'Isn't the real threat to lawyers other lawyers rather than Tesco, the AA etc?' is an interesting question posted by James Dunning on the Law Society's Gazette LinkedIn page. Below is my comment in response to the question.
As has been stated by Craig, brands are that very powerful ‘shortcut to help people decide’. Consumers trust many FMCG brands they’re familiar and they purchase them regularly - that’s why they can often be stretched in so many directions. Buying legal services is an irregular, often distress purchase. It is maybe perceived as a more difficult marketing task than consumer goods, but not by any means impossible.
My guess is that 50% of consumers looking for legal advice will be attracted to the services of the new providers, for the reasons that Craig makes clear. Brand awareness in the easily commoditised areas of law will be key to success. That requires ongoing marketing activity that many existing providers have been reluctant to invest in. So those law firms may move into what they perceive to be ‘less competitive areas’ – along with many of their existing competitors…
How may law firms lose clients simply because they have not been in contact with them? Because of not investing say 5% of their turnover on marketing to retain existing business?
Not a mistake the new providers will make - we can be sure of that. As Jon says above, they must see an open gate to the legal services sector – in the areas of law they choose to operate in. A highly diversified existing market (with ‘000s of existing providers and few clear brand/market leaders) will become very competitive, commoditised and potentially as ubiquitous as retail financial services.
But - price isn’t everything, service counts - as does reputation. 85% of consumers choose a solicitor as a result of a recommendation. Monitoring client satisfaction is ignored by far too many law firms; mining their client database likewise, the latter an often underused and yet very significant asset. For the firms that do maximise relationships with their existing clients before the (very) imminent arrival of the new competition they stand an improved chance of survival.
Elsewhere twice as many people now use the internet, rather than Yellow Pages or other local directories, to find a solicitor when compared to 2 years ago. Existing providers can offer online legal services to younger clients those that don’t wish to use traditional service delivery methods. There are IT firms starting to offer these services to high street solicitors – those investing here see what their clients needs will be, not were.
I’ve mentioned before the big question for existing providers is ‘How to leverage the role of the trusted advisor?’ - to engage more regularly with clients and potential clients by providing and delivering services that clients would be happy to purchase from their legal advisers.
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