BONALLACK & BISHOP - SALISBURY LAWYERS - PRESS RELEASE

July 2006 

Viv Williams Interview (Solicitors Journal)

Law firms should invest at least 3% of their annual turnover in marketing in order to experience between 10-12% growth per annum, says the leading legal business adviser.

With the legal market becoming more and more competitive, there is a perception that some law firms aren't taking the necessary steps to stay profitable in the new environment. How would you respond to this?

I call it the 'ostrich' syndrome. Around half of law firms don't like the idea of change and do not respond to the growing threat of competition. We try and encourage firms to create a culture within their practice and to look exactly at how they spend their money. Many firms still spend a fortune placing an advert in the Yellow Pages and think that constitutes adequate marketing. I always ask them to quantify that cost with the numbers of new clients -invariably they can't tell me.

Do you have trouble persuading lawyers that your techniques should be adopted in their firms?

Law firms should be run as a business and not like many are being run at present. Some firms have over nine months worth of their cash tied up in" lock-up"- a combination of WIP and debtors - you can't run any business like that.

So how should law firms start moving their business in the right direction?

There are five cornerstones in managing any law firm. Firstly, you need to have a clear vision and strategy, then you need to develop a culture within the firm by sharing that vision with the staff. Secondly, you need to address the issue of marketing the business and then look at how you are deploying your resources. Finally, you need to look at the firm's finances. If you can apply business logic to these five areas, a firm is on the path to becoming profitable.

Many lawyers are still blind to the idea of marketing. What is your view on the profession’s current approach?

It is said that law firms should invest three per cent of their annual turnover on marketing in order to experience between 10 and 12 per cent growth per annum. I would voice the opinion that very few firms get anywhere near that figure. Lord Woolf 's report stated that half the High Street practices could disappear over the next ten years and it is these firms that are struggling. Footfall has more or less disappeared and clients are moving to more pro-active firms who focus on delivering "world class service". The average age of a partner in a law firm is 56 years, and many of this generation find it difficult to accept change.

Are any firms being proactive?

Yes, many are and a number are showing excellent results - for example, 800 per cent growth in the last five years! A number are changing their "brand": for example, Smith, Williams and Smith have become 'SWS' and others are even dropping the 'solicitor' heading. It's all about being different – being established for over 100 years and having a brass plaque outside the building are insufficient. By changing the branding some law firms are preparing to offer "wantdriven" not "need-driven" services. Accountants and lawyers are working together to offer their services to small and medium sized entities, alternative business structures are already being loosely formed. Change is already happening.

So what are the first steps that can be taken?

Firms have to become "client-centric", provide world-class service and be proactive. As many as 70 per cent of firms simply don't have an up-to-date database of their clients. They also don't cross sell their services. If a firm is helping a client write a Will, why not get involved in Inheritance Tax Planning also? First and foremost, law firms mustn't be afraid of change, but must embrace it instead. They have got to try and make the services they offer want-driven, as opposed to the traditional need-driven model. The first step to marketing is to use their own clients as a source of referrals. When asked in a client satisfaction survey, 96.4 per cent of clients said they would recommend their lawyer to someone else. However, 99 per cent said they had ever been asked by their Solicitors to do this. Law firms should focus on these aspects to begin with - by taking small steps now.

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