The crucial difference: The role for marketing in the survival of the smaller firm

A lot of marketing features focus on strategies suitable for larger firms looking to expand or internationalise their services. What happens, however, when marketing becomes an essential tool in the fight for survival? Caroline Poynton asks Mark Slade, partner at Fidler & Pepper, for the lowdown on marketing and the smaller firm.

What are your views on the current marketplace for the smaller, high street solicitor?

I think the smaller high street firm is under threat from all sides. Legal-aid work requires a franchise that often involves an increase in administration per job carried out – conversely the fees paid for this type of work are low.

Personal-injury work has all but disappeared from the high street with the emergence of Claims Direct and The Accident Group. Those firms that did not go into that market saw their PI work dwindle to almost nothing. Those that bit the bullet and went in for that sort of work are now paying the price, with insurance companies dragging the cases out and disillusioned clients seeing their cases taking much longer than expected. Because of the failure of those two companies, no-one knows which model is going to succeed in the future and it is a risky market to be getting involved with.

Conveyancing has long been the saviour of the small firm, because even though the rates of pay are similarly poor, the cash flow is good. However, I see even this disappearing as more estate agents are tying in to deals with panels of law firms – they are getting the client to “their” firms before they even have a chance to consider other high street solicitors. After all, it takes a very brave client to resist the advice of the agent who is selling them the house of their dreams.

How well are smaller firms responding to these challenges? Is it a question of survival of the fittest?

Definitely. While some firms are thriving on the changes and opportunities that such challenges bring about, others appear to be just marking the time until they retire, drifting along with no real plans for the future. I cannot see the latter firms surviving much longer – the erosion of the conveyancing market will be the final nail in their coffin as it affects their cash flow. Many of these firms are surviving on the basis of one or two key clients that are keeping them fed with work. Again, this is not an ideal strategy for future growth.

Those firms that have taken steps to adapt to the new changes seem to be flourishing. To compete in any of the marketplaces available to small firms, they are running their departments as efficiently as possible, while providing the best client care they can.

What kind of marketing strategies should high street firms be employing to better sell their services?

I think at the heart of any marketing strategy for small firms should be client care – if the client care is not there then you will lose what market share you gain through particular campaigns, and will be kicked off any panels worth their salt.

Following on from this, quality standards are a good way of showing panel managers that you are operating in a certain way, and will raise your chances of joining such a panel. Once those basics are right then you need to make sure that you are not squandering sales opportunities, such as people phoning for conveyancing quotes, invitations to tender, etc. It is important that these opportunities are treated properly and that the people involved are given appropriate training to allow them to perform at their best.

Can you tell me more about your firm’s marketing strategy? What do you consider to be the most important criteria for effectively selling your services?

Our strategy includes elements of relationship marketing, direct selling and staff and public relations. High levels of client care activates our most effective marketing tool – word of mouth. Our research indicates that 54 per cent of our clients have either come to us through recommendation or have used us before. This year’s marketing plan focuses on reviewing our client-care policy, re-affirming this by structured training throughout the whole firm and measuring results more closely. By refining our approach to client care, selling our services more effectively should naturally occur. Building panel-referral work is also a big part of this.

We are also investing in customer-service training for everyone in the firm this year as a further recognition of the importance of this.

What particular challenges have you faced in recent months and how have you overcome them?

We have grown considerably over the past 18 months (30 to 55 staff members). During that time, a major challenge has been maintaining the culture of the firm. With smaller numbers, it was easier to keep an eye on things, but as we have grown, it is potentially easier for parts of the firm to pull in different directions. To try and counter this, we have made extensive use of the firm’s intranet. We have added an idea-of-the-month scheme (the winner gets £40 in Argos vouchers) and

a monthly-reward scheme where we pay a small bonus to each team, based on their ability to beat certain measurable targets (which cover a wide variety of things and not just fees). We are basically trying to get everyone in the firm to feel it is “their” firm, either by thinking of new ideas or by striving for targets that will help the business.

What role does IT play in the smaller firm and how far can it provide competitive advantage?

For us, IT has made a huge difference. Without full use of IT, we would not be in the strong position we are today. Contrary to popular perception, I would say that where IT is concerned, the smaller firm is at a definite advantage over larger firms, provided they embrace the technology. The cost of acquiring IT has plummeted over the years and has meant that smaller firms can generally get whatever systems they require at a reasonable price. The advantage for the smaller firms comes from their practical use of IT: provided they make sure they are comfortable with the technology, they can try out new ideas in an instant. There are so many features in an IT package that are unused – I have heard that most users use less than five per cent of the facilities offered within Microsoft Word. Smaller firms generally have to get more out of their existing packages because they cannot afford to upgrade. The upside of this is that they are comfortable with those packages, are getting the most out of them, and they have no re-training costs. Larger firms often splash out on bespoke systems, take longer to implement new systems and, as they churn software at a greater rate, have much higher re-training costs.

How does your firm’s culture and image help you to sell your services and how far should firms be using their culture as part of their marketing strategy?

Our firm’s culture is very distinct and forms an essential if intangible element in our marketing strategy. For example, the open-management style enables ideas sharing and team development. This in turn gives the individual more confidence when dealing with clients, so offering them a better service. Client-feedback forms indicate that clients appreciate this. We have tried to project an approachable but professional image. Again, small things add up – from the fresh flowers and childrens’ play areas in the receptions to press releases and hospitality events.

No one thing gives the firm its culture – it is the employees’ consistent and persistent will to improve that combines to create a firm’s unique image.

What challenges do you foresee for the coming year and what steps will you be taking to further your marketing strategy?

The strategy outlined above is aimed at protecting existing markets and forging new ones. Being prepared to look at this challenge from a fresh angle has given us a way forward, one that other like-minded firms are welcome to join us in. We have formed a sister company, FidlerGroup Ltd, offering all the hi-tech benefits we have developed over the years, as a way of working in partnership with other firms and estate agents to secure quality bulk-conveyancing work. Several law firms have joined and are successfully operating as FG members – our challenge is to attract and develop more members. Similarly, we have a new PI-referral arrangement, which we plan to build through direct marketing.

Mark Slade is a partner at Fidler & Pepper. He can be contacted at: mslade@fidler.co.uk.