Don’t spend your money joining a legal brand – Four other things small law firms must do instead

When we established HighStreetLawyer.com we set out to do two things. To create a recognizable consumer brand for legal services and create a network of small local high street solicitor firms. We thought, following the introduction of the Legal Services Act and the liberalisation of the profession that both of these approaches were needed. We were wrong! The consumers of legal services whether private individuals or businesses do not want or need a unified legal brand. Legal services do not need to be provided by household names. The world is not ready for big brand law. What consumers want is good quality advice and assistance delivered locally at transparent prices in a consistent manner with a focus on great customer service.

More small law firms are finding it difficult to get insurance which will result in them going out of business by the end of this year. Other firms are being forced to close due to bad financial planning. Many firms don’t know where their next piece of work is coming from so instead of spending time on marketing to get more work, they cut costs even further making it difficult to service any work if it does come in. Work received from referral companies, if firms even receive any leads, is considered by many firms as low quality and many don’t even bother to return the calls, creating a downward spiral of externally referred work. None of these problems facing small law firms are new. They have just been brought into sharp focus because of the Legal Services Act, liberalization of the market and the changes in regulation and the insurance market.

With big brand law currently dead in the water, small law firms should be focusing on four key areas, to make sure that they are competitive in their local market.

Marketing to existing and potential client base – News of law firm closures and difficulties are filtering through to consumers. You had better remind your clients that your firm is still alive and kicking. Send them a newsletter, connect with them on social media, invite private clients in for a coffee and a free will review or organise a breakfast briefing on employment changes for your business clients. If you are not continuously marketing to your client base, someone else will.

Make sure your training and development is up to date – We all have to do CPD but make sure that you spend your time doing something that is going to add value to your practice. Focus on two areas in the next 12 months that you are going to become an expert on and find a training programme that can help you to achieve it. If you can’t find one, HighStreetLawyer will develop one for you. It’s essential to stay ahead of the game and proving expertise through knowledge is key.

Get the best deal on your outgoings – Cutting costs can only go so far before you have no more costs to cut if you are going to deliver a good quality service. Unfortunately, small law firms have very little buying power when it comes to supplies that they need on a recurring basis, even though most firms are buying the same set of services from a fairly small group of suppliers. Collaboration through a buying club can help save you money. It can even save your client money if the costs are a disbursement that you normally pass on, making you more competitive.

Revise your business plan or if you don’t have one, start one – Banks and insurers used to recommend that their law firm clients have a business plan that deals with business continuity, risk management, succession planning, financial management, business development and sustainability. Now, they are insisting on it. You don’t need a MBA to produce a decent business plan that helps you to highlight the area that your business needs to focus on in the short and medium term and to set some goals for the longer term. As your firm evolves, make sure your plan is up to date and still reflects your realistic aspirations.

Without the need to spend time and resources creating a brand that no one currently needs, we are devoting our attention to helping small law firms develop their own brand through marketing, stay competitive through training and procurement and run a strong business by having a relevant business plan and strategy. Email gary@highstreetlawyer.com to find out more. 

Introducing HighStreetLawyer Workshare

Law firms will survive the changes taking place in the legal profession by tackling the three key drivers for change as identified by Professor Richard Susskind in his latest book "Tomorrow's Lawyers An Introduction to Your Future". These are "the more for less challenge", "liberalisation" and "technology".

More for less - consumers of legal services want their services to be provided cheaper and there will always be someone willing to provide a cheaper service. How can small law firms provide services more efficiently without damaging profit margins? 

Liberalisation - the Legal Services Act has potentially opened up the legal market to new competition, which at first glance assists consumers. Can small law firms compete with the new market entrants? 

Technology - technological advances can come in a variety of guises. It may be consumer facing technology or back office technology.Either way it has to be available in a way that is efficient and drives bottom line benefits to small law firms. In other words, it has to be both affordable and effective. 

We have recently launched HSL Workshare as a response to these issues. HSL Workshare is a collaboration platform for our member firms and other invited users to share referrals with each other. They can also benefit from shared strategy groups and marketing and compliance advice. 

HSL Workshare is ideal for specialist firms looking for a network of larger firms to refer work to their specialist area. It is also suitable for firms looking for lawyers with expertise that they don't themselves have. even small full service firms will benefit from the strategic groups and the chance to network with other like minded individuals.   

We are looking for more users to help us test this platform over the next few months. With no ongoing obligation other than a few minutes of your time to load your profile and check your messages, HSL Workshare is an easy way of getting involved in the HSL brand as it continues to grow. Please contact me gary@highstreetlawyer.com or 02080902454 to arrange a 10 minute demo. 

2013 - A challenge ahead

2012 not only saw the first full year of the Legal Services Act and the launch of a number of new legal service providers but also the implementation of an entirely new compliance regime. 2013 brings the introduction of a ban on referral fees payable by lawyers to the introducers of work. We asked a select number of small law firms to participate in a survey at the end of December and the results have helped us to form our opinion on the challenges that face them for 2013. The survey is still available at http://www.surveymonkey.com/s/RWD77JF

Every firm has by now had to nominate it's COLP and COFA. Such compliance officers will have to deal with Outcomes Focussed Regulations. Where previously a set of hard and fast rules governed the compliance of law firms, partners now have to interpret guidelines and make judgements of their own decisions. It is unsurprising therefore that about 250 firms have not yet nominated their COLP/COFA before the 31 December deadline http://www.legalfutures.co.uk/latest-news/hundreds-delinquent-firms-move-closer-colpcofa-action. In our survey, half of our respondents informed us that they were taking on both the COLP and COFA role.

Each week seems to see the launch of a new marketing initiative for legal services. Google backed US company Rocket Lawyer launched in the final quarter of 2012 and it's rival Legal Zoom is also dipping its toes into the UK legal market. Various comparison sites now exist and there is now of course TV advertising of legal services.

In 2012, more firms joined the Law Society's Conveyancing Quality Scheme and various lenders have now made CQS accreditation a requirement for membership of their panel. Without CQS, firms will simply not be able to act for certain lenders. Over a third of firms we surveyed admitted that they had to turn work away this year as they were not on a certain panel. From April 1 this year, firms without CQS will not be permitted on Santander's panel. Of the firms we surveyed only 40% had received CQS accreditation, although a further 40% intended to apply.

100% of our respondents would consider applying for accreditation of a probate scheme if The Law Society were to introduce one. Although firms are not exactly embracing these schemes there is a reluctant acceptance that to protect their ability to work, firms will have to carefully consider membership of as many schemes as possible.

Small, successful high street firms who wish to remain as such need to use the coming year to capitalise on their strengths and remove the effect of their weaknesses. Ironically, the fundamental strength of being a small law firm is paradoxically also its weakness. Because of their size small law firms have great local knowledge, years of experience often having acted for families or businesses for many years and the potential to give great customer service and be very caring towards their clients. Conversely, their ability to compete in marketing terms with larger organisations is stymied, even ridiculed by their size. With the same compliance regime for every firm, regardless of size, small firms will use up a far higher proportion of potential fee earning time with management and compliance issues. Marketing budgets of small law firms are dwarfed by those of large new market entrants. The only effective way to counter such competition is for smaller firms to take advantage of some kind of collective marketing, deciding first on whether social media, TV or price comparison is the forum to attack.

Of our surveyed firms, almost 70% had a Twitter and a Linked In account. 60% are actively sending enewsletters and approximately 40% are still sending brochures. At this rate, there must be a huge amount of material being sent by small firms to potential customers. How do firms distinguish themselves, especially when a lot of the material is fairly generic?

My prediction for 2013 is that lots of small law firms will find the challenges too much to face and will look for the chance to be taken over or leave the market. Small law firms should focus this year on existing client bases and not blow in the wind trying to attract new clients. Getting to grips with the effect as well as the cost of compliance will also be a great benefit. My hope is that small law firms play to their strengths and realise the great head start that that they have on new market entrants but accept the fact that that reducing cost bases and outsourcing back office functions may be necessary and productive. My new years resolution is to work with the firms that wish to remain strong, profitable and competitive.

Gary Yantin 
Gary Yantin is the founder and Managing Director of HighStreetLawyer.com, the consumer facing legal brand and umbrella group for small high street law firms.