November 2020 for Claims Magazine

This year more than any in recent memory has highlighted how much businesses need to be aware of their costs and budgets. Businesses can be forgiven for not having predicted an unforeseen global pandemic, but what about what’s been right in front of them for some time? Why are personal injury law firms failing to understand what potential clients are looking for and wasting their marketing budgets as a result? This year we undertook research to try and understand this, surveying 100 PI and general consumer law firms on how much solicitors understand their clients, and gauging firms’ marketing activity and spending.

We are at a uniquely difficult time for PI firms, squeezed at one end by Covid-19 and lockdown – which has severely impacted the number of new injury claims of all kinds – and at the other by next April’s launch of the Ministry of Justice’s whiplash reforms. By then they will be two years overdue and the politics of PI means that any further delay is unlikely.

But people will still have accidents and will still need lawyers, and with the Competition and Markets Authority’s (CMA) review on the legal services market due imminently, following their December 2016 report which found the sector was “not working well” for consumers and small businesses, there have been industry efforts encouraging consumers to shop around before choosing a lawyer, making it more important than ever that law firms present themselves positively to the outside world.

However, while more than two-thirds of solicitors polled in our research believed that clients shopped around before choosing a lawyer, the reality is that only around a quarter do, highlighting the importance of a good first impression. Our research also highlighted that recommendations from family and friends, as well as having a local office and a quality mark, do not rank as highly with clients as lawyers think – surprisingly, most solicitors still do not think that online searches are that important, although PI lawyers (15%) are nearly twice as likely to think they are the main route to finding a firm than other lawyers (8%).

Firms are making a big mistake in underestimating the importance of online searches. It’s the best-quality enquiry out there, our own statistics show that a contact that’s come from search engine marketing activity is more likely to convert into a live lead than from any other form of marketing.

Other findings were that some 40% of firms have already cut their marketing budgets because of the pandemic, while 19% of PI firms have made marketing staff redundant (11% of general consumer firms), with another 12% planning to.

A bullish 17% of PI firms, double the number of general consumer firms, increased their marketing spend instead, and PI firms were significantly more likely than consumer firms to have changed their marketing tactics in recent months (41% versus 29%).

We would say that now is the wrong time to reduce marketing spend because of Covid-19 – at First4Lawyers we upped our investment during lockdown. This is the time to invest, it’s when times are good that you take it easy – Amazon stopped advertising during lockdown because the market played into its hands, and restarted when shops began reopening.

You don’t have to invest millions or hundreds of thousands, but you do have to monitor the data closely. Your marketing budget can disappear very quickly without achieving the desired results if you’re not careful. And even if it appears to be delivering, are you sure that you are making every pound work for you?

But most powerful of all was that the research also showed that too many firms are making decisions based on gut instinct or anecdote, rather than data and hard evidence. Shockingly, only half of PI focused firms surveyed analysed the performance of their marketing in the previous quarter or year when making spending decisions, this has not changed since we last surveyed this in 2017, and is unbelievably harmful.

For all of us in the industry it is clear that the PI market is only going to get more competitive – if next year’s whiplash reforms push firms out of low-value RTA, then there are going to be even more eyes turning to other areas of PI. Add in the regulatory pressure to encourage consumers to shop around and getting them just to look at you in the first place is only going to get harder.

There are 10,500 law firms in England and Wales and plenty of them do PI. To consumers, law firms largely look the same. So, if you are going to attract new clients, you need to be smart, strategic and stand out from the crowd.

You can download the findings from our latest white paper here.