Global Issues Series
Brand purpose in
international law firms the fulcrum of differentiation
Warren Riddell
Partner, Beaton Capital
George Beaton
Executive Chairman, Beaton Research + Consulting
Ben Welsh
Executive Creative Director, M&C Saatchi
February 2015
Fulcrum (n) the point against which a lever is
placed to get a purchase, or on which it turns or
is supported. Origin C17, from fulcire ‘to prop up’.
(COED).
Never has brand purpose been more critical to
the success of globalising law firms, yet for many
the need for brand purpose is dismissed as mere
discretionary marketing cost. And marketing can
be a dirty word.
What we will witness in the coming years – and
you heard it here first – will be an irreversible
differentiation gap developing between those
law firms that demonstrably establish their brand
purpose now – and those that don’t.
The firms that out-compete and pull ahead of the
pack will not be the largest, nor those with the
greatest longevity. The winners in this race will be
those firms with a shockingly clear brand purpose,
the fulcrum on which they build defensible
differentiation.
©Beaton Capital 2015
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‘Currently, there is very little that saliently
distinguishes one law firm brand from another.’
Independent research shows that, other than
size, currently there is very little that saliently
distinguishes one law firm brand from another1.
Instead, brand strength is measured by reference
to the number of lawyers or annual revenue, not
their quality, capabilities, or value delivered to
clients. Based on our own observations and shared
experience with others, very little is done to
manage a firm’s brand strategically. Most effort and
money goes into laying out an undifferentiated
shop front stating the obvious in lengthy lists of
features and people, including the personal brands
of lead partners and thought leadership activities.
These days this is a superficial and fragile brand
strategy.
The clients of professional firms, including the
major international corporates with B2B channels,
both recognise the need for and implement
brand purpose strategies. The rationale is neatly
summarised by author and Rand Corporation
adviser, Simon Sinek ‘People don’t buy what you
do, they buy why you do it’2. So why are law firms
missing the move?
We believe there are three primary causes of this
behaviour: firms’ historic and successful reliance
on the personal brands of their key partners3,
giving rise to a culture of ‘why change now’;
cynicism of law firms towards ‘things related to
marketing’; and the absence of ROI methods being
applied to brand investments.
It is also argued by some that a lack of
differentiation amongst close competitors in any
given strategic group does not really matter –
after all, there is enough work to go around and
being differentiated does not pay on cost-benefit
grounds. The problem with this argument is that
©Beaton Capital 2015
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oligopolies such as the Big 4 accountants, or the
Big 5 executive search firms, or the Big 3 strategy
houses, or the Big 5 property consultants, which
are cited to prove the point, have become just that,
oligopolies. Law firms have not reached this supply
polarity – yet. There are scores of competitors. So
whilst the globalising legal market is in a state of
flux, brand and everything related to identity and
differentiation have become critically relevant to
clients, talent, law firm growth, and – ultimately –
profitability.
This is where the concept of brand purpose comes
in. It captures the essence of business strategy: to
find and grow a defensible position.
‘Brand purpose is the organising principle that
directs everything a firm does.’
The nature of brand purpose
Brand purpose, as a composite term, is far more
than what an average law firm equity partner will
associate with mere visual identity. Yes, visual
identity is critical in conveying cognitive and
emotional connectivity (you love it, you hate
it, you are indifferent etc.), but brand purpose
identifies and captures the differentiating synergy
between the following three primal elements of a
firm:
> Culture – What the firm stands for, how it
behaves internally and externally, what it
values;
> Reputation – What the firm is known for, the
respect it attracts in the market, what problems
is it asked to solve; and
>
Relationships – Who is the ‘company’ the firm
keeps, e.g. its clients and advocates, and into
which circles is it invited, e.g. agents of
influence, knowledge and power.
Brand purpose is the organising principle that
directs everything a firm does. It is fundamental
to differentiation and this is worth repeating – it
establishes the binary relationship between ‘what
a firm stands for’ (internally) and ‘what a firm is
known for’ (externally).
Brand purpose provides seamless connectivity
between the internal and external aspects of a
firm, as one visionary professional services firm
CEO we know puts it ‘by every person, every day,
in every thing, for every client’. This is a critical
point; brand purpose is generated from within
where it is lived, and it is projected externally to
stamp the firm’s differentiation on both its chosen
client markets and chosen pool of future talent.
©Beaton Capital 2015
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Ultimately, it becomes the reason people get up in
the morning and go to work at a particular firm.
We like this profound pithy expression of the role
of brand purpose: Through brand purpose a firm
seeks to develop relationships with valued clients,
thus creating competitive advantage and thereby
maximising returns to the owners of the firm.4
But establishing brand purpose takes relentless
investment and proof
‘Brand purpose provides an essential complement to
relationships.’
Why brand purpose matters
Across all sectors and including law, the
business community is in the midst of a major
change in why and how it sources services
and products. Global supply chains are being
relentlessly revolutionised by digitisation and
disintermediation. Whether we like it or not, this
trend has a direct bearing on a law firm’s brand and
the immediacy of what it evokes in clients for the
following reasons:
> Values will be as or even more important as
functional benefits
> A point of view will be as important as a point
of difference
> Building and facilitating communities will be as
important as broadcasting to mass audiences
> Meaningful brand actions will be paramount
to building authentic, genuine relationships
with clients and talent.5
And last, but by no means least, brand purpose
matters to the owners of law firms. It is
readily shown that a strong brand positively
and incrementally affects the levels, timing,
sustainability and riskiness of cash flow. Those
with a financial bent will recognise these four
factors are major drivers of net present value6.
Critically, clients are central to the sustainability
and riskiness of cash flow – what more does law
firm leadership need to be convinced of than the
centrality of brand purpose?
©Beaton Capital 2015
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Brand purpose in the professions is
different
Unlike other industries, the intense human factor
in law and other professional services firms
makes management of brand purpose particularly
challenging. The inextricable relationships
between practitioner and client, and partner and
staff member, have a direct bearing on a firm’s
brand in the broadest sense. Much of what a
law firm produces is a function of partner-led
relationships – both internal and external. Which
is one of the reasons why some firms devalue the
need for brand purpose – believing partner-client
relationships are sufficient. But the opposite
is true, it is because of this dependence on
relationship that brand purpose is essential.
Brand purpose provides an essential complement
to relationships. It is pervasive, continuous and
– critically to a growing firm – it is sustaining
irrespective of changes in, or the performance of,
individual partners.
‘Brand purpose is an offensive, not only a defensive
strategy.’
Why brand purpose is important now
Offensive and defensive
For many (almost all?) law firms their brand
purpose is subjugated by the power of individual
equity partners. All to often ‘rain maker’ partners
and others with positions of influence use their
power both to protect their own position and
direct the rest of their firm – a classic case of the
tail wagging the dog. But the world has changed.
There is a secular shift from a sellers’ to a buyers’
market in legal services7, competitive rivalry has
never been so intense with globalising firms
competing where they used to refer work, specialist
firms (i.e. boutiques) with lower cost bases are
skimming the market of high value work, and
increasing lateral hiring is undermining historic
relationships between firms and clients8.
Brand purpose is an offensive, not only a defensive,
strategy. Individual relationships alone, both
internally and externally, are necessary but
no longer sufficient to provide the cohesion
needed for a firm to grow globally. Whether firms
are following their clients offshore or seeking
new clients in new geographies, a strong and
robust brand purpose that permeates the whole
organisation should mean that ‘what the firm
stands for’ (internally) and ‘what the firm is known
for’ (externally) is consistently understood by every
person in every office and in every market – surely
an essential when global clients are themselves
united by a brand purpose.
A threat to law firm status quo is the rupturing
of its culture, reputation and relationships that
have been forged by and are reliant on individual
partners. Brand purpose is an answer to this
threat by creating true sustainability of a firm’s
differentiation in an increasingly competitive
market, independent of any one or group of
partners.
©Beaton Capital 2015
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As competitive rivalry increases and as firms
continue to enter new geographic markets the
imperative to establish a sustainable identity and a
point of differentiation has never been greater. It
will be those firms that achieve this through robust
brand purpose that will prevail and prosper; they
will become the ‘front of mind’ firms of choice for
both clients and talent.
‘…all adding up to a very powerful point of
differentiation’
The competitive advantage brand
purpose brings
In addition to the advantages we have discussed
relating to mitigating the risk of a heavy reliance
on individual relationships and the fulcrum it
provides for growth, brand purpose has its own
suite of measurable benefits. These benefits have
been researched in many industries9 and a priori we
believe there is ample evidence they apply too in
law firms.
ClientsTalent
Enhances saliency and reputation
Enhances organisational cohesion
Maintains and builds competitive advantage
Improves staff discretionary effort and moral
Sustains premium pricing and margin
Enhances ability to attract and retain talent
Creates differentiation
Consolidates and aligns ways of operating and
service levels
Provides a heuristic for quality and perceived value
Improves service performance
Facilitates expansion and diversification into
other areas (brand permission)
The self-reinforcing nature of a well-executed
brand purpose strategy cannot be understated:
clarity and congruence of identity, consistency of
behaviour, organisational presence and stature,
demonstrable values – all adding up to a very
powerful point of differentiation.
But the most powerful benefit of all from a strong
brand purpose is necessarily subtle, and often
overlooked by law firms. Well-managed brand
purpose demonstrates shared values with clients –
a fundamental tenet of being a trusted advisor.
©Beaton Capital 2015
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‘Well-managed brand purpose demonstrates shared
values with clients – a fundamental tenet of being
a trusted advisor.’
Brand purpose in practice
In practice brand purpose is typically executed through a wide range following programs and initiatives;
these include:
> Client selection criteria – who are the ‘right’ clients for firm and is the firm ‘right’ for these clients
> Client service standards – quality, consistency and specificity
> CRM approach – globally coordinated in a credible manner that is seamless in action, not just words
> CSR – evident, demonstrable, meaningful
> Thought leadership – focused, effective, truly innovative, relevant
> BD and pitching – professionalised, fully invested, imaginative, proactive integrated with intelligent
in-bound marketing
> Employer brand – exemplary, treatment of staff mirrors treatment of clients, unlocks discretionary
effort, work-life balance is lived
> Partner and staff selection and performance management criteria – reflecting the values of the firm,
feedback given respectfully and continuously
> Training – management development, professional skills, technical skills
> Internal communications – consistent, inclusive, empowering
> PR and profiling of leaders at all levels – authentic, comprehensive, relevant, congruent channels
> Sponsorships – consistent with CSR, both globally and locally
> Digital face – reflective of contemporary standards and expectations
> Events – integrated and thought provoking pre-event, during event and post-event initiatives
> Industry programs – demonstration of leading global expertise, combining practice groups and
geographies with powerful testimonials.
As this list suggests, consistency, focus, relevance and respect are common themes. A brand purpose
strategy is about embedding these values into a firm’s fabric and being.
©Beaton Capital 2015
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‘Brand purpose establishes the binary relationship
between ‘what a firm stands for’ and ‘what a firm is
known for’.’
In conclusion
In the words of that CEO: ‘Every person, every day,
in every thing, for every client’. This is the promise
and benefit of a well conceived and executed brand
purpose.
To close we paraphrase David Aaker, greatest
authority on brand, “It is a watershed moment
when a CEO realizes you can only restructure so
much in response to a changing environment–you
also need to grow….”10 The key is brand purpose –
the fulcrum on which all turns.
Authors
Warren Riddell
Partner, Beaton Capital
[email protected]
www.beatoncapital.com
George Beaton
Executive Chairman, Beaton Research + Consulting
[email protected]
www.beatonglobal.com
Ben Welsh
Executive Creative Director, M&C Saatchi
[email protected]
www.mcsaatchi.com
©Beaton Capital 2015
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The concepts and principles used in this paper apply to all professional services firms, indeed,
all organisations and products. We have chosen to illustrate the practical power of brand purpose
with reference to one industry, law firms, for the sake of simplicity of language and examples. Later
publications will address the nuanced differences found in other professions.
1
2
Simon Sinek (2009) Start With Why: How Great Leaders Inspire Everyone to Take Action Portfolio.
We observe there’s a prevailing urban myth that suggests it is universally true that clients hire
individual lawyers, not law firms. Our research suggests that while the personal brand of a lawyer
remains important in some situations, the brand of firm (in the full sense of brand used in this paper) is
becoming increasingly important – to the point that it dominates the client’s decisions.
3
We acknowledge this way of thinking about brands and brand purpose is based on the work and writing
of Professor Peter Doyle in Value-based Marketing (2008) John Wiley & Sons, and Professor David Aaker
in Building Strong Brands (2011) Free Press.
4
Michael E. Porter and Mark R. Kramer Creating Shared Value: Redefining Capitalism and the Role of the
Corporation in Society in Harvard Business Review, January 2011.
5
6
Peter Doyle (2008) Value-based Marketing John Wiley & Sons pp52–54.
Warren Riddell (2014) Life Cycle Maturity and the Professions, Beaton Capital white paper at
http://www.beatoncapital.com/thought-leadership/white-papers/.
7
George Beaton (2014) Why the economics of free agency should worry partners more at
http://www.beatoncapital.com/blog.
8
Analysis of case studies published in Advertising Works, the Institute of Practitioners in Advertising
(2005–2012) by Richard Storey and others.
9
Frank Viviano interview with David A. Aaker (2014) The Plato and Newton of Branding: Berkeley’s David
Aaker at http://alumni.berkeley.edu/california-magazine.
10
©Beaton Capital 2015
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