The Business of Personal Injury Law Practice

The Most Effective, Least Expensive
Way to Market Your Practice:
Part I
William L. Speizman
If you and I were having coffee during a break at an MAJ meeting and I asked you, ”What’s the most powerful marketing tool for building your practice,” what would you say?
If I asked business owners from a variety of industries other than law, “What’s the most powerful marketing tool for building your company,” I know what they would say: word-of-mouth referrals and repeat business from current and former clients. Many of those business owners would hasten to add that it’s far less expensive to generate revenue from an existing customer than it is to acquire a new one.
       Virtually all of the personal injury attorneys with whom I’ve worked have assured me they get word-of-mouth referrals and repeat business from current and former clients. Conversely, not one has reported he or she is putting on a full court press to maximize them.
In fact, it seems members of the plaintiffs bar are unaware that actively and systematically pursuing word-of-mouth referrals and repeat business is a marketing effort in and of itself.
Certainly, personal injury attorneys give business cards to clients and tell them to “Remember me if you or your friends get injured.” But that’s a drop in the bucket compared to a full blown strategy to maximize word-of-mouth.
       In this column, I’ll review seven reasons why you should engage in word-of-mouth marketing: four advantages of word-of-mouth cases and three benefits of marketing programs designed to maximize them. Then, I’ll present an example of the efficacy of word-of-mouth marketing in personal injury practices. In my October column, I’ll highlight the most important ingredient in a word-of-mouth marketing program and lay out steps for implementing one in your practice.
Four Advantages of Word-Of-Mouth Cases
1. Better Quality Cases. Most personal injury attorneys report that their best cases, or a substantial portion of their best cases, come from client word-of-mouth referrals and repeat business.
2. Better Quality Clients. Most personal injury attorneys report that compared to clients acquired through mass media advertising, clients referred by other clients are less likely to be troublesome and cause problems.
3. Better Case-To-Call Ratio. Most personal injury attorneys also report that they need to screen fewer client referred new case calls before identifying a case they want.
4. Better Disposition Of Fees. Referral fees need not be paid on client referred cases. (I’ll provide an example of the substantial difference this can make in a moment.)
Three Benefits of Word-Of-Mouth
Marketing Programs
1. Lower Cost. Compared to yellow page and television advertising and sophisticated Internet marketing, word-of-mouth marketing programs are relatively low cost.
For example, one of the law firms with which I’ve worked spent 91% of its marketing budget on yellow page advertising and 9% on word-of-mouth marketing. During a six month study of the profitability of the law firm’s marketing efforts, their yellow page advertising cost-per-case was $714.28, while their word-of-mouth marketing cost-per-case was less than a quarter of that amount. What’s more, despite a much heavier investment, their yellow page advertising campaign produced fewer cases than their word-of-mouth marketing program.
2. Exclusive Access. All of the attorneys with whom you compete have access to everyone in your service area through television, yellow page and Internet advertising. On the other hand, you have exclusive access to the individuals on your list of current and former clients. (True, your clients move a lot, but even on a first time mailing to names up to five years old, my experience has been that no more than 40% of your list will be lost due to bad addresses.)
3. Client-Base Defense. Like any other competitive sport, if you want to be a winner in the game of marketing, you have to play defense as well as offense. A word-of-mouth marketing program allows you to defend your client base in two ways.
First, keeping in touch with former clients long term, a key ingredient in word-of-mouth marketing, lessens their susceptibility to your competitors’ advertising. Consequently, it increases the chances that former clients will return to you with subsequent causes of action.
Second, competition for clients with high-quality cases doesn’t necessarily end once they’re signed up. Though unethical, some competitors may try to lure clients away and take over their cases. But it’s more difficult to entice a client referred by another client than a client secured through mass media advertising. That’s because, by switching, a client would not only be slapping your face, but also the face of the mother, cousin, friend or co-worker who referred them. That’s a lot more difficult to do.
       Those are seven reasons for employing word-of-mouth marketing in your practice
But Does Word of Mouth-of-Mouth Marketing Produce Results?
The following case study demonstrates what word-of-mouth marketing can achieve in a personal injury law firm.
In the Spring of 1993, the partners in a two-month old law firm implemented a word-of-mouth marketing program. The two attorneys had begun their law firm with a special advantage.They had been allowed to take with them the cases on which they were working when they struck out on their own. Their only obligation was to reimburse the case costs advanced by their former employer. The cases they brought with them furnished the partners with cash flow almost from the moment they opened their doors. It also gave them a client base with which to begin their word-of-mouth marketing program.   
The two attorneys were committed to building their law firm without advertising, and during the nine years I monitored their progress, with their permission, they did not stray far from that path. They never advertised on television, and they made only two forays into the yellow pages.
In 1997, they placed a half page ad in a suburban yellow page directory. It failed and they did not renew it. Two years later, they affiliated with a law firm in a city about fifty miles away. They began advertising in the yellow pages in that city, but their ads solicited only workers compensation cases not personal injury.
Despite not doing any advertising, the partners garnered a steady stream of cases thanks to their word-of-mouth marketing program. Most notable were the seven million dollar cases they signed up and settled in their first nine years in business.
Their first check in a million dollar case arrived in March of 1995; it was for $1,100,000.00. That was twenty-four months after going into business. Subsequently, they received checks for $2,150,000.00 in September of 1997; $1,000,000.00 in September of 1998; $5,900,000.00 and $1,400,000.00 in May of 2000; $990,000.00 in December of 2001 and $1,050,000.00 in February of 2002. Those checks totaled $13,590,000.00 and resulted in fees for the law firm of approximately $5,430,000.00.
All seven million dollar cases came from client word-of-mouth referrals and repeat business. So the partners paid no referral fees and saved more than $1 million.
Still Skeptical?
If you remain unconvinced of the power of word-of-mouth marketing, I’ll end with the story of what an indigent author achieved as the twentieth century drew to a close and how she achieved it.
In 1994, a single mother moved to Edinburgh, Scotland and went on welfare. She had a four month old daughter and a dream. At times skipping meals so that there would be enough money to provide for her child, she began writing a story. When she completed her manuscript, she submitted it to six publishers, all of whom rejected it.
She searched for and found a literary agent who understood what she was trying to accomplish. The agent submitted her manuscript to three additional publishers, two turned it down and the third agreed to publish it.
However, that third publisher gave her book only halfhearted support. They printed a minimum number of copies and released them to bookstores without publicity or marketing. It was a children’s book.
Notwithstanding the lack of backing from the publisher, a few kids spotted the book on store shelves and bought it. Perhaps they were attracted by the design of the cover or intrigued by its title. They enjoyed the book so much that they told their friends and schoolmates about it. Their friends decided to try the book for themselves and went to bookstores to purchase it or had their parents pick it up for them.
The publisher began receiving reorders and printed more. This led to more playground and schoolhouse chatter and more reorders from across the country. 
Joanne Rowlings, the author of the book, is better known today as J. K. Rowlings and the book she wrote in a coffee house in Edinburgh while her baby daughter dozed beside her was Harry Potter And The Sorcerer’s Stone.
Before the fourth Harry Potter book was published, Joanne Rowlings had become the wealthiest woman in Great Britain surpassing the previous holder of that title Queen Elizabeth II.
Coming in November: How to implement a word-of-mouth marketing program in your practice.
EDITOR'S NOTE:  If you have a topic you would like Mr. Speizman to discuss, please contact him at 
© 2008 William L. Speizman
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