms working in PI, some specialist and some with broader practices, and find out how they were looking to achieve growth.
First4Lawyers’ managing director Qamar Anwar said: “Growth may be the economic buzzword of the moment but it’s easier said than done across an economy in turmoil and still recovering from the impact of the pandemic.
“It became an even greater challenge with the introduction of the OIC portal. Some 70% of firms say it went live before it was ready and there are still problems now, evidenced by the low number of people using it without a lawyer.
“With the government seemingly intent on pushing through further reforms, the challenges look set to continue, unfortunately. But if PI lawyers have proven nothing else since the waves of change that have hit them since 1999, it is that they are incredibly resilient.”
Encouragingly, all of the firms surveyed had a growth strategy to equip them for survival and were not planning to sell up or run off their business.
Sales and marketing remained the most popular tactic, with 58% of firms having increased their budget over the last 12 months and 60% expecting to increase it in the year ahead.
Activity was largely focused on websites, content and SEO – namely where they appeared in Google’s rankings – and paid search and display, while there was a drop in more traditional methods such as print advertising.
The majority of firms said they measured return on investment, but 55% said spending decisions were made by management as opposed to a dedicated marketing resource, and fewer than half – 44% – used data analytics to inform their choices.
This suggested that much of the activity may be ad hoc or reactionary and working on a hunch rather than meaningful insight, the white paper said.
Almost half (43%) said they would be most likely to invest in technology to drive growth and 37% planned to build their business through lateral hires.
As many as three in 10 firms are considering a potential merger or acquisition over the next 18 months and half of those are currently in talks about a possible deal or are actively seeking one.
More than half of the firms interviewed believed that M&A activity would only increase in the future, while 28% predicted that insurer-owned alternative business structures would in time become the major players in the market.
Law firms have undoubtedly got better at engaging with prospective and existing clients, the white paper showed, but there was still a long way to go. For example, just 21% of firms prioritised continued investment in their websites and 63% did not have or did not know if they had a mobile-first site.
Just over a third (37%) monitored online reviews, despite increasing numbers of consumers using sites like Trustpilot and ReviewSolicitors to rate their experience.
Mr Anwar added: “The need to keep existing clients happy to prove to prospective clients that you are the lawyers for them has never been stronger. The PI market may be thinning out, but it remains highly competitive and differentiating yourself remains key.
“Similarly, failing to monitor or respond to reviews is missing an open goal. Being proactive both limits any damage from negative reviews and can actually boost your reputation by making you look like a modern, consumer-focused firm that values the views of its clients and is invested in improving their user experience.”
Last year, First4Lawyers set up its own alternative business structure, First4InjuryClaims, to deal solely with road traffic claims.
It announced last week that, despite the group ceasing all marketing activity in relation to such claims, First4InjuryClaims has still received over 4,000 enquiries from people looking for support in making a claim.
Leave a Comment