Book review: Winning legal business from medium-sized companies

Book review: Winning legal business from medium-sized companies

Silvia Hodges' Winning Legal Business from Medium-Sized Companies  is based on her Ph.D thesis at Nottingham Law School.  Most legal marketing books are based on anecdotes and experience.  This one is based on the type of systematic research evidence that lawyers love.  (I do too.)   

Hodges' central finding was that medium-sized companies care most about predicting and controlling legal costs.  While law firms often like to sell the value of customized solutions, these clients aren't buying it.  They are quite content with standardized and packaged solutions, and are willing to sacrifice some sophistication as long as it saves them time and money. 

The key reason medium-sized companies are different from their larger competitors is that their decision makers are different.  In Fortune 500 firms, the buyer of legal services worries about justifying and defending her decisions to her manager or her board.  This leads to a conservative mentality that favors hiring law firms based on reputation, so that the decision maker will not be blamed if anything goes wrong.  As they say in the computer business, "No one ever got fired for hiring IBM."  

In contrast, in medium-sized companies the legal decision maker is likely to be the CEO or an entrepreneur who reports only to himself.  They don't care about buying the safe brand.  They care about solving a problem for the lowest possible cost.

When clients in Hodges' study talked about their ideal lawyer, they used words like flexible, fast, efficient, effective, results-oriented, honest, and sincere; "in brief, having the same qualities they pride themselves on" (p. 72).

Hodges' interviews led to some specific advice for lawyers who are marketing to medium-sized clients, including:

  • Be pragmatic, flexible and down-to-earth, so you will be perceived as speaking the client's language.
  • Try to get satisfied clients to recommend you to new prospects.  Word-of-mouth is especially powerful in this group.
  • Avoid legalese.  Newsletters should be written in a "pragmatic, journalistic style" (p. 71), and summaries of legal analysis should be in plain English.
  • Repay loyalty by offering discounts.  "Law firms charging for every detail are strongly disliked" (p. 71).
  • Be prepared to offer alternative arrangements such as fixed fees and caps in order to meet client demands for predictability and cost consciousness.
  • When clients need a recommendation of a lawyer in another jurisdiction or country, be very careful to recommend only lawyers you are sure of.  Decisions may be made quickly based on your word-of-mouth recommendation, and if there is a problem later, you will be held accountable.

I trust these findings more than what I read in most marketing books, because they were based on systematic research. It brought me back to my academic days on dissertation committees. 

Hodges focused on "medium-sized" companies (those companies with fewer than 250 employees and annual revenues below $70 million) because they represent the "economic 'bread and butter', for many law firms"  (p. v).  

Her conclusions were based on interviews with 34 buyers and providers of legal services in the European Union.  She used "snowball sampling", in which each participant named others to talk to.  The questions focused on how medium-sized companies buy legal services, and whether marketing approaches should differ from those used with larger clients.

I must admit, some of the conclusions made me wonder about the limits of an academic research approach in a profession that is changing rapidly.  It can take years to conduct research with academic rigor, and report the results.  But what happens to your conclusions if the world changes while you are writing your thesis?

But when I change hats and evaluate this from my current perspective as a legal marketer, I have absolutely no doubt that the trends that Hodges studied in European firms a few years ago apply to many US firms today. 

In my judgment, Hodges' advice against traditional marketing approaches - including the view that many events, sponsorships and advertising campaigns waste money - applies not just with medium-sized clients but also to many large clients.

True, there is still a market for "bet the company" matters, where clients are not very concerned with price.  But that market is shrinking, and the market for efficiency is going up.  When the Wall Street Journal starts publishing articles about how companies like Toyota, Sun Microsystems, GlaxoSmithKline, and eBay are using reverse auctions  to drive down legal prices, you know that efficiency matters.

So if I managed a law firm, I wouldn't care whether my target clients were medium, large, or small.  I'd build my marketing around providing more value.

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