The Legal Marketplace Branding Roundtable

Branding: Is it the legal marketplace buzzword for the twenty-first century or is there really something to all of this? On October 19^th Law Journal Newsletters Marketing The Law Firm hosted a Roundtable in its offices in Philadelphia. We decided to give branding its due by bringing together a panel of experts: Burkey Belser is President and Creative Director of Greenfield Belser Ltd. with offices in Washington, DC and Boston; Dr. Mark Greene is the Managing Director of The Brand Research Company with offices in Washington, DC and Boston; Douglas C. Kramer is the Chief Marketing Officer of Drinker Biddle & Reath LLP, Philadelphia; and Edward M. Schechter is the Chief Marketing Officer of Duane Morris LLP, Philadelphia. What appears below is entire transcript of the Roundtable. An edited version appears in the November print copy of the Newsletter.

–Elizabeth Anne 'Betiayn' Tursi, Editor-in-Chief, Marketing The Law Firm.

Tursi: Through the use of branding law firms are attempting to differentiate themselves with some success. However, the scope of a law firm's services no matter how distinctive is that of being a professional services organization with either a general practice or a specialized boutique practice. What is the strategy for developing the branding of specific practice areas within the environment of a general practice large law firm and how can those practice areas be differentiated from other areas of the firm without 'going to war' within the partnership as it relates to one practice area being successfully branded over another?

Kramer: It's interesting to look at how the big four and management consulting firms have chosen to go to market. It's not through their service lines or substantive practice groups but predominantly by industry. Law firms, on the other hand, typically go to market by practice group and it seems to me this is worth questioning. At Drinker, we've historically marketed through our practice groups but we're starting to more aggressively take an industry approach where it makes sense, because we have some very deep experience in a handful of industries. It all goes to the point of 'know your buyer' in trying to differentiate yourself in some meaningful way.

Belser: Law firm marketing is really an adolescent industry. Some practice areas are naturally focused on industries like real estate or transportation. Others, like corporate or litigation, require that the firm focus the practice on an industry. But all our research shows again and again that people come to law firms wearing their industry hat. They want to know what you know about their industry. But law firms have not organized themselves around industries. They drop back to the practice area format. But if you look at the table of contents of any law firm brochure over the last 20 years, you'll see a mix of industry and practice areas. For example, the tax practice is followed by telecommunications. I find it hard to imagine selling criminal defense on an industry basis except perhaps in the financial industry. But labor and employment can be industry-specific, although I think the jury is out on how a large firm can make money focused solely on labor and employment. What's the ideal? Create a 3-D matrix where practice areas overlay industries. Sell practice areas to industry strengths.

Tursi: There's an interesting statistic that comes out of the annual law firm media performance report which Levick Communications and PR Newswire just put out. The discussion in this report focuses on law firms and media hits. One of the firms mentioned here was Weil Gotshal & Manges. It has continued to brand itself as a general practice firm but where is the cream rising to? It's rising to their bankruptcy practice. Most of their media hits have been in the area of their high profile engagements that they've had including Enron, Worldcom, etc. This comes back to our question about the branding of a particular practice area and how it impacts the other areas of the firm.

Belser: I would say that's not a branding effort; that's a reputation. In other words, a brand is something that you decide you're going to control ' the message you deliver to the audience versus what the audience learns about you from independent sources There's nothing Weil can change, or frankly would want to change with Enron, Worldcom and Global Crossing in their pocket. Right now, they're minting money.

Tursi: I just want to read from this report something that is interesting: 'For three of the four examples, specifically, practice group brands dominated the media spectrum. This was especially true for Weil Gotshal as 776 of its 1,913 hits in 2002 related to the firm's stellar bankruptcy practice. True the economy was down last year, and bankruptcy was a hot topic. Yet as a firm, Weil Gotshal has a broad practice with highly respected corporate and transactional, as well litigation groups. Talk to the reporters, and they nevertheless think bankruptcy when they think Weil Gotshal.'

Belser: Well, once again, the question is to what extent is that a purposeful effort on Weil Gotshal's part and to what extent is it just an issue of reputation. They are trying very hard to broaden their perception in the marketplace. The last two annual reports that we produced for Weil for example, focused almost entirely on corporate transactions. They are really making a concerted effort to expand the buyers' perception of the firm.

Tursi: Since we're conducting this conference here in Philadelphia and two of our panelists are Chief Marketing Officers from large Philadelphia firms, I'd like to mention that this report has an entire section on firms in the Philadelphia area. The Report discusses an interesting branding issue and that is Philadelphia firms positioning themselves as global. They use as examples in this report Morgan Lewis & Bockius and Dechert We're not getting off the topic here, but it's interesting to see the concept of taking a firm like Dechert and Morgan Lewis & Bockius and their push to move from having a national to a global presence.

Schechter: Clearly the trend toward law firms is to grow either by acquisition of the smaller or medium size firms or in terms of attracting a number of laterals in different markets. That's created some major dynamics in the marketplace. I think that both Dechert and Morgan Lewis & Bockius are clearly looking to do that on a broad basis. What we've chosen to do within the market is establish a national presence within the footprint that we have in the U.S. and internationally through our London office. Our attorneys have the ability through their connections and/or industry and practice specialty knowledge to market themselves on a much broader basis around the world. I think there are a few firms who are going to be able to pull it off. I don't think it will grow beyond that.

Kramer: Does having an office or two overseas, or for that matter even being in a strategic alliance with an overseas firm, enable you to position yourself as competing effectively with the New York or Chicago-based global firms? Drinker, for example, has nine offices coast-to-coast; does a fair volume of international work, particularly in IP; and is in an active, ongoing strategic alliance focused on IP with the Glasgow, Scotland-based Murgitroyd & Company. But no, we don't yet have the presence to compete for global work with Baker & McKenzie or Coudert, or Morgan Lewis for that matter, although we certainly compete with Morgan in a number of areas. For purposes of positioning, I characterize Drinker as an early-stage national law firm. For the vast majority of our 155 years, there were no aspirations to be anything but a local or regional player of the highest quality. Our brand equity grew in Philadelphia and the Mid-Atlantic region so that we enjoyed healthy name recognition among our target audiences but west of the Mississippi no one ever heard of us. But that was OK. However, our aspirations changed, and we undertook some noteworthy mergers and acquisitions in the past five years which have given us a national presence. The branding challenge is to put our name on lawyers' and prospective clients' radar screens in the markets we've recently entered and in new markets we're considering, and to change the way we've historically positioned ourselves. I think a lot of firms are facing this sort of challenge. But even though we do global work, we're not going to attempt through smoke and mirrors to position ourselves as a global powerhouse.

Tursi: Just to circle back on the practice groups. Certainly the global firms (the truly global firms, and there's a lot of discussion with these Magic Circle firms, the international firms and national firms who are now international firms) are expanding their practice groups. Do any of you think that these practice groups (the boutique type, like the bankruptcy practices and the intellectual property practices) become more popular within the firm and therefore, the branding becomes more significant or do you think you have to spread the wealth on the branding and make sure that you get a lot of the branding done through all the practice areas that permeate the firm. In other words, you just don't take a specific practice area and say, you know what, through lateral acquisition we want to become global in this practice area whether it be mergers and acquisitions, corporate or litigation, and we're going to brand that to the detriment of some of our other practices.

Schechter: You brought up something that Berkey was saying, and that was that law firms are just beginning to understand matrix-kinds of environments. You've got to look at it through the eyes of the client, not through the structure of the law firm. And just to add another dimension to it, law firms don't have anywhere near the marketing budgets. There's not enough investment to own anything. The dollars are just not there. And it's not just by adding another zero. There are many factors in terms of the ability to expect the kind of brand recognition, name recognition or reputation in a marketplace. As an industry, we need to recognize a need for greater marketing investment. Let alone it being strategically, focused, targeted and well executed and measured. These are things that the product firms and the accounting/consulting firms have made commitments to doing.

Belser: Just to build on what Ed said. Law firms struggle to answer how they can differentiate practice groups. The answers are often interesting but they are almost never based on market research.

Schechter: When it comes to market research, the legal industry is not very progressive. Law firms do not understand its value. Attorneys have a tendency to want to hop on to whatever is out there and grab what it is at the present moment. I think it takes very strong CMOs within law firms and others like Berkey and Mark to say 'Wait a minute this may only be today.' But let's face it, they've done this traditionally for years and years and years. Law firms as an industry are at the point of starting to recognize these are things we need to be doing. You have the early adaptors and the slackers. There are definitely early-adapting law firms with their managing partners committed like we have at Duane Morris. Many of today's CMOs and Marketing Directors have insight and knowledge and/or experience from outside. They have been able to get to that level of sophistication and know how to reach to outside resources like a Berkey to further this kind of insight or knowledge. You know it's buy or build in terms of that knowledge base and some managing partners are acquiring it through their CMOs that they're hiring or they're building it by using outside consultants. But the point is this, the change is already happening within the legal industry. The challenge is getting there early and doing as well and learning from each other to the degree that it is appropriate and possible. I think it is very helpful. I hate reinventing the wheel. So the degree to which we can learn from outside or inside the industry like, even having this kind of discussion, I think is critical. We should not forget that law firms are very successful businesses.

Belser: It's also because of themselves. But some firms are doing a smarter job than others. To say 'I think I need a New York office' or 'I think I need a San Francisco office' without any research on the potential success of the office is foolish. Research will tell you not only whether there was an opportunity in that particular environment, but also who you should hire away from a firm already successful in that marketplace. That's the only way a corporation would enter a marketplace. But it means building on what's gone before. For the lawyer as marketer, it means our firm will not be the first to market. Marketing demands lawyers run counter to their training. In addition, marketing demands that lawyers talk about their work which also runs counter to their legal training, which holds client confidence and discretion paramount. So the two most important demands of marketing run counter to the entire industry's training and culture. This always makes me much more sympathetic to the challenge of marketing law firms, and more appreciative of the firms that have had the courage to take the lead.

Tursi: The fact is that the law business is a lot more competitive. In the past, it was all about referral business and people did a tremendous amount of business that way and it was very effective. I think with the advent of globalization, the growth is coming from acquisition; it's coming from lateral hires with a the book of business that people are either bringing with them or through the acquisition of a whole group of partners as opposed to the coming through the ranks. The challenge has been how do you cross market more effectively with both those attorneys who came through the ranks and those who arrived through lateral acquisition. And of course, we all know that it is easier to get business from existing clients than to go out and mine new opportunities. So you have the conundrum of having people who grew up at the firm either inheriting the business in a particular practice area or actually going out and getting it and then you have the addition of lateral attorneys who have specific practices and may or may not be willing to cross market themselves or their practice.

Kramer: Drinker is one of those classic old-line firms where for years and years we relied on a small group of very effective rainmakers. But of course the industry has changed so that as marketers we're constantly challenged with broadening that circle of partners with rainmaking, or business development, skills. And as a firm grows the 'internal communications for purposes of cross-selling challenge' also, obviously, grows. At Drinker we've only recently rolled out an intranet and we're working to optimize it as an internal communications tool. And working to communicate the value proposition of the portal to each and every attorney firmwide, so that beyond having the technical capability to navigate through the content, our attorneys will understand what's in it for them. Hopefully part of that will be a deeper understanding of practice group developments beyond their own groups.

Tursi: Speaking of that, there has been a move toward having mini marketing departments within practice development areas. Some ten years ago, I actually did this by dividing up the specific practice areas, at least the strongest ones within a firm, and actually creating subdivisions of the main marketing department so that they could concentrate on the various practice areas that they were responsible for. I'd like to hear from all of you on the viability of this type of marketing.

Schechter: We have moved to a program that has a couple of different elements to it. First, there's geographic coverage. We have three areas in the U.S. that were set up for marketing. In each region, we have two senior kinds of people: a marketing manager and a business developer. Those people are responsible for: 1) offices and 2) half-a-dozen practices and four industries. The goal is, just like clients, people like to do business with people who they know. We're setting up relationships between these marketing and business development managers and the partners that they would deal with on a regular basis. Those become, if you will, internal client executives to a marketing support team. So all of the communications, PR, CRM, direct marketing, graphic design becomes like an in-house agency to each of those people. We've been at it for just about a year. We've had two business developers in place for a year. They are JDs as well as seasoned sales people. Their focus has been on coaching the partners on existing clients and on identifying client teams. Each have a handful of teams with whom they work. The partners have very much embraced it. They didn't have anyone to go to who could really help them with 'Hey, I'm going to this meeting with a client' I'm not really sure what the best approach to this is.' The business developers help the partners do things they aren't comfortable in doing, which in turn helps move the sales process along.

Kramer: Would you have had a harder sell internally if your business developers had been non-lawyers?

Schechter: I wouldn't have done it ' because the answer is 'yes'. I aggressively pursued all three business developers that we have. I felt initially that until the culture could touch and feel and see the benefits of these people and know what to expect from them, they wouldn't give them the time of day if they were not a JD.

Tursi: Well we could have a entire conversation on this topic but at this point we will take a short break.

Tursi: (Dr. Mark Greene has just joined the panel) I think we should have Dr. Greene regale us with the statistics and give his opinion on the branding of the global firm.

Greene: There is not a global firm. We were on the verge of something like it back when we were afraid that the accounting firms were going to seriously be players in the legal landscape. But when that fell apart, the pressure was off. There are certainly many multinational firms, arguably a handful of truly international firms. There are those who will make an argument, which I'm not quite with, for Clifford Chance and maybe one or two others having a real global perspective, but compared to the work I do in the corporate world with people like GE, law firms do not have the unity of corporate global vision or a global approach. That is not at all to say a one-size-fits-all American imposition is the way of doing business worldwide, but a real global corporate culture adapts and adjusts to each area within which the firm works. There are a couple of massively multinational firms that I've worked with that characterize themselves as global, but talk about herding cats; they are very disjointed in the way they do business country to country; and unfortunately as likely to refer work outside their firm as inside their firm when it gets out of their immediate purview because of issues of trust and compensation and things of that ilk. It's not likely to change until the pressure is put on by some kind of outside stimulus, maybe the Magic Circle firms getting back in gear and doing a better job of globalization or maybe some other threat that we can't even see today, the way the accounting firms were a threat a few years ago, there may be some movement toward globalization. But without some kind of outside pressure I don't see it happening any time soon.

Tursi: Are there firms that are perceived as more global than others?

Greene: Oh, I think on a scale of zero to ten there are certainly some that are at zero and some that are at three or four, but is somebody at eight or nine, I don't think so. Most of the corporate counsel that we talk with see a couple of the Magic Circle firms as more effective to represent them across the board than others, but in all the focus groups we do continuously with corporate counsel from major corporations, I've never heard anyone express a level of comfort that the same law firm can effectively represent them in a major corporate transaction in Japan as can in Germany or Mexico for example.

Schechter: What about the partners, if you will, of multi-practice firms where the concept is not a branded firm doing it all, but a firm whose capability is to get the transaction done where that partner has had the sole relationship with the client?

Greene: I've certainly heard of instances where corporations have been more satisfied with these referrals, if you will, that come out of those sorts of arrangements than a massively multinational firm, and while they may have some of the responsibility, they don't seem to feel the accountability as if it was their own firm, and when you have that loose affiliation arrangement they don't have the same control over 'you will meet this deadline, this is crucial to our success, you will get this done.' So it can be a well vetted and relatively dependable network of referrals but it still isn't as effectively multinational as it could be if, say, a massive German conglomerate corporation decides to set up operations in Brazil that is going to need real estate and tax and M&A and employment law services. I haven't heard yet of one of those affiliations that everybody from the home law firm back in Frankfort is going to be completely comfortable with all the levels of competence and accountability out there in the field; particularly accountability.

Schechter: And that's the issue: Accountability and ownership of the engagement. I know we have to do things outside where we are relying on others. We just have to make sure that we own it. And that takes on all kinds of challenges in and of itself. But that goes back to what we talked about earlier, which is that you as the law firm, the relationship manager has to own the relationship and the business across all the different practices.

Tursi: And I think too, that the culture being what it is in a lot of law firms where they keep bringing lateral groups in diminishes that to some extent. I've seen law firms that have traditional strong practices in one area and they bring in lateral groups and are not able to integrate them into what was traditionally a great practice. They've decided to expand these practices, take on lateral groups, and then there is no synergy. The branding suffers, everything across the board suffers until they develop synergistic business development practices and sometimes they don't.

Kramer: As we said before, most people ask what the firm can do for them, but it's not what the firm can do for you but what you can do for the firm. It's not up here where most of the branding gets done, it's done by the individual. There's plenty going on at the individual level.

Schechter: Here's how we do it at our firm. At the tip of the pyramid are the firm-wide marketing practice development activities; in the middle are the office-wide activities; and at its base are the individual activities. There are three faces to the pyramid. One is practice which has been traditional; another is industry. The third face is firm-wide, office and individual. And it's kind of how those things come together that often shows how effective individuals, geographic offices and the firm can be perceived in a local marketplace. (Click here for a full-page graphic of the pyramid.)

Belser: We created a significant campaign for a Big 5 accounting firm. We created a nationwide program for the legal industry but it could equally have been healthcare or any other of their industry foci. We brought all the partners in the practice together. We talked about how we were going to roll out the campaign. Once people got back to their individual offices, they continued to sell the way that they had always sold because they knew that method was successful. The culture change, even in a firm that was as focused and as marketing-driven as this accounting firm found it really difficult to force change among its members.

Tursi: Well, you have to have change agents and strong leadership behind the change agents who know what to do and how to move the agenda forward.

Schechter: That's the thing that made the difference for me as far as moving into the industry and moving to Duane, Morris. Clearly Sheldon Bonovitz, the firm's Chairman, was totally committed to two elements: marketing as an investment and marketing as a change agent. Anyone coming in wouldn't have been able to do it if you didn't have that kind of commitment at the top.

Greene: Tomorrow I'm going to be going through one of GE's Six Sigma courses on marketing and it's a perfect contrast to what Burkey just described. The people who are anointed as the future leadership of the GE business make their pilgrimages to the appointed place where they hear the gospel according to the senior leadership of GE and they disburse back to the hinter lands remembering what they heard: 'This is, by God, the way we're going to do it, and you can cooperate or you've got x amount of time to find another job.' And that's just the way it is with GE ' a top down culture. When there's a mandate like Six Sigma it's not a question of 'Gee, will it work in our office' It's a question of 'How do we make this work most effectively' because you do or you're gone.

Belser: However, a critical structural difference is 'corporation' versus 'partnership.' You don't have that level of control in a typical law firm partnership. But today, leadership is demanding more accountability from their partners and associates as well.

Tursi: I was about to say that. I'm doing a study on partnerships and how they have changed over the years. It used to be a covenant that you made and it was considered unbreakable. But that covenant concept seems to be on the wane. And actually, this is very funny, but I actually have a Rabbi that I'm working with on this study who speaks to law firms and talks about the concept of creating a covenant community within a partnership versus what partnerships are today ' a loosely held confederacy of people brought together for the purpose of making money.

Greene: That's exactly the point that I was going to make before our break. From this survey that we've been doing of the firms that have not succeeded over the last few years; there are the ones that have fallen apart for a variety of reasons. And one early theme that we're definitely picking up is a lack of spiritual commitment, if you will, to the partnership. They don't feel this obligation that when they became an associate, they were going to spend their life there and make a commitment to the institution. But rather the sentiment seems to be 'What's in it for me and if this firm isn't working out hey, I've got this great practice group and I can leave and do just as well over here.' The loyalties that might have been there 20 years ago, just are not there anymore.

Tursi: That also goes back to partnerships and the basic concept of their brand and diluting their brand. And in doing my research I'm finding that the opposite of a covenant community within a partnership is the Janus culture where the partners will say to each other 'Do as I do' and then go off and do something entirely different and not even include the 'do as I do' group. Then we take the covenant community concept and show how everyone can be on the same page, and if you want to brand yourself that way as a true partnership, then what will follow will be stronger practice areas; people all rowing in the same direction that want the same things for the law firm; and the commitment to the law firm's very existence.

Greene: Now that requires some of the same things that global success requires, such as shared values; not just the most I can get for me, but a respect for a common acceptance of the value of a certain level of ethics or a certain quality of life that permeates an entire worldwide network with a shared value system. Now you can start to trust these people and believe that they are going to work as a team. But as long as it's just a bunch of disconnected offices that happen to have some shared ownership, I don't see how real globalization can ever happen.

Schechter: I think we have a propensity to continually have an insider's view. But it's much more important to the success of law firms to be looking at it through the client's eyes. And it's not just the client's eyes; it's the prospect's eyes ' the ones who don't know us at all. And what do they know of us ' very little if anything. And it's all the client satisfaction surveys that are not being done and it's all the questions that are not being asked. The importance of that is not for its own sake; it's to provide the highest quality value integrated service to the client.

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Belser: I think it is our responsibility as marketing leaders to demand that we understand how we're perceived by both our clients and our perspective clients

Greene: I don't think there's a bigger proponent of client surveys and client feedback than I am. But I do think that you can have a successful global brand and really be a global organization without it if what you've got is in such demand and you've got the shared values. I think McKinsey is an example. They work the same way pretty much globally. They are a fairly global corporation. They have shared values. If they have a brand, it's a consistent brand. People all think pretty much the same thing about McKinsey and it works, because they happen to have a product that is not in short supply and is very price elastic. So you can have a successful global company without that customer centricity or market centricity, but I think it's an astounding anomaly when it happens and in the legal industry you've got to be in touch with your markets and clients to get there.

Tursi: In a global firm are there industry-specific obstacles that are in the way that are unique to the legal profession?

Greene: Well, partnership, I think, is going to obstruct it greatly, but beyond that I think it's doable. I think there's enough fear to have some really serious top-down management.

Kramer: Mark talked about McKinsey's shared values. Law firms like ours that have grown quickly over the recent past, face the issue of integration of cultures. Part of the due diligence process in lateral hiring or making an acquisition is determining cultural compatibility. So you bring people on board and hope for the best. But at what point do you stop and do a reality check to determine if there really is consensus around a set of core values? At Drinker we've attempted to define our core values, define what it means to be an attorney practicing here. Part of the marketing department's current mission is to develop a long-term branding and positioning strategy, and it seems to me that consensus around core values is a necessary precursor to converting staff members at all levels into brand champions.

Belser: Maybe I could jump in and mention something I was going to talk about earlier. We keep going back to the internal focus because internal obstacles are a drag on achieving external success. We're talking about culture change and culture shifts. Some firms distribute their values internally'Orrick is one; Baker & Hostetler is another. I run into it all the time; very thoroughly thought out mission and value statements sent to everybody all the way down to the receptionist. When values are shared, culture shifts can occur.

Greene: That's right. And it's a changed attitude. It's not just sent to the lawyers and partners. It's sent to associates and staff and everybody understands what the goals are.

Schechter: In doing that, they also have to look at the growth and where the growth is coming from. Is it coming from the book of business brought by the lateral hires or through the acquisition of a whole group of partners as opposed to the growth from within? Regarding the growth from within, the challenge has been how do you cross market more effectively. There are a lot of components to this including expanding the number of engagements; building on the existing relationships; and developing other relationships within existing clients. It's a lot more effective building relationships with existing clients for more business than it is through a new business opportunity.

Kramer: I guess my overall reaction to what I'm hearing is that maybe we're not giving enough credit to where we've come over the past 10 or 15 years. There is certainly a larger percentage now of law firms that are cross-selling more effectively, branding more effectively and marketing more effectively than they were a decade ago. I think the level of expertise in various marketing departments has increased; there is a growing recognition among firm leadership that marketing needs to be more than a tactical activity, it needs to be a strategic asset. The fact that there are so many more CMOs and senior level marketers today than there were a decade ago is evidence of that recognition. So the art and science of law firm marketing, and branding in particular, continues to evolve, but we can and should feel good that progress is being made.