A few years ago while traveling, I had the opportunity to read an article about how private labels in grocery stores were gaining traction against national brands. While the article isn’t available online anymore, the story offers some interesting food for thought (no pun intended) for the legal industry and the way that law firms are tackling the challenges presented by the current marketplace.
The article focused on the Publix Brand Challenge, which still takes place today:
Several times a year, the Publix Super Markets chain in the Southeast pits three to five of its store-brand products against their national-brand equivalents…If customers buy one of the featured national-brand products, they’ll get the Publix store-branded version for free. ‘Buy theirs, get ours free,’ the ad trumpets. ‘We think you’ll prefer Publix.’”
It sounds like a risky gamble – a store is putting up their brand against national ones? But the data backs up their claim that private labels are becoming more successful – due in part to the economy, but also because brands are being revamped to better compete with national brands. Can you think of another industry where the competition has been heating up? (Hint: it’s ours)
In this case, private brands have created higher quality products and that has become their differentiator, because cost-savings is the common denominator, but it’s different for law firms. For firms, having a high quality product (your service as lawyers) is more the common denominator, and I don’t know many firms that want to jump into cost-savings as the differentiator. It doesn’t have to be (though, caveat on that to come later).
Christopher Durham, a private brand consultant who runs My Private Brand (www.mypbrand.com) says:
‘[I]f you have a great store brand, it gives you the opportunity to build strong, unique relationships with your customers because the customers must come back to your store for it.’” [emphasis is mine]
You may not be selling consumer products, but what ARE you “selling” that no other firm does? What can clients get at your firm that they can’t also find at every other firm (or legal service provider) in the marketplace? If you strip away the name of your firm from your branding, would your clients be able to pick out your firm from the rest of pack?
If your answer is “hey, we’re just really good lawyers,” then I hate to break it to you, but almost every firm in the marketplace also has “really great lawyers.” Why should clients come to and stay with YOU?
In today’s marketplace, this isn’t an easy question to answer. We’re seeing a lot of law firm mergers in the US particularly, where firms want to be seen as full-service and able to serve all of a client’s needs in a one-stop shop. But is that the most effective way to serve a client’s needs?
Being Nimble in a Down Market
The ability to engage and react with the market can be a benefit in a changing industry, and grocery stores have seen the benefit of this too:
‘Retailers with store brands were able to react more quickly to the recession than the large national brands,’ says Don Welge, president of the Gilster-Mary Lee Corp…’Store brands were able to gain a competitive advantage at that time,’ Welge says. ‘Consumers had less money in their pockets and were shopping harder to save money for their families. As a result, some started using store brands who hadn’t tried them before.’”
Even though we’re not in the same place we were in the years following 2008, we’re still dealing with an extremely cost-conscious client base. They’re looking for new and unique ways to save money – and it’s less about getting a bargain than it is about getting value for the legal work that they’re paying for. When the downturn hit, clients began to give more work to smaller firms that they may not have previously worked with, who could more easily offer creative solutions for their legal needs. More work was kept in house. Now we’re seeing work go to other legal service providers, and increasingly alternative solutions provided. Competition has never been fiercer – this is not news.
Adding Value, Not Slashing Rates
Grocery stores have had the same experience, and “where store brands are seeing the greatest growth…is with value-added products, not budget items.” I want to take out a billboard and shout this from the rooftops – it’s not about the discounts. How is and can your firm be adding value to your clients in a way that another firm is NOT? If you’re simply giving your client a reduced rate on fees, and a client is willing to switch to your firm because of the price, then they’re willing to switch to another firm for the same reason. So what are the value-added products that your firm is giving to your clients? More focused client teams? Better service? Access to an international network? It’s essential to identify what those are.
And here’s where my caveat comes in – while I’m not a big proponent of the general discount, I AM a big fan of taking a hard look at your firm as a business, and identifying how you can run your legal matters more efficiently, to both save your client money and to increase your bottom line. Everyone wins in that scenario. It’s not about making your services cheaper; it’s about running a more efficient, smarter legal practice. There are firms already doing this, and they will be ahead of the game when it comes to competing for work, because they understand how to value their services, and deliver that value to their clients.
“[S]tore brands are filling niches overlooked by the national brands.” How is your firm filling the niches overlooked by other law firms? There is huge opportunity here to identify the ways in which your firm is different to others, and how that translates to being a benefit to the clients you serve and want to serve.
The legal market is a challenging, exciting place to be at the moment, and the issues that confront us are not easy ones. I recognize that for some lawyers, there’s a real yearning for the years past, or the hope that you can hide your head in the sand until retirement, and for some of you, that may be possible. But for many of us, there are no quick fixes, and we need to dig in and face these challenges head on. Law firms are no longer competing against only other law firms. So there’s no more skating by on “we’re good lawyers” anymore. What brings a client to your office and what makes them stay?