This week personal injury claims firm Silverbeck Rymer was bought by AIM-listed Quindell Portfolio for an initial outlay of £10.25m. The move is one of the first of its type where an insurance company increases its service range by including PI within it by taking advantage of the new ABS legislation.
The news is of particular interest to legal marketers, because while the Quindell Portfolio does indeed have an expanding share of the insurance sector, it actually labels itself as a “brand extension company”, and the impact it could have on the sector was noted by Silverbeck Rymer chairman John Rymer: ‘Its (Quindell’s) positioning as thought leader, and belief in improving margins whilst lowering costs for the industry, sits well with our philosophies.’
At QWA we have predicted for some time that ABS is likely to lead to the creation of new players in the legal sector that are backed by strong brands and savvy marketers who will be extremely competitive on price due to the economies of scale, thus threatening the position and even the existence of some traditional law firms. The fact that a “brand extension company” has taken over an existing firm of legal specialists is particularly worrying for the current incumbents. It could form a very powerful marriage between sales and marketing and the service provider.
We have suggested in the past that traditional firms will be able to argue that they have greater experience and therefore offer a higher quality service than the new entrants, however in this case Silverbeck Rymer is already a specialist legal firm and will now be backed by a branding specialist: the worst of both worlds for their competitors, and possibly more so if they are able to reduce their price point yet further.
So what can traditional firms already in this space do? One option is to look for a branding specialist owner similar to the Quindell Portfolio in order to provide the financial clout and marketing know-how to make them more competitive. It’s quite possible a few will go down this route, whether through choice or because they find themselves in a position where it is their only option.
For those firms wanting to avoid this scenario and continue to flourish they will need to market themselves effectively, evaluating all they are doing right now and ask what is working for them and what resource could be allocated elsewhere. The bible taught us many things, and one that is relevant to this situation is that David did beat Goliath – but he had to be clever to do so. With all the new marketing media available to them traditional law firms certainly have the slings and the stones to do the damage, they just need the cunning to employ them effectively.
