Firms that fail to develop a clear brand and business strategy will struggle to survive in today's legal sector

When Eulogy! published its white paper, 'Reputation: the key to staying afloat in the new legal world', this time last year, it caused quite a stir. We had spent 10 months analysing how the top 100 law firms were performing from a brand and reputation perspective. We looked at their marketing strategies and tactics, PR coverage and sentiment and client communication, as well as questioning lawyers, marketers and clients about their views of the legal sector. This gave the first true picture as to which firms had the best brands and reputation.

Our key findings were that, while there were several firms with a clear identity and culture, there were too many that had difficulty in differentiating themselves from other firms. This was simply not good enough when the sector was experiencing a perfect storm of change. On one side, new commercial bodies such as BT and the AA had begun to offer legal services. On the other, a new post-recession economic reality created new expectations from clients. In 2014 excelling at legal work was no longer a differentiator, it was a given. 

Many traditional law firms are aware that there aren't the fees to sustain the traditional business model. Put simply, there are too many law firms and too many lawyers for a finite amount of work. Without a strong reputation within the legal and wider business market – without a clear brand, direction and business strategy – many law firms will simply not survive the next few years.

So, one year on, what's changed? Unfortunately, very little. We are about to publish our latest report and, while there are some firms that have made great strides in developing their brand, others are crossing their fingers and hoping for the best.
More importantly, this year we decided to move away from the legal propensity for navel gazing and instead compare law firms to management consultancies and accountancy firms. The difference is stark.
 
So why is the legal sector so far behind others? Some partners believe that the biggest hindrance is the partnership model itself, but, when assessing other professional services firms, this reasoning doesn't stack up. My view is that too many firms have grown organically without a clear business strategy, with management teams under pressure from partners to maintain and increase profit per equity partner rather than wider commercial matters.

If your firm was created from scratch today, would you adopt its current structure? What is the market need for it to exist? If these questions can't be answered, then having a clear brand proposition is impossible.

Underpinning this is the simple fact that, for many partners, the term 'brand' is alien and not relevant to their daily lives. Yet by joining their firm they already have a perception and understanding of what it does well and its culture. The firm's brand is the promise that potential clients have, and this promise is delivered by the way the partners service the client.

We entered into a crowded market when we published this report last year; the legal sector has been open to rankings for years. The legal directories – Chambers and Partners and Legal 500 – have traditionally been powerhouses and are still beloved of many a partner. However, judging a firm's capability based on work undertaken up to two years before publication is outdated. If firms spent as much time on their brand proposition as they do on legal directories, they may have a better chance of survival.

David Flynn is head of professional services at Eulogy!

• Marketing and Business Development Innovation is one of the categories for The Legal Innovation Awards, which take place in London on 22 May. The deadline for entries is 20 March. For more details call Steve Hands on 0207 004 7460.