Corporate & Securities Law

Law Firm Clients Going Generic?

By John Wallbillich

We have seen many stories of large-firm clients moving some work to smaller, lower-cost firms.

It turns out that this goes beyond corporate law and extends to cornflakes. The Economist
($$) drills into this issue and quotes Eric Anderson, associate professor of marketing at Kellogg School of Management, Northwestern University:

The study will alarm packaged goods groups, as the most loyal customers ? those choosing one brand for more than 70 per cent of their purchases in a category ? should also be their most lucrative.

?Defection is top of mind for brand managers now because they?re the most profitable customers…?

You could link that excerpt to convergence and ponder it for awhile. The good professor continues:

?Price and promotion have become so salient at retail, that what we thought was the loyal customer can be moved with discounts…?

“Past recessions have seen similar defections from top-tier national brands to stores? private-label goods, Mr Anderson said. Academic research showed that customers could be quickly persuaded to switch by a cheaper price but took far longer to switch back.”

Let’s assume for a moment that some of this retail phenomenon applies to professional services. My question is: will the flight work return to the largest law firms once the economy turns around?

My hunch: some maybe, most no. (The efforts of certain firms to hold on by giving discounts in consideration for future work is noted, but it will get a separate post.)

Certainly these so-called “branded” firms may have to try something different, marketing-wise, to make that happen.

One idea: how about this splashed across the firm home page?

Full post as published by The Wired GC on June 22, 2009 (boomark / email).