An American Law Firm in London

A recent survey by The Lawyer (see table) shows that US-headquartered law firms are making significant headway in the London market. The two most eye-catching data points are that, today approximately half of the 50 largest City of London firms call the US home and that four of the largest 15 firms in the City are names that, ten or fifteen years ago, many UK clients might not even have heard of. What are the branding issues that these firms will face in gaining further traction, and how should these and other US firms looking at London think about market positioning?

Reports of my death are much exaggerated

Despite the significant revenue growth many US firms have seen in London, even the biggest — Kirkland — is not yet even half as big as the Magic Circle firms are in the City, and the largest UK firms continue to grow in a way that belies any sense that they are feeling disruptive commercial pressure. Indeed, in terms of US-firm dominance, the UK legal industry has always been an outlier compared to the other professional services sectors.

When it comes to accountancy, investment banking and management consultancy, the once-dominant and independent UK firms have long since been acquired, merged or simply driven out of business by the more aggressive and dominant US firms. Whereas, the brand names of the top five City of London law firms today have been around since Charles Dickens was churning out copy for his serialisation of The Pickwick Papers.

Four of the largest 15 firms in the City are names that, ten or fifteen years ago, many UK clients might not even have heard of

The UK firms, given a little breathing space by structural features of the legal market and a great deal of momentum by the strategic foresight of former leaders, have not only survived, they’ve led the globalisation charge themselves. The big UK firms expanded internationally, in numbers, before the Americans came to town. They established large and high-quality networks (almost everywhere apart from the US) using more or less the same playbook as the US management consultants and investment banks did, merging local country partnerships into their business model in return for quickly transitioning to a single global brand name.

This gave them much more resilience as the US firms began to operate in London, being able to offer UK clients a seamlessly integrated offer across many international jurisdictions before many of the US firms had even stepped outside of the US mainland. White and Case, Mayer Brown, Cleary and Baker McKenzie being notable exceptions.

The same UK firms also began to invest in building strong international brands ahead of the US firms — thinking about things like clear global market positions, perceived differentiation and internal cohesion around their marketing strategies — so that by the time the US firms started arriving they stood head and shoulders ahead of the Americans in almost all non-US markets with consistent and clear’ market-leading’ brands.

This has served the UK firms well until now, and in many ways continues to serve them well. This makes the challenge the US law firms face much harder than their predecessors like McKinsey and Goldman, who faced off in London against relatively small, mostly national players who were frankly taken a bit by surprise by the heat of competition.

With acquisitions and mergers illusive at the top level, US law firms must build their market shares organically. This raises at least three key brand marketing challenges to think about: brand awareness, brand of origin perceptions and brand relevance.

Who did you say you’re from?

One of the often more surprising marketing hurdles to overcome is that most UK clients are so overwhelmed already with premium law firms that they can barely remember much about the UK firms they’ve grown up with, let alone have room for new ones who appear seemingly from nowhere. It can be a little disconcerting for those partners who have grown up with a door-opening establishment name on their business card to find that their firm name doesn’t even register a flicker in many circles.

With acquisitions and mergers illusive at the top level, US law firms must build their market shares organically.

Of course, this varies by individual, sector and client institution but I’m often reminded in my research that beyond the bubble of the legal industry, most clients, even those who deal with law firms day in day out, often know little if anything about more than 4 or 5 firms. And that’s at nothing more than name awareness. Even when they know the name, their level of knowledge beyond that is often shallow and extremely outdated.

There’s no quick fix to this, but the first step is to get a genuine understanding of where you start from in the sectors you are targeting and build a focused and realistic plan to build targeted awareness of your firm and the very beginnings of your story. Gathering the evidence itself can also be useful internally because back ‘at home’ it can often be hard to believe that “a firm as prestigious as ours should be investing in something as grubby as name awareness.”

Born in the USA

When clients do begin to scratch the surface of your firm’s brand one of the issues that will quickly come up is ‘country of origin’ which is a powerful force in branding; it’s an inherent part of any story and us humans are storytelling animals underneath the business uniforms.

Think about the more obvious examples. BMW sells cars that might be designed in the UK, manufactured in Brazil and sold in the US; nevertheless ‘German engineering’ is a big part of the BMW brand proposition and the values we buy into as customers. Fiat, on the other hand, doesn’t tend to put so much emphasis on being Italian because, fairly or unfairly, the idea of ‘Italian engineering’ doesn’t have the same positive brand connotations.

A good illustration of the power of country of origin for a global brand in the other direction is Hugo Boss — another German-owned brand; only ‘German fashion’ doesn’t have the same ring to it as ‘Italian fashion’. Armani can play up its place of origin, Hugo Boss hides its.

When we think about a law firm we’ve only just discovered, instinctively, and even unconsciously, we think about where it comes from, as our brains try to navigate the very crowded’ shelf’ in front of us. Not to ‘accept’ or ‘reject’ but more in a way to’ tag’ it.

Goldman Sachs and McKinsey, as brands, are as American as BMW is German and they don’t particularly try to get in the way of it because most of the connotations are positive.

Then, in simple terms, just as ‘German engineering’ is a broad, amorphous concept that varies by individual brand there are nevertheless some consistent themes that are’ tagged’ — in the case of ‘US law firm’ ideas like: they’ll do business in an “American” way, they’ll be quite aggressive, they’ll be high-quality lawyers, they’ll probably charge high fees and want to do high value work, the individuals on the team might change (rotations and lateral churn), they won’t be as familiar with ‘London ways’ good and bad, they come from a mainly singular jurisdiction unlike the patchwork UK/EU system.

None or all of these stereotypes are necessarily true or fair, particularly when Brits and other European lawyers increasingly staff the firms, and while some might be barriers, others can be extremely advantageous in brand marketing terms. Goldman Sachs and McKinsey, as brands, are as American as BMW is German and they don’t particularly try to get in the way of it because most of the connotations are positive. But you can bet when they go to meet UK civil servants in Whitehall to talk about public sector projects, they tend to try and tone it down a bit.

So, what should US firms do? First find out what the generic client perceptions of a’ US law firm’ are among the client groups you are targeting, and then adding on top what you know or can work out about any specific perceptions they already have of your firm, develop a strategy around which you can tell your story to the market.

What’s so special about you then?

The third big theme to think about is brand relevance; what’s distinctive about your offer that means clients should consider you for their legal work in a particular area, even though they are most likely perfectly well served by any number of incumbent law firms already?

Again, it’s a good idea to get some good client insight to avoid guessing, and hopefully, some of the assets you bring to the table will come from the US; market-leading strengths in particular sectors, experience with similar clients maybe even bigger clients that they will respect. And this is where you can also incorporate some of the country of origin brand ‘tailwind’ into your narrative as long it seems authentic.

For example, Quinn Emanuel, the litigation specialists know that US litigators have a brand all of their own that fits well with their natural style. So without having to do very much at all, they start with a good set of expectations — a good brand ‘tailwind.’

How many more ‘top tier’ firms can London take before the top tier calves like an iceberg into different parts?

Here at the marketing end of the sales funnel — just getting on the consideration list — there’s not much space for details, only simple, powerful hooks that aim to catch attention not necessarily convert a sale (which comes much later and involves space for many more details).

The ideal scenario is to develop a brand strategy that weaves a path through all of these three themes at the same time — so you have one consistent ‘go-to-market’ brand strategy, not many. The plus side of being relatively unknown is that you start with a blank canvas; a chance to introduce yourself as you’d like to be known.

Then by layering on some positive aspects of the country of origin perceptions that you discover, you can turbocharge specific themes because they already exist in the clients’ minds. And finally adding in the particular sector and market relevance points that your firm can bring to the table.

Like all aspects of premium professional services branding, it’s a subtle business. Standing out from a very high-quality crowd isn’t easy but done well, a strong brand marketing narrative can help build a sustainable platform for your firm that can be built on incrementally year on year.

Looking ahead

Who knows what will happen next? Will all the US firms in London go further or will some rise up as others fall back? How will big and quite big UK firms respond? Will the US firms penetrate beyond the more ‘global’ sectors? Which ones will do this best? The leaders today have some advantages, but how many more ‘top tier’ firms can London take before the top tier calves like an iceberg into different parts? Interesting times.

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