In PwC’s annual Law Firms survey one of the key trends highlighted among mid to large size firms is the appetite for continued development of sector expertise to differentiate firms in their increasingly competitive chosen markets and to satisfy ever more demanding clients.
Sector-focused marketing has been at the centre of many law firms’ development strategies for more than 10 years and while many have created the structures required and are seeing the benefits, most have failed to deliver on the promise.
Why is this?
The key failure seems to be a lack of depth to the approach. We have witnessed the following common mistakes in law firms of all shapes and sizes:
More sectors than you can shake a stick at
Law firms tend to create too many sector groups because they fear going public on where their real experience is, plus they want to be all things to all people. There are usually legacy reasons for this: “We were good in this area once”; or post-merger, nobody wants to omit a sector for fear of upsetting someone; or the view that “Your last project is your new sector specialism”, so it gets added to CV profiles and the myth is perpetuated. But rather than being impressed, clients and targets can be suspicious of a sector for every SIC code, and see this as a smokescreen. Those firms that have the confidence to admit that they are not experts in everything and who put effort into a few key sectors stand a greater chance of getting noticed and having useful conversations with potential clients. From a practical point of view, lawyers can make more headway by getting under the skin of a few carefully selected sectors rather than trying to keep on top of a dozen. I’ve seen a tough stance on chosen sectors and group membership work well at a smallish firm of accountants that previously had a sector group list of 20. They realised that something had to change. They looked at billings, pipeline and opportunities in the market. They were able to identify where their core strengths were (and weren’t), and really whittle this list of sectors down. They even identified one or two sectors that they didn’t even know they were strong in!
Sectors that lack definition
A clear sign that firms lack real understanding of a sector is when groupings are too broad and contain clients with few synergies – eg “manufacturing”. A lack of commonality colours everything. Seminars, PR and bulletins will all miss the mark as they are not sufficiently tailored to the company’s needs and interests. Clients and targets don’t understand what your firm is offering and think you must be speaking to someone else.
Lawyers often believe that handling an acquisition or litigation claim within a sector automatically confers in-depth knowledge of that sector. With legal expertise taken as a given, clients need their lawyers to add value through an understanding of the context and competitive environment in which they operate. Lawyers who are perceived as genuine sector experts share common characteristics: they will act for a number of similar clients, be active in that sector’s professional/trade associations, regularly read and write focused articles, be seen as thought leaders and invited to speak at industry events and be sought out for their insight by the trade press. This activity all combines to give them an awareness of the wider commercial opportunities and challenges presented by the sector and an external profile to match.
Dysfunctional group structures
There is a tendency for some lawyers to hang on to the coat tails of a successful sector group, whilst not bringing much to the table themself. And the collaborative nature of most partnerships means that sector group leaders are often loathe to speak out and exclude those who lack the relevant insight – or commitment. But how are clients benefiting from the endless internal meetings – chances are, they aren’t. And what are the tangible outputs? The best sector groups are those that have four or five interested and committed members, who together offer breadth across all relevant practice areas. Aspiring sector group members know exactly what is expected of them and each has a defined role. Key criteria for membership should include:
- Recent work (recent being the key word)
- Active involvement in external networking groups and industry bodies
- Relationships with intermediaries who have a similar focus
- Willingness to write blogs, speak at events, and contribute to meetings
- Willingness to keep up-to-date technically and share knowledge with peers.
One issue is who is responsible for keeping lawyers up-to-date. Is it the role of marketing or research or knowledge management? All have a role to play in helping but some lawyers expect information to be fed to them and are not so keen on taking time out to build their own knowledge. If this is the case, it warrants their exclusion from the sector group. The group should be able to identify issues and challenges that those in the sector are facing now or will be soon. It should have clear objectives, a set agenda and, above all, a strong chair that leads by example. To be avoided is a monthly meeting where nobody has anything to say and no progress has been made. Eventually, everyone will just lose interest.
Lack of a cutting-edge approach
Even firms who have lawyers who live and breathe a sector stand to miss out if they don’t move quickly enough. Too many firms will still spend weeks or months carefully drafting and re-drafting a 4-page sector newsletter, whereas research among sector clients shows that they prefer ‘little and often’ to in-depth and delayed. If you can get all these elements right, then sector focused marketing is a powerful way of identifying target clients, defining your offering and differentiating yourself in a crowded marketplace.