| Overview
Over the past decade, Australian law firms
have invested significantly in building
and positioning their brands. Industry estimates
range between 2-4% of firm revenue spent
on branding.
But little, if any, formal research has
been conducted on internal perceptions
of how firms view branding, or their approach
to managing and measuring their brand investment
(especially amongst senior decision-maker
segments such as Managing Partners/CEOs).
Accordingly, during July-September 2004,
Davis & Associates and Galt Advisory
conducted qualitative research involving
13 firms - representing more than 50% of
Australia’s top 20 law firms (in terms
of size & revenue). In all instances,
in-depth interviews were conducted at the
Managing Partner or CEO level.
The research task was to gain an understanding
of the following key issues: the perceived
importance of brand to a firm – more
specifically, the perceived benefits of
a differentiated brand; the measures / metrics
used to evaluate the effectiveness of brand
strategies; the areas / groups within a
firm responsible for implementing brand
strategy and setting the brand’s overall
strategic direction; and the degree to which
brand was integrated with key strategic
and operational processes.
Key findings from the study (Brand
Perceptions 2004 – Law Firm CEO &
Managing Partner Perceptions of their Brand
Environment) are summarised below:
Key Findings
Importance of Brand and Brand
Differentiation:
Almost all respondents believe that brand
is a major contributor to a firm’s
overall market positioning, is a strong
unifying force internally and helps attract
quality people. As one research participant
noted:
“A brand sends the message about
who you are and how you are perceived by
the market and clients. Internally, it sets
the agenda and creates a common purpose
behind strategy and it assists with recruitment”.
In terms of brand differentiation, research
participants identified four key benefits:
- Style & reputation (i.e. clearly
defined “personality” and
the feel-good
effect it creates for employees and clients)
- Superior business development &
client relationship opportunities
- Enhanced ability to attract and retain
people
- A clearer positioning platform based
on tangible attributes.
The issue of brand differentiation goes
to the very heart of law firm market positioning
and reputation, and raises this fundamental
question:
Is it the individual lawyer, or the firm,
that is the basis of differentiation in
the marketplace?
If one subscribes to the “individual
lawyer” school of thinking (as some
industry commentators do), then potentially
no firm can build a differentiated brand
- because as individual lawyers (and their
teams) are ‘poached’ by other
firms, set up their own practices or retire,
the differentiation - in effect - moves
with them, leaving the firm without a distinctive
or sustainable market positioning.
As a counter to this viewpoint, is the
emergence in the last decade of the “firm
brand”; firms that certainly have
individual stars, but who have also successfully
built a discernible market positioning.
That is, when you “buy” these
firms you know you are “buying”
a particular type of service, lawyer, culture
and expertise that transcends any one individual.
Firms in this category include, Gilbert
+ Tobin, Minter Ellison and Arnold Bloch
Leibler.
Brand Strategy
Sound brand strategy is an
integral component of sound corporate strategy
- irrespective of industry sector, geography
or organisation size.
Of the firms surveyed, only 38% demonstrated
a clear linkage between corporate and brand
strategies, and only 15% had a formally
documented brand strategy in place. As one
executive commented:
“It (the brand strategy) does
not exist on a piece of paper, but we act
in ways conscious of the brand”.
Moreover, most firm’s brand strategies
are – in essence – brand communications
and identity strategies (e.g. PR, sponsorships,
identity and visual guidelines).
The apparent lack of process surrounding
brand strategy, we believe, seriously hinders
efforts to build meaningful brand differentiation
and to link brand-building activity to broader
business strategy, especially contribution
to key business objectives.
Brand Measurement
The research revealed that 30%
of the firms surveyed undertook no form
of brand measurement at all. Of the firms
who did measure their brand, none of them
conducted their own firm-specific brand
measurement, but instead used a mix of:
- Client satisfaction / client service
reviews (where some questions on perceptions
about competitor’s positioning and
service attributes were bolted on to an
existing survey tool)
- Third party external quantitative brand
research amongst the legal sector
- Informal “measurement”
(e.g. word of mouth, anecdotal feedback,
employee feedback etc).
The heavy reliance on externally-owned
and driven quantitative research
to evaluate and monitor the brand, highlights
a serious deficiency. It fosters an “outside-in"
approach (i.e. external perceptions driving
brand strategy), rather than an “inside-out”
approach where brand differentiators and
brand attributes are developed internally
first, integrated into key strategic and
operational processes and consistently supported
by the firm’s culture and infrastructure.
In other words, the result of a deliberate
and sustainable brand strategy.
Moreover, the lack of customised brand
research commissioned by firms means that
robust, relevant internal measurement processes
and frameworks are simply not being developed.
An obvious consequence is that the effectiveness
of a firm’s brand strategy is not
being measured from an ROI perspective (in
particular, the brand’s overall contribution
to business development activity).
Brand Management & Direction
The research looked at the critical
questions of who sets the brand’s
strategic direction and who manages implementation?
We found that responsibility for setting
strategic direction falls to a variety of
decision-making groups within firms, as
shown below:
What is revealing is that none of the firms
included the Human Resources function (typically
the custodian of the firm’s internal
brand) in strategy setting and only one
firm involved Marketing.
Similarly, responsibility for implementation
was largely left to the firm’s leadership
(CEO/Managing Partners, Board). Only one
firm had established a permanent forum specifically
focused on brand management.
In essence, brand strategy is being determined
by the partnership – comprised of
legal practitioners with potentially limited
experience in strategic brand issues. The
central issue this raises is whether law
firms can realistically continue to manage
their brands without specialist expertise
and a clear brand governance framework.
Alignment with Operational
& Strategic Processes
Across the sample, the strategic
and operational processes considered most
strongly aligned with brand are: product
& service quality, CRM and human resources.
This finding is in keeping with the core
reasons underlying perceived importance
of brand (i.e. business development &
client relationship opportunities, attracting
and keeping quality people).
The processes considered as being least
aligned are: innovation, corporate responsibility
and advertising. (see chart below).
These findings suggest that internal processes
focused on innovation are potentially overly
technical and lacking appropriate consideration
of brand positioning and brand attributes;
that corporate responsibility is still evolving
from its pro bono origins into a wider market
positioning tool; and advertising is not
sufficiently strongly aligned with brand
positioning and personality.
Key Implications:
Given that much brand research
in the legal sector is based on an “outside-in”
approach, it is not surprising that:
- Brand – while ‘conceptually’
regarded as important - is generally not
backed-up by appropriate brand process,
infrastructure and systems (especially
measurement).
- As only a small percentage of firms
have formalised and documented brand strategies
linked to the wider corporate strategy,
many of the benefits flowing from brand
differentiation are either underexploited
and/or not well-understood.
- The lack of clarity around brand management
and strategy, suggests that investment
in brand and it’s relative contribution
to firm profitability and business development
activity, is similarly not well-understood.
This study demonstrates that it is time
for law firms to apply the same rigour and
discipline to brand they have so successfully
applied to other areas of their business.
For information on how to purchase a full
copy of the Brand Perceptions 2004 Report
email us at: info@davismarketing.com.au
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