"What Differentiates Our Firm Is..." [Nothing]

A very interesting article about how marketing works in the legal industry from Adam Smith Esq's blog - http://www.adamsmithesq.com/blog

A reader (partner in an AmLaw 10 firm) writes:
"Most businesses know their leading indicators of sales. For example, if the company increases the number of sales calls in January, there will be more sales in April. "Has anyone analyzed empirically what the leading indicators of sales are for AmLaw 200 law firms? Do the indicators include ads in the trade press? Fancy dinners with potential clients? Rounds of golf with potential clients? Publishing articles in legal or trade journals? Giving speeches? Winning jury trials? Closing big deals? "It strikes me that law firms have very little idea of what business development activities they really want to encourage among their lawyers and so take a scattershot approach to the effort. "Has anyone thought intelligently about this?"
This is a fascinating question. So, after a relative drought of pieces on law firm marketing, we have our second in one week.
My immediate response is: Most firms are probably clueless about this. (And if someone out there really is doing empirically-driven marketing, please raise your hand; I would be delighted to give you the recognition you deserve [unless you would deem it be revealing a competitive advantage, in which case we can talk not-for-attribution].)
All the activities the reader cites contribute to "name recognition" for a law firm, but the actual "sale" (read: engagements to handle a piece of litigation, a corporate transaction, a tax problem, etc.) only occurs when the client has the precise need, i.e., is at the point of pain. No one in the history of the world ever woke up and said, "What I need today is to buy myself a really good contract...."
The marketing of all sorts of other goods and services can often generate induced demand, simply by providing information about the features and benefits of a product. For example, a really good campaign could get me thinking about moving up to a Nikon digital SLR when my film Nikon still has many miles left on it, but you would never achieve anything remotely similar with a law firm's campaign.
To be sure, it's possible (although I would wager very uncommon) for a corporate lawyer to generate demand for, say, a review of corporate governance structures and policies at a client; but in general matrimonial lawyers don't generate divorces, white-collar crime lawyers don't generate securities fraud, and tax lawyers don't generate IRS audits. In this sense, then, all the marketing in the world can't generate a "sale" for a law firm. First, the client has to have the need.
But, as the marketers in the audience are starting to protest, can't the right marketing campaign achieve the holy grail of "differentiation?"
I'm here to tell you I think not.
Let me step back: Your firm can be "differentiated" in clients' eyes—and remember it's only the eyes of the clients that matter, not those of you and your partners—only if it stands for one consistent value, commonly thought of or referred to as its "brand." [ Note: Do not confuse "name recognition" for a "brand"—Martha Stewart has had very high name recognition for quite some time, but the value of the Martha Stewart brand has swung from the heights to the abyss and now maybe back.]
A "brand," in turn, is simply a promise: A promise of consistency, of a certain set of nearly immutable qualities that remains the same each time you come back. So every can of Coke is alike, every tube of Crest satisfies whatever it is in you that you like about Crest, and every BMW occupies the high-performance rung in its vehicle class.
But even though one of the most recognizable names in law-firm land is Skadden, every client interaction with a Skadden lawyer (or Clifford Chance, or Jacoby & Myers, for that matter) is different from every other client interaction with other Skadden lawyers, or that same Skadden lawyer on a different matter or a different day of the week.
In other words, law firms, even the mighty Skadden, cannot "promise" consistency. Thus they can't really have a brand that stands for anything in particular, and so they can't be meaningfully differentiated from their competitive set.
Understand what I'm not saying: I'm not saying that firms can't have reputations for being particularly expert in specific areas. Weil-Gotshal may be the go-to firm for big-ticket bankruptcies, Schulte-Roth for private equity, Sullivan & Cromwell for commercial bank regulation, etc.
That still doesn't mean the aura of those practice groups rubs off on completely unrelated practice groups within those exact same firms. In other words, if you're Fidelity or Vanguard and will never have anything to do with private equity, does anything still make Schulte-Roth distinctive to you? I think not.
But looking at these examples reveals something else: What clients want when they're in the market for a law firm is the capability that speaks most directly to their legal need du jour.
The only reason the articles, golf outings, fancy dinners, speaking engagements, etc., have any value is because they all amount to opportunities to show the client (you can't tell them—that's an exercise in futility if not self-inflicted humiliation) that you understand their business and the legal environment in which they function. In other words, they are efforts to demonstrate that what you offer could be, at the right time and place, germane to the client's legal needs.
The trenchant and always-reliable Bruce Marcus has written about this, more than once. The heart of the matter is this:
"The truth is, you probably can’t specifically articulate what you think you know to be better about you or your firm, because without tangible evidence, there’s no way to be credible. You can’t say, “We do better briefs and write better contracts,” or “We do better audits,” or “We’re better litigators.” "You can’t say these things because they’re outrageous and self-serving statements. Because you can’t prove it, in most cases. Because the Canons of Ethics won’t let you. And for most clients, because the real difference between one professional and another is not what you think it is – it’s what the client thinks it is."
Essentially, the goal of all the marketing tools we started with—the articles, the golf games and dinners, the speeches—is to create opportunities, through action not assertion, to demonstrate to the client that your firm stands ready to be truly useful when legal needs arise.
Marketing, in other words, gets you a seat at the consideration table. But you and your partners still have to "close the sale" in person.
And there won't be any "differentiation" or "branding" pixie dust in the room with you.Posted by Bruce at March 9, 2006 12:25 PM TrackBack