A recent article in PM Forum’s magazine, talking about the impact of private equity on the directories, has reignited a discussion about their future direction. If you are part of the legal sector, this is something that you will likely have a view on. If you are not part of the legal sector, you might wonder what the fuss is about. That dichotomy sheds light on the answer to the question: is it time to ditch the directories? Intrigued? Read on!
For those not in the know, what are “the directories”
The directories – Legal 500 and Chambers & Partners being the front runners here – are businesses that rank law firms. It is a lucrative business model and many other rankings have emerged over the years as a result.
Law firms put forward a comprehensive review of their work, to be critiqued and reviewed by a team of researchers who then measure their performance vis-a-vis their competitors. Not only are practice groups evaluated, but so too are individuals. Of course, the directories don’t just take the lawyer’s word for it. They also ask peers to opine on each other and they will speak to the clients firms have chosen to put forward (the elusive "referree"). Whilst payment is not required to submit, firms do pay for a profile and increasingly for other "add-ons".
In this article, I am going to be exercising my debating skills and will put forward the case for and against ditching the directories.
The case against ditching the directories
1. An independent review
Lawyers are in the business of providing legal services to clients. Many clients are sophisticated buyers who have multiple contacts at a range of firms. Others are less well informed, perhaps because they need a type of legal work done for the first time, or are entering a new jurisdiction. The directories, which pre-date the wealth of online review platforms that now exist, provide a credible way for clients to choose which firms to approach.
Arguably, the insights that firms provide the directories, much of which is often confidential and not available openly to the public, provide the researchers with a good understanding of what goes on at the firm and a valuable means of comparing like-for-like.
2. Helpful to win work
If you are an international firm, or a barrister – in other words part of the legal profession – the directories are a useful calling card. It is something that other firms understand and it can be a useful source of referrals. Large firms working on global deals often find themselves in need of a firm to support them in a jurisdiction where they don’t have a footprint; the directories can be a quick shortcut to instructing a reliable firm. If you are on the receiving end of those referrals, the drectories can be a valuable source of work.
Herein lies an irony, the larger firms for whom ditching the directories perhaps make the most sense, are the ones that many other firms are trying to court through the directories.
3. It helps with personal branding
As someone who has worked on the inside of firms, I know that the day the directories are released is a busy one for marketing teams. Lawyers care about where they are ranked, and at what level. Many will say the directories are held up and driven by ego. As we are putting forward the case for keeping the directories here, we won't go down that rabbit hole. It would be remiss not to recognise that a good ranking is something to shout about.
Sadly, many lawyers shouting on the same day on social media tend to cancel each other out! However, rankings can be used in pitches, and indeed some RFPs ask for ranking to be included in the response.
4. The work can be leveraged
Before I bemoan the time taken to produce directory submissions, it is true to say that the smart firms leverage the content and time spent. The submissions can be used to update key messages to the market, for refreshing websites, pitch decks and producing case studies.
The directories process is an opportunity for marketing and business development teams to speak to many of the professionals they work with. This time can be leveraged to further other business development activities. A conversation over this period doesn't have to be exclusively about the directorites.
The case for ditching the directories
1. Takes time away from other business development activities
A big reason to ditch the directories is the disproportionate amount of time (and money) spent on submissions. Months are wiped out as teams try to remember what work has been done and on pulling together the lengthily written response.
The money spent on this is well known – it often represents a sizeable chunk of the marketing budget. This multiplies if external consultants are involved. The time taken (by a host of professionals) is rarely recorded and accounted for. The combination of both is a huge sum which really doesn’t have to 'work for sign-off' in the same way as other marketing spend.
Not convinced? Ask someone in your firm to show you the true ROI on directories work.
ROI on marketing and business development is notoriously hard to measure. However, a quick check on where new matters have come from can uncover whether the directories was the source. Some firms do this. I suspect that the percentage is small (outside of those international firms and barristers that perhaps do see multiple instructions come through as a result).
However, all firms (including international firms and barristers) could be using the resources put aside for the directories on other business development activities. These activities could sensibly be done when all the competition have their heads in submissions. These activities might well cement relationships with clients, law-firm referrers and prospects. The ROI is likely to be higher because it is more targeted.
2. Illogical
Not only does the preparation of directory submissions take up a huge amount of resource, it also leads to some illogical decision making. The directory submissions ask firms to supply confidential matters. They do keep these confidential. In the UK at least, the SRA guidelines are clear - consent much be obtained from clients before submission. However, the amount that is sometimes shared always leaves me feeling a little uneasy . Of course, the time to go out and gather written consent from clients adds to the workload and time spent.
You might say that that asking for client consent in order to secure a ranking is not illogical. It is no different from asking for a reference. That might be true, but are those same clients asked for testimonials or case studies in the public domain?
What becomes even more illogical, certainly to someone who spends a lot of time listening to clients, is that firms are happy to contact referees to set them up and make sure they will answer a call from the researcher. A researcher who doesn’t feedback what has been heard and who has no interest in strengthening the relationship with that client. The same enthusiasm is sometimes not given when it comes to producing a list of clients for client listening. We suspect that there might be some fear of finding out here.
3. Most clients don’t use the directories
When we conduct client listening, we find out how relationships are formed. We understand the drivers and what clients look for when instructing. On occasion we even ask whether the directories are useful. It is a rare (and we mean rare) client who says that they turn to the directories to find a lawyer. If they really don’t know where to turn, they will look to peers for referrals. Now, if the whole driver is to win work, this is perhaps welcome news to firms looking to ditch the directories.
Fear is a big driver in law firms. Lawyers are a pessimistic lot having been trained to identify risks. The time spend pulling together submissions is not only time not spent on client work, but it is also time that isn’t being spent strengthening relationships.
For those firms with strong relationships, the directories simple aren’t needed to win work.
4. Are they still robust?
The editors and the reseachers inside the directories will say that they are robust. I don't doubt that they believe this to be true. As someone who has written multiple submissions and got numerous firms higher positions in the rankings, I know that there is a game to be played. The way that you put forward your matters and evidence your key strengths plays a part in how you are seen and therefore ranked. Making sure that you are clever in your choice of referees is also part of it.
The directories don’t come with an instruction manual, and often firms don’t put the best foot forward. As a result, despite the process being robust, the rankings are perhaps not as reflective as they could be of the market.
Silvia Van den Bruel, in the aforementioned article, articulates this so well when she says: “The credibility of their research as first movers was their strength. This has, in my view, weakened over time. When I speak to my peers, complaints about the editorial and the quotes ‘being too similar to the previous year’ have become more prevalent and remarks like ‘do they even read our submission?’ are more commonplace.”
Where do I stand?
I don’t believe any marketing or business development activity should be done just because that is what has always been done. I don’t believe ego or fear should be a driver of such a big marketing and business development spend. In the age of differentiation, doing something just because everyone else is doing it is shortsighted.
The directories need to be seen as part of the mix of activities that a firm does. If a firm choses to do the directories they need to recognise that is time and money that is not being spent elsewhere. Resources are finite even in the largest of firms.
Can you show ROI on the work you do submitting to the directories? Are you being honest about that ROI?
Some firms will see work come in as a result of their ranking. If that can be evidenced then ditching the directories might not be for you (if the work that comes in is proportionate to the spend). However, some robust analysis might show you that the return isn’t there – in which case it might be time to ditch the directories.
The answer, really should come back to your target market. Who are your prospective clients and where are they looking for lawyers?
If you would like to talk about whether it is time to ditch the directories, we would love to hear from you. Maybe, you are looking to refocus and gather insights from your clients, or to train your lawyers to get the most out of the time they spend on business development? Get in touch.
