Although there are clearly exceptions, it is well understood by most law firm marketing and BD specialists, if not so much by partners, that for the most part, technical ability is not a differentiator in the eyes of clients. And even if it is a differentiator in a specific situation, claims of superiority tend to be viewed by clients as little more than hyperbole and lacking any kind of proof.
In his book ‘Think Again - Innovative Approaches to the Business of Law’ (much of the content of which is as relevant today as when it was first published by the American Bar Association in 2007) Jeffery Nischwitz observes;
“… most lawyers and law firms attempt (unsuccessfully) to differentiate themselves based on the quality of their skills and services. We are talking about attempts to differentiate based on quality of legal services, not the quality of the "service"…
For nearly every business, it is very difficult to differentiate based on quality of the product or the service but that is what everyone attempts to do. Just as in the business of law, most buyers or potential buyers cannot accurately judge the quality of the products or services and claimed "better quality" is rarely provable. If you cannot prove it [my emphasis], it is not a point of differentiation...”
So why does so much effort go into trying to achieve the virtually unobtainable?
Being seen to have a relatively unique or at least relatively scarce offering is the Holy Grail from both a business development and a pricing perspective. If you've got what people want and need, they will buy it. Moreover, if you've got what they want and need and they aren't exactly spoilt for choice, a rudimentary grasp of supply and demand and price elasticity should lead to the conclusion (quite correctly for the most part) that you can charge a premium.
After all, we have no difficulty understanding why you must pay considerably more than the norm for a bottle of wine that has won numerous recognised awards or more than the norm for a meal at a three Michelin star restaurant.
In the quest to stand out from the crowd and achieve credible differentiation, law firms turn to a variety of strategies and services, some of which have been around for a long time, some of which are very new and quite revolutionary. Examples include;
Lexoo: An example of a new breed of law firm listing/review/comparison websites – Trip Advisor for law firms if you will. Lexoos chief executive, Daniel Van Binsbergen was quoted in Legal Futures earlier this year as saying that their evidence to date confirms that "lawyers who attract sufficient positive client reviews are able to charge higher fees”.
Acritas: Amongst other things Acritas undertakes detailed market analysis of law firm brand strength based on several measures including top of mind awareness, favourability, consideration for top-level litigation, consideration for top-level M&A, most used for high-value work by domestic buyers and most used for high-value work by international buyers. In the UK, Eversheds currently tops the UK list with Jones Day in the US and Baker & McKenzie internationally.
Beaton Benchmarks: Provides world class studies of client satisfaction and a relevant competitor set with head-to-head benchmarking on business development, brand and performance parameters, brand positioning against close competitors to show levels of brand recognition and differentiation, brand equity and fair value to inform pricing policy and management of your margin, the relative strength of business development capability and ability to maximize client acquisition opportunities.
Premonition: A legal analytics company that deploys data mining and analysis to determine individual lawyer win rates for judges.
But now there is a fascinating new development that may get us the closest we have ever been for a partner to be able to say with empirical rigour and justification, "I am more expensive than the alternatives and there is a good reason for that…”
Dr Peter MacMillan is the founder and CEO of Meisterline Analytics, a boutique research lab headquartered in Hong Kong and dedicated to decoding how legal experts think. The essence of Peter's doctoral research is enshrined in his book "Unlocking The Secrets of Legal Genius".
Peter began his career as a competition law specialist in 1992 and went on to work for major corporate law firms and government authorities in both Australia and Hong Kong. His last position was as head of competition law at Johnson Stokes & Master now part of global behemoth, Mayer Brown.
The underlying rationale for the platform is to enable lawyers to measure their own development as legal experts and to help clients needing to prequalify outside counsel with reference to objective, quantitative metrics, making it the perfect complement to traditional lawyer rating services and ranking directories that rely mostly or solely on qualitative research.
The science behind Meisterline is both old and new. The platforms’ cognitive modelling is based on principles that go back to Mediaeval times when craft guilds created systems to classify different levels of expertise (novice, expert and master) in ways which have never really been improved upon. One of the earliest discoveries made by Peter and his team was that we have a surprising amount in common with experts from centuries ago in terms of how our expertise as lawyers develops.
The core innovation they have introduced has been to add a quantitative dimension based on the latest research by cognitive scientists and the work of coding engineers who have helped them develop proprietary algorithms which can quantify meaningful metrics of expertise. This includes the Meisterline Index™ which can measure a lawyers’ level of expertise within a range of 0.1 to 9.9, pinpoint their present cognitive abilities, and predict their future developmental trajectory.
Legal expertise will always be a differentiator between lawyers, regardless of developments in artificial intelligence, machine learning and the wave of legal tech innovations that will become commonplace. We share Peter's view that legal expertise in human form is likely to become even more valuable as more legal tasks become commoditised and democratised through technological advances.
As pricing specialists, we find tantalising the prospect of being able to work with top practitioners to legitimately and demonstrably stake a claim for better remuneration, like the L’Oreal by-line, “Because you’re worth it”.
Managing Director & Pricing Consultant
M: 0044 (0)7585 637 617