A new not-for-profit personal injury marketing collective with 20 law firms stumping up £600,000 each to create a £12m budget is set to go live shortly in a bid to disrupt the market.
The collective has been put together with well-known legal digital marketing agency mmadigital, whose chief executive said it aimed to allow the firms to generate high-quality leads from TV and online advertising without having to pay “expensive fees to major claims management companies”.
Citing confidentiality, Dez Derry would not name the 18 “well-known mid-sized” firms that have signed up so far, and said the collective would work under several brands, one of which he identified as ‘Should I claim compensation?’.
The benefit for mmadigital, he explained, was that it would deliver the digital marketing for the collective. The process of producing TV adverts has also begun in conjunction with “a media partner that specialises in the personal injury market”.
Mr Derry said the collective – which is following the not-for-profit model of InjuryLawyers4U – “is perfectly timed with upcoming government changes, meaning firms wishing to stay in the personal injury sector will need to find a more cost-effective route to market”.
He continued: “Our marketing strategy will see us take significant market share from claims management companies, making it difficult for them to produce leads for their panel firms at the current prices. This difficulty will only increase once the full details of the government changes are announced…
“Profit margins in PI are being squeezed and law firms need a marketing resource which provides value for money in a consistent and compliant manner, at a cost which is reasonable and not greedy.”
The market is still waiting for the Ministry of Justice consultation on raising the small claims limit for PI to £5,000, and stop claims for general damages in ‘minor’ whiplash cases.
The consultation had been expected before Easter, but it may now be published next month in the short period after the local elections and before the government goes back into lockdown – or purdah – ahead of the EU referendum.
Research last year by leading marketing collective First4Lawyers found that claimant lawyers spent a record £208,000 a day advertising personal injury and clinical negligence services in 2014.
The analysis of spending of around 500 law firms and claims management companies between 2010 and 2014 found that the sector has invested £267m in marketing over that time.
It has been on a sharp upward curve, going from £27m in 2010 to £76m in 2014, an increase of 182%. This equated last year to £208,000 per day or £2.41 per second.