Market forces at work in the private client arena
The last year has proven to be a challenge for many Private Client teams across the country. Some have identified the challenges, others are yet to clearly understand them, however, everyone has recognised that clear threats exist and although their full impacts have not been felt, the fallout is approaching.
Conversations across the UK within the legal services communities have all carried a similar theme. Change in regulation has unsettled some and principally that new ABS entrants will have an impact on the future of their businesses. No one is absolutely clear what the impact will be, but speculation is rife and still presents a hot topic for discussion.
The legal services industry would appear, from an outsider’s perspective, to be in three very distinct camps. In one, sits the alternative business structures and those firms that see ABS as a way to evolve and compete with a changing business climate. In another, would appear to be firms who are aware that change is coming and will admit that they may have to adapt, or adopt, skills to remain a viable choice for the consumer. In the last camp are the firms who are less willing to agree that they will be affected to any great extent in the future and remain resolute in clinging to the more traditional models for business as usual.
As a company that provides ‘processes’ for many industry types, we have to continually change the way in which we support our clients. We have to remain perpetually empathetic to our clients needs as without their success, we have very little to work with. This is
particularly pertinent within our private client support department. We have studied the consumer models for the last few years and have identified areas of threat that will ultimately challenge our clients; ultimately challenging our own business development.
To that end, we have tried to clearly identify the threats to this business area.
What threats?
In 2010 the UK saw around 490,000 deaths. 46% of these did not require any legal services support at all as they were either a first death or the estate simply didn’t require probate. Around 33% (160,000) required a full professional executorship, whilst the remaining 21% bought modular services for areas where they required support. The positive statistic was that 86% of all people buying a service bought from a solicitor. “That all looks like a fantastic market share”I hear you say? If only it looked to stay that way you might be right. However, since that time we have noticed certain trends.
From one side we are seeing an increased number of High Threat areas; The DIY market has increased year on year and with an ever increasing amount of information readily available on the internet to answer many of the questions that may have otherwise prevented this trend, many more consumers each year decide that this is a viable, money saving option. Coupled with this, we see emerging business models that serve to support this trend, providing online tools and slick solutions to enable the DIY market to self fulfil.
Another challenge is that this area of the business is becoming increasingly commoditised; providing opportunity to those that wish to exploit it.
A further observation that is starting to become evident is the lower bargaining power of the supplier. With more information available to
support self fulfilment and increased visibility of competition in the market place, we are seeing a drive toward greater transparency of service and fixed fee structures. Both of these elements are placing increased pressures on traditional law firms to drive greater efficiencies within their current practices so as to ensure that a ‘fixed fee’client remains a commercially viable proposition.
There has been an increase in the bargaining power of the consumer too. Knowing that they are, in the main part, ‘one time’ buyers, better informed, increasingly digitally minded and are becoming ever increasingly part of the ‘Go-Compare age’, it is no wonder that they are beginning to shop around in the hopes of finding a better service or better fee structures.
By far and away the greatest trail blazers that we are seeing at the moment are the new business structures setting out to take on this market by storm. We have recently seen the Co-op and it’s legal services arm make advances within this market. The Co-op has now agreed the purchase of around 600 Lloyds branches on the high streets, giving them around a 10% presence within the high street arena. Coupled with their other associated business arms, this will give them a massive reach to where opportunity exists.
Will writers themselves, who 20 or so years ago began building their will banks, are now seeing those mature. As such, they themselves are becoming increasingly more creative with the services that they offer and many more now offer a probate fulfilment service. To that end, it has become a shrewd move by some firms, to set out to purchase numerous will banks as their value is set to increase significantly. Other firms, as part of the private client land grab, have set up as Alternate Business Structures (ABS) so that they have the ability to diversify their businesses and work with the types of individuals with serious levels of business acumen to help them to win business and develop opportunities.
I have spoken to many firms of solicitors across the country this last year and a very high percentage work to similar business models. Many have spent years building will banks, at a loss, as they understood that this would provide long term sustainability. The majority of
private client work has come to their teams as a direct result of a death notification from their will bank. The remaining business has come from an existing client base or recommendations from those existing clients.
But how long can this traditional model last? May be a few more years? Another decade perhaps? Admittedly I don’t have the answer to that. I do know that unless firms admit that threats to the traditional models exist and that a requirement to adapt and diversify is apparent, then they will be in serious trouble at some point in the future.
How can we compete?
I am a firm believer in the strength of the network. Not just any network. It has to mean something. It has to demonstrate to the consumer, in clear terms, exactly what it stands for and why it should be considered as a viable option. It should be robust in its offering and understand what the consumer wants, not simply what it needs. It should also take advantage of its size, to pool resources so that the message of that network can be heard further afield than one voice alone can possibly shout. It should take advantage of all possible routes to a market and its individuals should be supported so as to ensure that no one is left behind. A true belief, by its members, in a service standard that satisfies the ‘wants’ of the consumer in every aspect of estate administration, not just the parts that a firm chooses to fully engage with.
When I heard that the Law Society were considering an Accreditation Scheme for Probate and Wills I couldn’t wait to find out how broad its scope would be. I had hoped that it would set a high standard worthy of achieving so that the consumer could clearly identify private clients teams that offered a superior service. As a generator of private client work, trying to search for a network of firms who could provide my clients with the service levels that I would wish to utilise has been challenging. As such, perhaps an accreditation would make my task easier. Whilst there is clearly some scepticism among the professional community that an accreditation scheme adds value to the consumer I would beg to differ; surely the market doesn’t deliver a generic standard of pure excellence, rather, consumers experience very different levels of service and should be able to make an informed choice about the quality that they can expect. Many firms are not renowned marketers by their own admission and remain rigidly stuck to the traditional model of waiting for a death notification from a will bank or a recommendation from an existing client. If setting a high bar through membership of an accreditation scheme or of a network allows firms to market themselves as specialists to win the trust of the consumer and follows that through with first class service, then I for one am in
favour.
Firms are beginning to come forward and ask for support. Some are looking at ways within which they can broaden the support and service for their clients, focussing on internal efficiencies and striving to have some meaningful effect on external influences. Others, who have made real progress with change, are now looking at improvements in traditional and digital marketing routes, so as to highlight themselves for worthy consideration to the consumer. Either way, I am excited about what the future will bring and look forward to strengthening existing relationships and building new ones.
Daniel Hamilton-Charlton
Business Development Manager
Move with Us Law Firm Network
For further information and to discuss commercial arrangements for our services, please contact us.
DDI: 01480 409444 E: [email protected] Web: www.mwuplc.co.uk
The last year has proven to be a challenge for many Private Client teams across the country. Some have identified the challenges, others are yet to clearly understand them, however, everyone has recognised that clear threats exist and although their full impacts have not been felt, the fallout is approaching.
Conversations across the UK within the legal services communities have all carried a similar theme. Change in regulation has unsettled some and principally that new ABS entrants will have an impact on the future of their businesses. No one is absolutely clear what the impact will be, but speculation is rife and still presents a hot topic for discussion.
The legal services industry would appear, from an outsider’s perspective, to be in three very distinct camps. In one, sits the alternative business structures and those firms that see ABS as a way to evolve and compete with a changing business climate. In another, would appear to be firms who are aware that change is coming and will admit that they may have to adapt, or adopt, skills to remain a viable choice for the consumer. In the last camp are the firms who are less willing to agree that they will be affected to any great extent in the future and remain resolute in clinging to the more traditional models for business as usual.
As a company that provides ‘processes’ for many industry types, we have to continually change the way in which we support our clients. We have to remain perpetually empathetic to our clients needs as without their success, we have very little to work with. This is
particularly pertinent within our private client support department. We have studied the consumer models for the last few years and have identified areas of threat that will ultimately challenge our clients; ultimately challenging our own business development.
To that end, we have tried to clearly identify the threats to this business area.
What threats?
In 2010 the UK saw around 490,000 deaths. 46% of these did not require any legal services support at all as they were either a first death or the estate simply didn’t require probate. Around 33% (160,000) required a full professional executorship, whilst the remaining 21% bought modular services for areas where they required support. The positive statistic was that 86% of all people buying a service bought from a solicitor. “That all looks like a fantastic market share”I hear you say? If only it looked to stay that way you might be right. However, since that time we have noticed certain trends.
From one side we are seeing an increased number of High Threat areas; The DIY market has increased year on year and with an ever increasing amount of information readily available on the internet to answer many of the questions that may have otherwise prevented this trend, many more consumers each year decide that this is a viable, money saving option. Coupled with this, we see emerging business models that serve to support this trend, providing online tools and slick solutions to enable the DIY market to self fulfil.
Another challenge is that this area of the business is becoming increasingly commoditised; providing opportunity to those that wish to exploit it.
A further observation that is starting to become evident is the lower bargaining power of the supplier. With more information available to
support self fulfilment and increased visibility of competition in the market place, we are seeing a drive toward greater transparency of service and fixed fee structures. Both of these elements are placing increased pressures on traditional law firms to drive greater efficiencies within their current practices so as to ensure that a ‘fixed fee’client remains a commercially viable proposition.
There has been an increase in the bargaining power of the consumer too. Knowing that they are, in the main part, ‘one time’ buyers, better informed, increasingly digitally minded and are becoming ever increasingly part of the ‘Go-Compare age’, it is no wonder that they are beginning to shop around in the hopes of finding a better service or better fee structures.
By far and away the greatest trail blazers that we are seeing at the moment are the new business structures setting out to take on this market by storm. We have recently seen the Co-op and it’s legal services arm make advances within this market. The Co-op has now agreed the purchase of around 600 Lloyds branches on the high streets, giving them around a 10% presence within the high street arena. Coupled with their other associated business arms, this will give them a massive reach to where opportunity exists.
Will writers themselves, who 20 or so years ago began building their will banks, are now seeing those mature. As such, they themselves are becoming increasingly more creative with the services that they offer and many more now offer a probate fulfilment service. To that end, it has become a shrewd move by some firms, to set out to purchase numerous will banks as their value is set to increase significantly. Other firms, as part of the private client land grab, have set up as Alternate Business Structures (ABS) so that they have the ability to diversify their businesses and work with the types of individuals with serious levels of business acumen to help them to win business and develop opportunities.
I have spoken to many firms of solicitors across the country this last year and a very high percentage work to similar business models. Many have spent years building will banks, at a loss, as they understood that this would provide long term sustainability. The majority of
private client work has come to their teams as a direct result of a death notification from their will bank. The remaining business has come from an existing client base or recommendations from those existing clients.
But how long can this traditional model last? May be a few more years? Another decade perhaps? Admittedly I don’t have the answer to that. I do know that unless firms admit that threats to the traditional models exist and that a requirement to adapt and diversify is apparent, then they will be in serious trouble at some point in the future.
How can we compete?
I am a firm believer in the strength of the network. Not just any network. It has to mean something. It has to demonstrate to the consumer, in clear terms, exactly what it stands for and why it should be considered as a viable option. It should be robust in its offering and understand what the consumer wants, not simply what it needs. It should also take advantage of its size, to pool resources so that the message of that network can be heard further afield than one voice alone can possibly shout. It should take advantage of all possible routes to a market and its individuals should be supported so as to ensure that no one is left behind. A true belief, by its members, in a service standard that satisfies the ‘wants’ of the consumer in every aspect of estate administration, not just the parts that a firm chooses to fully engage with.
When I heard that the Law Society were considering an Accreditation Scheme for Probate and Wills I couldn’t wait to find out how broad its scope would be. I had hoped that it would set a high standard worthy of achieving so that the consumer could clearly identify private clients teams that offered a superior service. As a generator of private client work, trying to search for a network of firms who could provide my clients with the service levels that I would wish to utilise has been challenging. As such, perhaps an accreditation would make my task easier. Whilst there is clearly some scepticism among the professional community that an accreditation scheme adds value to the consumer I would beg to differ; surely the market doesn’t deliver a generic standard of pure excellence, rather, consumers experience very different levels of service and should be able to make an informed choice about the quality that they can expect. Many firms are not renowned marketers by their own admission and remain rigidly stuck to the traditional model of waiting for a death notification from a will bank or a recommendation from an existing client. If setting a high bar through membership of an accreditation scheme or of a network allows firms to market themselves as specialists to win the trust of the consumer and follows that through with first class service, then I for one am in
favour.
Firms are beginning to come forward and ask for support. Some are looking at ways within which they can broaden the support and service for their clients, focussing on internal efficiencies and striving to have some meaningful effect on external influences. Others, who have made real progress with change, are now looking at improvements in traditional and digital marketing routes, so as to highlight themselves for worthy consideration to the consumer. Either way, I am excited about what the future will bring and look forward to strengthening existing relationships and building new ones.
Daniel Hamilton-Charlton
Business Development Manager
Move with Us Law Firm Network
For further information and to discuss commercial arrangements for our services, please contact us.
DDI: 01480 409444 E: [email protected] Web: www.mwuplc.co.uk