Thought Leadership

Qamar Anwar, Managing Director at First4Lawyers features in Armstrong Watson's latest publication, 'the law'

7 MINS

Qamar Anwar, managing director, October 03, 2019

Our managing director, Qamar Anwar, features in the Armstrong Watson new legal publication, 'the law', discussing changes in the personal injury market and what law firms need to be focusing on right now.

Q) You have a track record of developing caseloads for law firms, and personal injury lawyers in particular. Given the current changes in the personal injury market, what do law firms in that sector need to be focusing on right now?

Claimant solicitors we surveyed recently predicted that the Civil Liability Act – which is due to come into force in April 2020 – will lead to a sharp contraction in the market, with firm closures and staff redundancies. There were also signs that the changing PI market is already having a negative impact, with 42% saying their firm had seen profit decrease over the past year (it had increased for 30%), while 46% said cashflow had worsened and 40% had seen staff numbers reduce. Almost half said the cost of doing business had increased.

On the plus side, only 13% of respondents believed the reforms would lead to their firm closing, with a good number saying their firm was sufficiently diversified to cope.

In the short term, the deadline has already produced greater competition for work, adding further pressure to the PI market in recent months as firms look to make the best of the current regime. Though there is speculation that the new regime may be delayed, at least by a few months, time is running out for law firms to decide how they are going to face the future and adapt to meet the challenge of handling low-value cases.

The reality is that many claimants will still need and want their assistance, and we know that solicitors are looking at ways of delivering this in an efficient and effective way – but with cases running in the small claims court, meaning no costs recovery, and damages lower than now, the model will have to change significantly. Some firms will look to other areas of work unaffected by the reforms, and so we can expect competition to stiffen here too – and firms must ensure they have the expertise to diversify.

Q) What are the best ways for law firms to work with external marketing agencies?

To start with, both sides need to do their due diligence. For law firms, compliance is a top priority. They need to ensure that their marketing partner complies with the SRA’s rules and with LASPO, and be happy with the way in which it acquires and qualifies leads. Firms obviously want to avoid fraudulent and spurious claims, and particularly in high-value areas like clinical negligence, it is important that leads are strong – a high failure rate from poor-quality cases can impact severely on profitability.

Equally, the marketing partner should have their own statement of values and service standards, and be satisfied that the law firms they work with meet those high standards. If it’s just looking to pass on leads to just anyone, then firms could be putting themselves in danger by dealing with them.

Then there are the more straightforward issues like competitive pricing terms and knowing exactly what you are getting for your money. The marketing partner should also be able to provide regular management information, and be available for conversations and meetings. Two-way communication is vital.

Ultimately, though, both should be focused on looking after the injured person. That has to be the starting point.

Q) How do clients tend to decide which law firm to appoint?

It is well established in retail markets such as personal injury that consumers assume lawyers have the technical expertise to handle their case, and low-value PI is especially unusual in that there is no real price competition. So, the quality of service, from the moment the phone rings or the email pings, is crucial. This is especially important given legal regulators’ efforts to encourage consumers to shop around for legal services.

It is important to realise that the dynamics between lawyer and client are changing. Consumers are just one click away from seeing a competitor brand. Firms now need to be doing everything they can stand out from that competition.

But when we carried out mystery shopping research last year, we found that many PI firms are missing out on significant amounts of business because of the way they handle incoming enquiries from potential clients.

Following up contacts was the most striking problem: where firms had to call back the mystery shopper, 23% of them did not do so for more than two days – or at all. By contrast, 35% called back within 15 minutes, a world-class level of response.

In the main, the mystery shoppers were happy with their interactions with law firms. Four in five found their overall treatment warm and engaging, and there were virtually no complaints about having to wade through jargon.

But what was lacking was a sense that the firm really wanted the work – asked whether they felt the firm attempted to add value or ‘go further’ for them, only 52% said yes. There was also evidence that many firms failed to ‘sell’ the value of using them to the caller and usually did not offer either to send further information or arrange to make a follow-up call.

One of the solicitors we interviewed for the report described incoming enquiries as “the single most important call that comes into the office”. As he put it: “If you don’t treat that phone call with the respect it deserves, you might as well burn £5-600.”

Q) How are firms and clients responding to the new price transparency requirements? What help is there for firms in this regard?

Compliance is certainly a mixed bag, if SRA research is anything to go by. The regulator recently reviewed 447 law firm websites (it looked at 500, but 53 didn’t work!) and found that 17% were not compliant at all, and a further 58% were only partially compliant.

The 78 firms that were not complying at all were given two months to do so, or face enforcement action. The partially compliant firms have been asked to add the missing information. The SRA will then target these firms in future websweeps, which it plans to carry out a least twice a year.

The most widespread failing was not displaying information on how to complain. Other areas included not specifying the amount of VAT applied to costs and not displaying information on key stages or likely timescales. Many firms were also not providing a description or estimated costs of likely disbursements, and again not specifying where VAT applied.

As to how clients have responded, it is simply too early to tell, but on the face of it transparency is a good thing; if you’re searching the internet for a solicitor one evening, the odds are that you will be keener on the firm that gives you all the information up front than the one that makes you call or send an email.

There is advice on compliance from the regulators themselves, while in conveyancing you see quote generators, which are useful tools. But what we have still to see take off in legal services is comparison websites. There are various reasons for this, but such sites can help regulators achieve their aim of more choice and greater transparency from providers.

The ideal legal comparison website will enable consumers to garner enough information about a legal matter and potential law firm to give them the trust and assurances that they are making the right choice, rather than just looking at price alone. In essence, like all of your marketing, you’re warming up the client, making it easy for them to approach a law firm and saving the law firm time by giving them more tangible enquiries.

Understandably, a lot of lawyers do not like the idea of comparison sites – legal services are not as easily priced as a holiday or car insurance, and that is reflected in the limited range of work types to which the SRA transparency rules apply. It remains the case that, outside of so-called commodity areas of practice like conveyancing, will-writing and probate, pricing is bespoke – but lawyers need to adapt to the demands of the consumer age and at the very least have grown-up conversations with clients about fees and ensure it is an ongoing dialogue – costs continue to be one of the main causes of complaint to the Legal Ombudsman, but most of these issues are easily overcome by being open and prompt in addressing them.

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