In nature, birds have developed the most incredible features and behaviour to impress
a receptive mate – take for example the extravagant plumage of birds-of-paradise or the magical courtship dance of the Western grebe. All that fluttering is aimed at bringing one key message across: choose me, for I am the strongest, most beautiful and fittest of my kind.
The process of evolutionary change that has yielded such wonders is often boosted by environmental stress, which increases the value of genetic variation and successful adaptation strategies. Though less exotic than the world of our feathered friends, the legal sector is also a setting where the raw power of this evolutionary process is at work.The financial crisis has added to the environmental stress of law firms. The result is that courtship rituals to attract in-house counsel are being spiced up by a maturing marketing and communications function that is altering the way relationships are built and managed. It has become an important element in the ultimate success of a law firm.
Overcoming the reluctance to communicate professionally
Successful relationships are at the heart of every successful legal practice. Yet, lawyers – often distracted by legal professional privilege – have often been reluctant to accept support from communication professionals in the management of their client relationships. In this article I argue that times have changed and that the marketing and communications function in law firms is here to stay.
The legal sector is now in fact recruiting communication professionals on both sides of the fence. Business law firms and in-house legal departments of large companies and financial institutions are both, rather counter-intuitively, developing their ability to communicate, educate and influence their (internal) clients. This trend reflects the shifting balance between in-house and external legal counsel and reveals interesting developments in the legal sector in the face of unprecedented change.
On the private practice side, firms have been developing a marketing and communications function for some time now. This trend originated in the large Anglo-Saxon firms, which emulated the marketing initiatives of other professional services organisations, such as consulting and accounting firms. With mixed success, this function has more recently also been adopted by medium-sized and local business law firms that have been professionalising their business support services.
Firms that embraced the marketing and communication function initially looked at basic processes such as developing marketing collateral and contact databases, but gradually this function took on more strategic aspects such as branding, client relationship management, market research and pricing.
Many law firms have also struggled to de-monopolise the key relationships of their traditional rainmakers, and have turned to communication professionals to build up brand equity that ties clients to the firm rather than to a particular lawyer.
Pro-active reputation management and public relations, both at the level of the individual lawyer and of the firm, have also climbed up the agenda and are increasingly the focus of considerable efforts and investments.The recent financial crisis, which led to stiffened competition and forced law firms to find new growth opportunities and develop new client development initiatives, has bolstered the already maturing function of marketing, communications and business development in law firms.
Despite crisis, firms hire more BDM’s and marketing staff
London-based recruitment consultancy Ambition recently reported that law firms have responded to the crisis – apart from through redundancies, hiring freezes and other cost-cutting exercises – by hiring extra business development managers, client relationship specialists and other marketing support staff (a 54% rise over the past 12 months) in order to combat drastically falling revenues, thereby boosting job opportunities and pay levels for communication professionals.
At the same time, in-house legal departments in the big corporations have started to recruit their own communication experts. The reasons behind this trend can be found in the changing position of in-house lawyers. As legal risk management has increasingly become a strategic issue for large corporations, they have gained clout and attention with the business leaders and executives they serve.
But these chief executives and members of the board are not interested in the technicalities of legal risks, but in strategic advice that will help them to create shareholder value and better manage the systemic risks of a business model or policy. They want their in-house legal counsel to play a much more proactive role, and to strike a better balance between their defensive duties in protecting the company and their new role of a business facilitator and strategic adviser.
They have the greatest difficulties in providing this kind of concise, “board-proof”, strategically relevant advice and only a few rise above the legal jargon and lengthy arguments. The successful business lawyer of today needs to be much better commercially geared, able to immerse himself in the clients’ corporate culture and priorities. Although many firms claim to employ a business-oriented approach or provide commercially grounded advice, it is clear that not all their lawyers can walk the walk.
Legal counsel: from “Cinderella” to strategic advisor
In a recent article on the changing role of in-house counsel, FT’s Michael Peel provides convincing evidence that in-house legal counsel have transformed themselves from “the Cinderellas of the boardroom” to strategic advisors with influence at the top of the business. Indeed, successful in-house lawyers have decidedly left behind their traditional scruffy image of backroom worker and have become, next to their “legal” tasks, increasingly focused on strategic and organisational objectives, often occupying important management positions within their companies.
Another consequence of a stronger position of in-house legal counsel is increased confidence in their dealings with and selection of external legal counsel. In recent years, law firms have been forced to engage in elaborate procurement processes and now need to produce complex, sophisticated proposals pitched to win new business and stay on companies’ panel of privileged law firms.
Beauty contests will become the norm
These requests for proposals (RPFs) or “beauty contests” have become the new norm and require law firms to dedicate considerable resources in their preparation. Until recently, law firms did not have the right human resources and business processes in place to deal with this new demand.
Law firm partners, who used to propose services (and fees) to their clients over the phone or in a simple letter, are now obliged to rely on the marketing department to successfully respond to these RPFs. This in turn is giving the marketing and communication teams in law firms a more strategic function, providing advice on issues such as pricing and project management.
If anything, the proliferation of the marketing and communications function in the legal sector sheds light on how law firms can add value to the services they provide to their clients. Law firms that understand the importance of a strategically positioned marketing and communications function can vastly improve their competitiveness by:
- recognising the new role of in-house counsel and their non-legal agenda and priorities, and by supporting them in the consolidation of their newly gained strategic position;
- giving them the advice and tools to better influence and educate the business leaders, not only on risk management, but also on the larger and long-term strategic issues of the company;
- nurturing commercially geared lawyers that understand the priorities of their clients and the business context in which they operate, thus gaining the status of trusted strategic adviser;
- cultivating a veritable client-oriented attitude, aligning the culture of the law firm with the marketing speak.
The future of lawyers: new pressures. Social media, blogging as game changers
As far back as 1996, Prof. Richard Süskind famously put a big question mark next to the future of lawyers. In his more recent publications and interviews he predicts new pressures on the legal marketplace and explains how these are imposing great change on the world of legal services. He urges law firms to ask themselves what elements of their current workload could be undertaken more quickly, more cheaply and more efficiently. One only needs to look at the impact of new technologies on relationship management: the rise of social media, legal blogging and desktop-to-desktop video conferencing are just a few examples of potential game changers, too often bluntly ignored by the sector.
Time will tell which strategies will cope best with this rapidly changing landscape. But if natural selection is any guiding principle, the legal sector can look forward to an exciting feather-ruffling future.
Steven Ongenaet, November 2010