Legal marketing co-operatives

The Legal Services Act (LSA) will open up the market to more non traditional competitors.  Already access to legal work is increasingly controlled by retailers, insurers, trade unions and membership organisations.  To gain this work, firms that join together as a legal marketing co-operative to provide a consolidated service offering are more likely to seal contracts compared to smaller firms operating alone.

A legal marketing co-operative is where a group of law firms join together and pool marketing resources to achieve an agreed objective.  The goal is related to a marketing outcome, whether it is increased sales direct to consumers or via institutions; bulk purchasing of training and consultancy services; profile raising of a group of specialists; lobbying or providing alternative ways to deliver services.

Types of marketing cooperative 1. One service: firms keep their own names, but operate under an umbrella brand for part or all of their marketing of one service, such as with Injurylawyers4u and the Equity Release Solicitors Alliance.  2. Multiple services: offered to consumers direct or via institutions.  Examples include The Legal Alliance Network and QualitySolicitors.com.  3. Support services purchase: to gain economy of scale to drive down costs, such as with LawNet which places significant professional indemnity business at favourable rates for its members.  4. Local marketing co-operatives: firms join together to encourage clients to buy locally.  Membership often includes other professionals, such as with Banbury Finance Initiative and Nichelaw.net. 8 © Quill Pinpoint, 2010 5.  Virtual co-operatives: usually driven by software companies enabling client firms to gain access to their other institutional clients or to offer document production services on-line for clients direct, such as Epoq’s Mylawyer.co.uk.

There is a risk that the co-operative becomes little more than a ‘lawyer matching’ service for its members.  QualitySolicitors.com founder Craig Holt, reflecting on the first year of the co-operative said, “We were, in effect, operating as a high budget, glorified ‘find a solicitor service’. We lacked the presence to generate real awareness amongst the public.”  The co-operative is becoming more akin to a franchise operation whereby members embrace the full livery of the brand to gain prominence on the High Street.

Advice before joining a marketing co-operative firms will want to consider whether the objectives, culture and service delivery approach taken by the co-operative is compatible and leads to achieving the firm’s own corporate objectives.  Evidence of whether the founders have a track record in achieving their stated goals will also influence a practice.

The expected return on membership investment should be weighed against the potential business loss from existing referrers.  The number of members or investment required needs to be sufficient to make an on-going impact.  Non-renewal of membership can cause a lingering deathblow to a group, as has happened with previous legal co-operatives.

The brand image selected by the cooperative to attract target clients needs to blend with the perception partners want clients to have of their firm.  The livery of QualitySolicitors.com is likely to cause lively debate at partners’ meetings, for firms thinking of embracing it.

Thorough quality checks put in place prior to joining and during membership may be inconvenient, but the risk of ‘guilt by association’ with the acts of a rogue member, would be substantially more troublesome.

How marketing funds are invested needs close analysis. Where broad percentages are given for spend on TV, radio and newspaper advertising, firms will want to be certain it is spent where their target clients are likely to see it.

The distribution of enquiries is a potential conflict area. If enquiries are distributed on a cab-ranking basis, the firm may get a series of poor enquiries.  If there is filtering of clients, the feeling that ‘cherry picking’ is going on can harbour bad feeling.

Whilst legal marketing co-operatives inevitably have pros and cons, it is one approach to counter the onslaught of national brands into the consumer legal services sector and is well worth considering.

Stephanie Dale of Customised Professional Development is author of Business Development Strategies for Partners and Fee Earners (Ark Group) and Profitable Conveyancing (Law Society Publishing). She is a legal marketing consultant and SRA trainer.

Contact her on 01666 505051 or visit www.cpd-uk.co.uk.

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