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Two years ago the bar rules in Germany changed and a transformation in the German market began.
Claudia Schieblon describes recent developments.
Over the last few years the law firm market in Germany has changed dramatically. There are a number
of reasons for this:
German law firms have had to keep pace with the needs of their clients, who are increasingly
international and so need international support. To retain good business links firms have had to
become like their clients, geographically as well as in their skillset. They are in direct
competition with other international law firms, who are also professional and pro-active in
their approach.
Foreign firms have set up successful practices in Germany. The European Union has made it possible
for international firms, mainly British and American, to expand and set up offices in Frankfurt,
Berlin and Dusseldorf. Marketing tools like brochures, client seminars and press releases have
set new standards in going for new business. Lawyers are even prepared to participate in beauty
parades - a concept previously unheard of in Germany.
International accountancy firms like KPMG, PricewaterhouseCoopers and Arthur Andersen who
already have long-standing working relationships with many companies have established legal
departments or subsidiaries to offer clients additional services. Cross selling as a strategy
has always been highly successful.
The number of lawyers in Germany is growing rapidly. In January 1997, there were around 85,000
lawyers, by 1998 there were approximately 91,000. In spring 1999, the 100,000th lawyer will
leave university. Often when lawyers cannot secure a position with a law firm or as internal
legal counsel for a company the only option is to start up their own practice.
In spring 1997, the bar rules changed and gave law firms the opportunity to actively promote their
services. They were permitted to advertise, produce brochures and direct mail clients. However many
limitations remained strongly in place. Firms are still not allowed to actively seek new instructions
and cannot publish their annual turnover or a list of clients without their prior consent. There are a
number of grey areas in the bar rules. If a marketing activity has not been specifically mentioned,
firms are unsure if they can use it and remain within the guidelines. So lawyers work on the periphery
of these rules. They send newsletters to potential clients, print T-shirts and use poster and radio
campaigns to promote their firm's profile. Competitors and local chambers strongly protest the
testing of boundaries in this way but are not always successful.
Most frequently firms promote themselves through the use of brochures. Approximately 50-60% of
firms have a company brochure, most of them bland and fairly indistinct. They incorporate the
firm's history, partner biographies along with the stock head-and-shoulders photos, areas of
expertise and a shot of the firms premises. There is nothing out of the ordinary, no slogan,
no memorable design and no reason for a client to use this firm rather than any other. When
producing a brochure, although firms use both agencies and in-house marketing staff, coming
to a reasonable compromise which all the partners agree with can be a problem. A brochure often
ends up wandering from table to table, where every partner 'helps' to improve it.
Another widely used marketing tool is the World Wide Web. Around 300-400 firms already have web sites.
This figure increases daily. Most of these sites are simply a digital version of the company brochure,
but use of the Internet is seen by many as a big step for legal firms who are not acclaimed trendsetters
in the world of technology.
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Lawyers have almost always used marketing tools common to their profession - seminars, conferences
and professional publications. Law firms have recently started to use press releases, commercial
seminars and special client events. They realise that events do not necessarily have to be based
around the law. An evening with a live classical quartet, or an oriental storyteller, with a
glass or two of wine is a pleasant change from an informal meeting at a firm's office.
Public relations agencies have eagerly grasped the opportunity to target new business in the legal
arena. Expert marketers are common within agencies but there are very few in-house in law firms -
few lawyers are willing to trust an external agency with their firm's image. The agencies find
it difficult to understand the obsession which legal firms have with status and image, and the
lawyers are reticent to allocate large budgets to marketing plans which they see as excessive
and encompassing as yet unproven ideas.
Last year at the annual lawyers' congress in Cologne 'professional marketing' was the sole topic for
a two day event. More than 200 lawyers attended. Awards were presented for the best firm brochure.
Events like this are fundamental to assist lawyers in their understanding of professional marketing
and the benefits of it to their firm. Christiane Decker, marketing manager at Feddersen Laule
Scherzberg & Ohle Hansen Ewerwahn Finkelnburg & Clemm attended the conference: "Here lawyers
are given basic marketing knowledge. It's the first step for them. Our firm works on an international
basis and has to develop much quicker to keep pace with European standards".
Christine Decker is one of a rare breed. There are three general marketing structures within law
firms in Germany. The first group do not have any organized marketing. Partners make every marketing
decision. There may be 25 senior partners who have to be consulted on something as small as a legal
directory entry. This is the norm for firms with up to 30 partners. The second group has a partner
responsible for marketing who is supported by a secretary. These partners report and represent partner
views in regular marketing meetings. The majority of larger German law firms have adopted this approach.
The last group employs an in-house qualified PR person. These individuals are quite difficult to find.
Approximately 10% of the biggest 50 firms have recruited a marketing assistant within the last two
years, a trend that will continue. Punder, Volhard, Weber & Axster, an international law firm,
was the first firm to establish a marketing department. Their marketing director, Stefanie Hoogklimmer,
heads a team of four. She reports to the board but is also responsible for the day-to-day running of
the department. "Professional services marketing in Germany will develop very quickly but I don't
think it will be quite as brash as the American model where lawyers place ads on the subway or on
buildings".
And what about the future? What form will professional service marketing take in Germany? Law firms
who practice internationally will certainly need to get up to speed very quickly to compete effectively.
The most problematic issue is delegation of marketing to specialists, either in-house or externally.
Partners first need to agree on a marketing plan - difficult when the German market has few guidelines
to follow. For partners, information on how professional services marketing works is going to be
heavily in demand.
Some smaller firms may develop more slowly as they are benchmarking themselves against a similar size
of firm in the same town. On the other hand, some small firms may turn out to be more progressive as
they do not have to worry so much about their reputations.
We don't know if we will develop into award winning legal teams, with ranked lists of published gross
fees and profit per partner. Germany will want to keep its own cultural identity. Professional
services marketing will allow firms to grow and, hopefully, to realise that the difficulties of
setting up a marketing team is worth every penny spent.
Claudia Schieblon
Leitung PMN
Marketing für Anwaltskanzleien
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