Yesterday I spoke at a workshop arranged by Gateway Media on the theme of “Combating Tesco Law: Preparing your Brand Presence”.  I tried to explain what the LSA does in about an hour – it was a bit of a rush but no one fell asleep and I hope I got the main points across.  As promised I have loaded my Powerpoint presentation onto Slideshare and you can view it here;

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I’m writing this on the train coming back from the latest Tesco Law workshop run by Lammore Consulting Ltd.  The session was attended by solicitors from a range of firms over the West Midlands and consists of a presentation by me on the Legal Services Act 2007 (aka Tesco Law) and a very stimulating session by Mark Blackmore (from Lammore) on the theory of sales and marketing.

The main concern that most delegates have is that they won’t be able to compete on price with the likes of Tesco, the Co-Op and other retail or banking giants.  Mark’s session, involving a great exercise with four tubes of toothpaste (if you want to know more you’ll have to attend one of the courses), is to demonstrate that price isn’t the only issue that affects consumers.  Indeed, if a price is too low, it can be just as off putting as if too high. The message is clear: lawyers are salesmen and to succeed in the future we will need to recognise and apply the “Single Sales Principle (SSP)”. 

The SSP has three identifiable elements;

1.  Your customer’s “Compelling Need” for a product PLUS
2. A “Credible Solution” from a supplier, PLUS
3. “Perceived Value” as an outcome

EQUALS a sale.

It is, perhaps, easier said than done but clearly has application to the sales of professional services just as much as the sale of a product.  How to implement SSP in one’s own practice?  For most lawyers, the first element isn’t likely to be a problem: most legal services are distress purchases.  The problem, instead, is to promote oneself at the second stage of the equation.  In my view the way forward is to build one’s own reputation – one’s own brand.  How you do that is a career all in itself, but social media certainly gives more people the ability to project themselves and their businesses, which is one reason why I write this blog.

But there is more to it than that.  Even if as a practitioner you can build your brand, demonstrate excellence and provide a quality service, there is (in my view) still one massive piece of jigsaw missing: affordability of legal services, the need to demonstrate the final part of the equation “perceived value”.  Clients want to know how much a piece of work will cost, whereas the solicitor doesn’t want to quote a fixed price unless s/he knows that it will cover all the work.  Therein lies the age-old fundamental problem – how to get beyond hourly rates? Charge a percentage of compensation perhaps?  It can be done in the ET and conveyancers used to charge a percentage based on the value of the house, just like estate agents still do, (and they don’t take on any risk in the transaction, unlike the solicitor).  Increasingly sophisticated IT solutions that provide much routine advice can be one answer: see Tessa Shepperson’s excellent website at Landlord-Law.  She provides an opportunity for both landlords and tenants to become members of her site and access documents and then, if that isn’t sufficient, they can instruct her for specific advice on their situation.

However, that still gets us back to the problem of how you price a potentially open-ended service.  Will Tesco-law be able to resolve that problem?  Or will they just be able to absorb more hits than a law firm?  That’s no better business for them than it is for a traditional law firm. In my experience, from working at a personal injury “factory” style law firm, the bulk provision of legal services doesn’t work for everyone. People don’t shop just on price but on a whole range of factors. Will a small, specialist, law firm that offers a credible solution and perceived value be able to succeed post 2011? Yes, I believe so.

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Two weeks ago I was speaking at a seminar entitled “Competing in a Changing Environment” ¹  on the subject of “Tesco Law” and the implications of Alternative Business Structures on the profession.  One of the delegates, a solicitor, asked what our “union” i.e. the Law Society was doing to promote its members’ interests.  I demonstrated my ignorance by saying I wasn’t aware of any promotional schemes afoot.  Then, as if by magic, as used to be said of Mr Ben (that’s the cartoon shopkeeper not the current Secretary of State for Environment, Food and Rural Affairs, still less his father Tony the scourge of the Labour Party in the 1980s but now national treasure), news comes out that the Law Society is running a promotion to boost the solicitor “brand” starting last Monday and running to the 30th October.  The theme is “Help, I need somebody … but not just anybody”.

The purpose of the campaign is to help solicitors attract new business and retain existing clients by focusing on the “reassurance to be gained by seeking advice from a properly qualified professional”.  The press release describes solicitors’ USP as including the following virtues;

• more expert and reliable than other providers of legal or quasi-legal services
• properly regulated
• excellent value for money

I don’t disagree with any of this and it is just what the profession needs as it copes with a tough recession and, more importantly, tries to adapt to the huge changes that are on the horizon.  In these brand driven days raising the profile of the profession is especially important for smaller law firms without large marketing budgets or the time to devote to PR.  Many practitioners tend to be sceptical of the Law Society and I doubt this campaign will alter that view, but give it some support.

1. “Competing in a Changing Environment” - Lammore Consulting

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In my last post on this topic I argued that the introduction of Alternative Business Structures (ABSs) does not have to entail the destruction of the smaller firms in the legal profession, although it undoubtedly poses a very severe challenge. 

High Street firms without a recognised “brand” of their own haven’t got the financial resources to compete with the massive advertising budgets of the banks and supermarkets.  Firms or, more particularly, individual solicitors themselves, have only their own skills and personality to sell.  Word of mouth recommendation is well recognised as the best form of business development and that will never change.  What will change is that social media will allow firms and individuals to promote themselves beyond the confines of the spoken word of mouth networks.  In particular it is likely that websites will develop which will allow users to rate their solicitor; think TripAdvisor, but for lawyers.  It must only be a matter of time before such a site develops.

Alternatively networks will (and are) appear which act as umbrellas for “quality-checked” firms – we’re seeing that with QualitySolicitors.com, Contact Law (who are ”badging” their service via the Daily Telegraph) and TakeLegalAdvice.com to name three.

It will then be very important for lawyers to control their online identities and to promote themselves in the virtual world.  We all know how “googling” has become a verb and not just a proper noun.  This trend will continue as the general population becomes more tech-savvy.  All practitioners will require a digital media strategy (Tesco law will have one).  Anyone reading this blog probably has a pretty good idea of web 2.0 and social media but, for the sake of completeness, this is what I think a digital media strategy is;

1.  A good website, properly designed, utilising SEO techniques.
2. A blog – probably a personal rather than a corporate one displaying wisdom and personality (like this one really!)
3. Use of Facebook et al.  Facebook has “Pages” that allow businesses to promote themselves.  It also has about 245 million users worldwide.  Facebook has overtaken MySpace in importance.
4. Twitter!  Play with it for a while and you will see its uses.
5.  Linked-In et al – of most use to recruitment consultants at the moment but that will change.

None of this will replace good old-fashioned networking in the real world or will surpass the joys of an old-fashioned lengthy lunch (some of us still do it and I’m always open to invitations) but it will complement it. 

As usual, all comments welcome.

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Last week I gave a talk to solicitors and practice managers at a workshop addressing the issues arising from the Legal Services Act 2007 (“LSA”) and, in particular, what the implications of the so-called “Tesco law” will be for firms.  There was some good discussion between all the delegates and there have also been some interesting comments left on the earlier post I wrote on the subject.

The LSA or, to be more precise, Alternative Business Structures (ABSs) will mean different things to different people, depending upon where you are positioned in the profession.  For instance, the Magic Circle firms will not be at all concerned by the prospect of “Tesco law” offering wills and residential conveyancing as they no longer do that sort of “private client” work. They probably have no need for external injections of capital from non-lawyers either.  They are, however, concerned that other legal markets will remain tightly regulated and will not be able to enter into multidisciplinary partnerships in the US, for example.  Smaller law firms who are not interested in cross-border work may well welcome the opportunities that private equity can provide – perhaps to fund an upgrade of IT systems as one delegate suggested to me.  For firms that are prepared to dilute the partner’s/member’s ownership by allowing in non-lawyers the introduction of ABSs is potentially exciting. The message that came through is that Tesco Law offers opportunities to these sorts of firms.

There was consensus though that for the smaller law firms, based on the high street and relying on “commoditised” legal services (e.g. wills/probate and conveyancing) for their bread and butter, Tesco law is a threat.  All delegates were sure that high street firm of solicitors as we now know them offers a quality service to clients but competing with Tesco law on price grounds alone would be an unwinnable battle.  Many high street practitioners face the future with dread. 

I don’t think this necessarily has to be the case, particularly for practitioners undertaking non-commoditised work (by which I broadly mean family disputes, all litigation apart from lowish-value road traffic accident personal injury claims and anything with any emotional involvement in for the client).  Clients are increasingly price-sensitive but they also want a quality service: the “dial one for wills. Dial two for conveyancing and dial 3 if your ex-partner won’t let you see the kids this weekend” type approach just won’t work for most people. One of the respondents to my earlier post, John Flood suggests this may be too complacent though – what will happen if Trade Unions, who are used to funding personal injury litigation, decide to get involved more directly and either buy into a law firm or set up a new business structure with a Citizens Advice Bureau or Law Centre? I think that is a good point albeit I can’t see that a Trade Union would want to get involved where it couldn’t recover its costs from the losing party.  In other words they may be happy to fund personal injury litigation but not a bitterly fought costly residence/contact dispute between parents. 

Clients  may initially want to adopt a Tesco law solution but they won’t do so again if the service they get is cheap and unimpressive.  Many of the delegates at the workshop made the point, strongly, that the potential clients using Tesco Law in the first place (before getting disillusioned) would represent a huge loss to the profession.  I agree and, in my view solicitors need to be promoting themselves much more pro-actively to compete against this.

 Change is on the way and it doesn’t necessarily have to mean the destruction of the profession.  I will suggest how they can do that without utilising massive financial cost in my next post.  As ever I would welcome your comments on these issues; please feel free to let me know what you think, or email me directly at michaelscutt@dalelangley.co.uk or phone on 0207 464 8433   

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