Legal Services – Planning & Marketing

When many lawyers think-or talk-about practicing law, they are considering a lawyer or a firm of lawyers who do what they themselves do or want to do for the same sort of clients. Actually, there are many kinds of law practices, providing a great variety of services for very different types of clients. Each kind of practice, and each kind of client, involves a different market for legal services, and different methods of delivery of services, office systems and fee collection.

Broadly speaking, the market for legal services can be divided into several categories, based on clients involved.

• Government
  
  
   
• Federal and federal agencies
• State and state Agencies
• County and local, and their agencies
• Business Organizations and Agriculture
   
• Publicly owned
• Privately owned
• Nonprofit institutions
• Labor Organizations
• Insured Claims
• Automobile-related claims
• Maritime claims
• Commercial and professional claims (this divides into several very different subcategories, including malpractice, products liability, fire, life, fidelity, aviation, construction, etc.)
   
• Individuals
   
• Criminals
• The poor and near poor
• The working class (white and blue-collar)
• The business class (this relates to II.B.)
• The rich
   
• Causes

Each category can be refined and subdivided, and each market segment requires a variety of legal services and specialties. Because so much interest is currently focused on the provision of legal services to individuals, we will first direct our attention to this market.

The Retail Market (Individuals)

Of the several broad categories listed, providing legal services to individuals is the one with the most promise for expansion of the current level of legal services. Business and government already have their lawyers, although they may be induced to change from one to another. Labor unions are having a hard time of it, and are unlikely to add significantly to their lists of lawyers, and insurance companies are internalizing legal work, although their needs will continue to be an important factor in the planning of private law firms.

For years, leaders of the legal profession have promoted the idea of providing broader and more frequent services to individuals, particularly to the middle class. Currently popular methods of providing services in civil law to individuals are prepaid services, principally of the employer-paid type, and legal clinics. Both are premised on the theory that middle-income people would use more legal services if they were affordable. Another method is through private prepaid legal insurance plans.

Concurrently, lawyers are actually losing ground in the provision of services to this very group. At one time, small-town and neighborhood law offices did much of the income tax return preparation for the blue collar and middle classes. Most of this business has been captured by accountants and tax preparation services. Real estate transactions have gone the same route. Where lawyers once searched and certified titles and conducted closings, the majority of transactions involving ownership of homes are now done by title or escrow companies without benefit of lawyer participation. In some states, even probating of estates is being invaded by non-lawyer organizations.

To know what services a lawyer can sell in a market, he or she must have an idea of what people want to buy. One needs to examine the market. Let's objectively consider the legal needs of the public.

The part of the public which most needs legal services generally cannot afford them. Poor people are the ones who most often are in trouble. They dispute with landlords over rents and service, their children may have problems with the police, the utilities threaten them with shut-offs, and they need help in coping with the governmental bureaucracy. Helping poor people comes under our heading of "causes." Helping them may be part of one's political, social or religious strategy but it is not a business strategy for most lawyers, except for a few who cull out contingent fee cases.

If you want to compete for the legal business of the poor, the major problems will be: (1) to establish a relationship of trust with the group, and (2) to avoid taking on so much unpaid and underpaid work that you don't have time to give to the accident cases that will provide your livelihood.

Let's turn next to the working class. This group of people ranges from the factory worker with a high school education (or less) to the college professor with a Ph.D. It includes the vast numerical majority of Americans.

Lawyers and their associations have long been convinced that this huge group of consumers represents a vast, untapped market for the services lawyers provide. In the sixties and seventies, lawyers devised the "Annual Legal Checkup." This service was supposed to lure new clients into law offices for a careful analysis of their needs, followed, of course, with more business for the lawyer in meeting those needs. The trouble is that, while people may go to a doctor for a checkup even if they don't feel ill, few have any feeling of need to see a lawyer regularly. It turned out that the Annual Legal Checkup was wishful thinking on the part of some lawyers.

In the seventies, lawyers came up with another new idea, "The Unmet Legal Needs of the Public." These needs, never documented, were to be met through prepaid legal service insurance and in other ways. There probably are some unmet legal needs among the public, and there probably are ways of providing the services, but many of the programs that are being developed are aimed more at helping lawyers than at helping the masses.

The odds are that unless a couple wants a divorce, a family's only need for legal services will be to write a set of wills. If one of them is injured in an accident, the case will be accepted by a lawyer on a contingent fee basis, and without a prepaid plan. If they are sued as a result of being in an accident, they already have prepaid the defense through an auto or homeowners' policy. If the husband or wife gets into trouble at work, the union will provide representation, and the chances are that if one of the children gets into a bit of trouble, a local politician will intermediate the first time unless the matter is very serious.

The fact is that most of Middle America does not need a lawyer most of the time!

Lawyers who charge a fee will always compete unsuccessfully with free or prepaid services, such as those provided by labor unions, the clergy, politicians, school counselors, and "friends." Only those problems the lay public perceives as requiring the expensive individual help of a lawyer will be brought to a law office-unless, of course, the law office is added to the list of free services through a prepaid legal plan.

Marketing strategy to reach the working class must be broad enough so that on that rare occasion when an individual really perceives a need for a lawyer, the path will lead that person to the law office (at least some of the time).

The most important point is to realize that most individuals hardly ever need a lawyer, and when they do, it is on a one-time basis.

The same generalization does not apply to the remaining two segments of the public: the business class (including farmers) and the rich. People in business and people with property need lawyers often. Consequently, the competition for their business is more direct, and the strategies for reaching them are quite different. These groups are not candidates for prepaid legal service plans, nor will they be the primary customers of legal clinics. They are the targets of most lawyers' marketing plans.

The Business Class

North America has a very large independent business class. It includes a diversity of enterprises, including farming, surgery, small manufacturing, mining, retailing, janitorial services, publishing, oil drilling and law practice. The majority of wage earners are employed in small businesses. Business people (including farmers, doctors, and other entrepreneurs) do need legal services-regularly. If there is a large reservoir of unmet needs for legal services, it may be in this group.
Many small-business people depend on their accountants for legal advice or to tell them when they need a lawyer.

Business people need accountants all of the time because the accountants prepare the tax returns and various payroll reports. Therefore, the accountant tends to become the tax advisor and the legal advisor, at least in a preliminary sense. Accountants are asked questions such as: Should we incorporate? Should the branch be a separate business? Do we need a written agreement? Of course, smart accountants call in lawyers when they think that legal services are needed. But accountants are generally reactive. They rarely initiate questions leading to legal work, and many business people are unaware of these questions. Therefore, there is a need among business people for legal services, particularly in areas involving tax planning, liability, business formation, and the like.

This is an important market and one which can pay properly for good services.

Let's turn to the other broad markets, in the order of our list.

Government gives rise to a fair amount of legal work. There are part-time lawyer jobs at the local level which are an important component of the work of many small-town and suburban law firms . There are independent agencies, each with its legal needs, such as school districts and zoning boards.

The legal needs of government are generally being met, and the competition for providing the service is constant. Although there is some growth occurring in the legal work of government, it is no longer a major growth area.

Public corporations have been increasing their use of legal services at a rapid rate. In the seventies and into the eighties, their needs fueled the largest growth ever experienced in the ranks of the legal profession. As previously pointed out, these needs are now, at best, constant-not growing-and the high cost of legal services has gained attention from corporate management. This is an important market, but no longer one experiencing the heady growth of past years.

Some corporations are trying to internalize more legal work. Several casualty insurance companies are now defending claims with staff lawyers. While in a few cases these programs will save money, it is unlikely that important cases will be tried with internal house counsel. What companies are internalizing successfully is more of the routine work and more of the research and preparation-work that can sometimes be accomplished by well-trained legal assistants and less experienced lawyers.

Labor organizations generally have a relationship with lawyers who are regarded as sympathetic to their cause. Labor counsels are a tight-knit group. These lawyers often branch out from labor law problems into providing personal services to union members. Prepaid legal service plans often involve lawyers from this group.

It is not an easy group of specialists to enter. The path is usually through affiliation with an established practitioner, or through a personal (or family) relationship with union leaders.

Labor unions are not a monolithic entity. A lawyer who is favored by certain unions may be anathema to a group of unions with a different point of view. Work with the UAW won't necessarily open the door at the Teamsters.

Insurance companies pay out the largest block of legal fees of any definable user group. Large insurers pay legal fees in tens and even hundreds of millions of dollars per year. There are some certainties in doing insurance company work, particularly for casualty companies: (1) you always get paid, (2) payment may be delayed as long as possible, (3) you must account for every minute you spend on a matter, (4) getting the lowest hourly rate will be a matter of great interest to the client, and (S) you must report back often.

Auto accident claims are the volume end of this business. This is a great place to start a career. There are higher paid insurance cases involving malpractice, products liability, fire claims, and other problems where the issues are more difficult, and the amounts involved may be larger.

The other insurance areas--maritime, aviation, life policy cases, and the like--are quite specialized, and consequently more difficult to enter. Such cases tend to be substantial, and the fees charged are more like fees in other commercial and corporate work.

Causes include any type of case in which the social role of the lawyer is of greater importance than building the practice or earning a fee. Yet, the undertaking of causes, especially if they are highly visible causes, can be a significant part of a general business strategy. The leading example of a cause-oriented law firm is Boston's venerable Hale & Dorr. Hale & Dorr's lawyers defended Sacco and Vanzetti, provided counsel to the U.S. Army in the McCarthy hearings, and counseled President Richard Nixon in the final days of his Watergate problems.

Some lawyers make a cause a career, and more than one has earned a seat on the United States Supreme Court that way. Many other lawyers support a cause, ranging from the local symphony board or charity to the defense of demonstrators with unpopular politics. For most lawyers, such endeavors are a matter of personal pride or conscience, not economics.

The emergence of class action litigation has made dedication to a cause a financially rewarding experience for some lawyers. But one cannot count on that when establishing a career dedicated to helping a cause.