Standing out from the crowd

Clients have more choice in service providers than ever before, and the market is filled with high quality, highly skilled law firms. So in a world where all law firms basically offer similar services, how do you differentiate yourself from the competition?

In a buyer’s market, the biggest challenge for law firms worldwide is how to beat the competition – by showcasing unique attributes not offered by their competitors. If you can identify these, formulate a differentiation strategy and are not afraid to market the hell out of it, you may have just hit on a winning formula, experts agree.
Some are still trying to stand out in ways that are not relevant to their clients. Being an ‘expert’ is not a differentiating factor, there are only so many experts you can have in the market, nor is being ‘close to the client’ – any law firm that isn’t close to its clients is unlikely to have any.
Iberian law firms, however, have been making great strides in adapting to a market that is demanding more than just legal services. But taking a look at how law firms in other markets, such as the US and Australia, are addressing the issue could provide an insight into how to tailor your approach when trying to distinguish yourselves abroad.

Corporate-style governance
At the top end of the US market, global law firms are trying to differentiate at a ‘global’ level, emulating their clients. “If they can create an identity at this level, as their clients are doing, this will provide a first and important point of differentiation,” says Warren Riddell, Principal of Australia and Hong Kong-based Beaton Capital, with over 25 years advising major international professional service firms on strategy and structure.
Marketplace evidence reveals they are capitalising on their global reach by offering ‘sweetheart’ deals, such as global rebates – combining total revenue, which, when it hits a certain level, triggers discounts or rebates – so as to further extend their global reach, explains Riddell.
The big battle to stand out is among the ‘international’ law firms, whose strength is mainly based on strong relationships with clients back home. Some copy what accounting and consulting firms have tried, switching from being functional lawyers to demonstrating points of absolutely expertise, something usually done by boutique firms.
“Boutiques aim to differentiate through absolute and dedicated specialisation, which is extremely difficult for a global or international firm,” says Riddell, “because that would require a trade-off between scale and absolute expertise”.
Small local US firms are trying to build market share by doing things that others don’t want to do, but are right for the client, says Michael B. Rynowecer, President and Founder of The BTI Consulting Group, with over 30 years of experience in all aspects of client relationships and strategy in professional firms. Choosing expertise over scale makes them able to be more innovative in their approach. This is a reaction they are also seeing in the Australian market, with law firms actively reinvesting in their firms to demonstrate and promote expertise to their clients.
The problem is that law firms, regardless of size, are not generally structured to reinvest profits into furthering differentiation because of the nature of partnership. The question is whether partners are willing to forgo withdrawing profits, says Riddell. “But we are starting to see global law firms recognising that, to ‘invest’ in differentiation, they must ‘reinvest’ their profits back into their firm.”
Some of the more advanced law firms with modern, ‘corporate-style’ governance, usually including external advisers or board members, are more inclined to reinvest profits. Whereas the less progressive ones, populated solely by lawyers and outdated governance structures, probably don’t have that flexibility, adds Riddell. “When we talk about leadership it’s a fundamental concept because we find that strong leadership has a huge impact on the push for differentiation, while compromised leadership is generally ineffectual.”
This leadership point is important, as they are managing the brand and culture for the next generation, who are proving to be much more dynamic and progressive than their seniors, say experts, and by doing so will probably be more successful in competing in the marketplace.

Proving your worth
It used to come down to relationships, and having ‘history’ with a client was enough while lawyers had a fairly small geographic footprint. “But what we are finding is that inertia is no longer enough to sustain a relationship,” says Rynowecer.
 “The legal market is a great example of an almost homogeneous product in a perfect market,” says Riddell. “Because they have been so narrow in their focus, unlike accountants that broadened out, they haven’t got a point of real differentiation and are battling this perpetual requirement to seek differentiation”.
Price is a powerful differentiation tool, if used wisely. “Law firms like to talk about price because it’s easier to talk about rather than how you are going to change your entire work processes,” says Rynowecer. “Clients are convinced they know how to lower rates and they are looking for bigger savings coming from elsewhere. And that’s going changing the way law firms approach things.”
Ultimately pricing will never truly work as a differentiator because there is always someone who will do it cheaper, and that’s not a path to success – that’s desperation and long-term disaster, says Ross Fishman, CEO of Fishman Marketing, a global specialist in marketing and differentiation strategies for law firms and professional services.
The preference, therefore, is to be more expensive, but worth it – and to be able to prove it. A successful track record goes someway to doing that, but what really grabs clients is a focus on innovative and unique attributes that demonstrate the value of what they are paying for.

Built-in intelligence
Providing innovative and creative solutions to problems was a fundamental attribute that was highlighted in a recent Iberian Lawyer ‘In-House Counsel’ study.
Client service tends to be fairly low at the moment, says Rynowecer, which suggests that improving these skills could be a real differentiator. “Its basic ‘blocking and tackling’ – the ability to execute the fundamentals – something our research has shown is surprisingly lacking these days.”
There are also some very interesting uses being made of technology. Some US law firms are putting up sophisticated and robust risk evaluation tools. These mean clients can evaluate and assess their litigation, as well as flexible online diagnostic tools with built-in intelligence – so not simply a PDF checklist, but technology with many variables built-in that differ depending on the information that is fed into it.
Other firms are really making changes in the way they manage work processes with their clients, especially in long-standing relationships. They recognise the need to stop and look at what they are doing and see whether it is all really necessary, says Rynowecer. “These may seem like simple things but they are so out of character in today’s market that they are characterised as innovation.”
These are things that law firms can do relatively easily without reorganising or changing. More importantly, they can start doing them straight away.

Radically adapting to your clients
Until recently, lawyers haven’t felt the need to sell themselves as a product. They struggle to accept that the profession has evolved into a business they need to market to succeed, says Fishman, in the same way as in every other industry. “For many, the concept of marketing is purely showcasing all they can do for clients and selling ‘features’ – ‘let me tell you about me’, rather than ‘let me show you how I am uniquely suited to solve your problem’.”
Law firms have lived in a bubble for so long, where clients came to them, which they are having to radically adapt to understand their clients’ buying habits and needs. “Clients are busy people, and law firms need to fight for their attention along with every other company,” says Fishman. “They want to know if you can solve their problems and make their life easier.”
Websites are usually a first port of call, but the messages can often fail to stand out. “Give added-value to clients? Leaders in the field? The only way you can give this ‘added value’ to the client is with absolute proof of leadership in a chosen area of law,” says Riddell, “not just saying it like everyone else”.
Law firms still like to think that you can’t ‘market’ legal services, and that clients are too smart or sophisticated to be influenced, says Fishman. But they need to follow the lead of every other industry that can gain traction by using clever marketing to change perception.

Market perception
Despite the crucial role of marketing, getting lawyers to embrace it is the biggest stumbling block, says Fishman –“it’s just not in their DNA”.
The problem is that some law firms’ self-perception doesn’t actually match how clients see them. It makes it that much more difficult to differentiate yourself if you are unaware of how you are really seen, adds Rynowecer. “Marketing departments are enthusiastic about client feedback. They take an independent look at how the firm is perceived, so they can change the firm’s message and communicate something that really resonates as unique.”
In the US, there was an initial fear that doing something radically different would damage reputation, and showed desperation and panic to the market because others were not doing it. “Many lawyers felt that it would tell everyone that they are a desperate firm that needs work,” says Fishman.
But then the market saw what happens when it’s done well and that clients did not perceive it as desperation but rather as a welcomed sophistication, and those firms were growing and becoming more successful.

A worldwide strategy
Law firms need to make marketing work in different cultures and markets, and decide that if they aren’t going to compete on price, then they are going to use their marketing to do the competing for them. Law firms want to charge more, not less, say experts. And to do so they must prove that they are worth more than everyone else.
Being a great law firm with great lawyers is just the price of admission to the client beauty parade. Clients need to know what makes you different from other candidates, especially if you are from another jurisdiction.
If you want to enter the Asian, Latin American or US market, for example, you must adapt your message, approach and marketing to that audience. “You cannot effectively market a domestic firm using domestic marketing in the US because it just won’t stand out,” says Fishman. “If you want to compete for attention, you have to do it in a way that stands out for US buyers, or wherever you are looking globally.”
Good marketing must match the firm, the culture, society, and the target clients, say experts. And while the approaches taken in other countries may not be domestically appropriate for Portugal and Spain, they can provide valuable insights into how strategies need to be adapted when targeting foreign clients or jurisdictions.