World's Top 50 'US' Law Firm Brands 2019

World's Top 50 'US' Law Firm Brands 2019

HIGHLIGHTS

  • Kirkland & Ellis retains dominance as the world’s most valuable law firm brand
  • Kirkland also biggest gainer in brand value (absolute and relative)
  • White & Case enters the top 10 and is the biggest riser in top 30 places
  • Arnold & Porter biggest riser in top 50 places
  • Baker Botts biggest faller in top 50 places and brand value
  • 18 firms grow brand value by more than $100m
  • Average top 50 place gain worth $38m per annum to firm

Ranking the 50 most prestigious US-headquartered* firms by their ‘global partnership profits’ gives a rigorous and substantive basis for assessing their relative brand strengths (see ‘economics sidebar’ below).

Kirkland and Latham are the world’s most valuable law firm brands closely followed by Skadden.

*Due to the different result publishing cycles, the largest UK-headquartered firms are not included in these rankings. Based on previous figures the four Magic Circle firms (Linklaters, Clifford Chance, Allen & Overy, and Freshfields) would feature in the top 10-15 along with Herbert Smith and Slaughter & May at around the top 40 mark. When data for these firms is published, in September, we will revisit the rankings in our Global Top 50 rankings.

According to this analysis, Kirkland and Latham are the world’s most valuable law firm brands closely followed by Skadden.

The top 5 firms have remained in precisely the same relative positions over the two years (2017-19), while the rest of the top 10 has seen more movement.

This analysis also highlights Kirkland’s phenomenal growth, even relative to its peers. The firm’s brand has grown in value between 2017 and 2019 by as much as the rest of the top 5 firms combined ($694m vs. $612m). Despite its size, Kirkland is also the highest relative growth firm in the top 50 – growing in brand value by 47% in two years.

Another way to highlight the scale of this performance is to consider that Kirkland has added the value of a whole Paul Weiss – or two whole Shearman & Sterlings – to its brand in just two years.

Latham & Watkins would be the star of the show if it weren’t for Kirkland, having gained $261m over the two years, making it comfortably the second biggest gainer in the top 50 and, like Kirkland, pulling away from the pack of following firms.

On average, each place gain in the top 50 rankings is worth $38m per annum in additional overall profits to the firm.

White & Case is the biggest riser in top 30 places and enters the top 10 for the first time (replacing Quinn Emanuel) and is also the 3rd biggest gainer in brand value overall at +$207m.

Arnold & Porter is the biggest riser overall in the top 50 in terms of places – rising nine places – with a substantial increase of $114m which comes a close second to Kirkland in terms of relative growth at 43%.

Baker Botts has suffered the biggest fall in relative brand value of all the top 50 firms, falling 16 places overall and losing $118m in value. The firm had a much better year, last year, and hopefully will look forward to making up ground lost to other firms in the coming years. The other two firms that suffered falls in place rankings are Cleary (falling six places) and Atkin Gump (falling five places).

Another substantial finding from these results is that 18 firms in the top 50 added more than $100m to their total partnership profits (and hence their relative brand value) across the two years, indicating that the field is still highly competitive and that many firms are moving forward in strides. It will be interesting to see if this broad sharing of gains is sustained in the coming years or whether the increases become concentrated among a smaller group.

On average, each place gain in the top 50 rankings is worth $38m per annum in additional overall profits to the firm. This figure demonstrates the enormous potential commercial benefits available to those firms that can develop strategies to enhance their global brand reputation, relevance, and visibility in the market.

These three components added together comprise a firm’s ‘brand,’ arguably the only source of sustainable competitive advantage that a law firm has.

Economics sidebar – why total partnership profits are a good measure of relative brand strength in Big Law.

The key to this insight lies in the underlying dynamics of the global law firm market which although quirky in many ways is, in economic-theory terms, a reasonably frictionless or ‘pure’ market (lots of competitors with relatively low market share, low barriers to entry/exit, similar products and excellent price visibility).

In other sectors profits can be heavily influenced by ownership of critical IP (pharma), regulations and licences that thwart competition (telecoms), assets that bar entry (energy), effective monopolies or oligopolies (big tech), etc. none of which applies in any significant way in the premium legal market.

Firms only succeed commercially over time if they compete effectively year in year out for what they earn and because the purchase cycle is relatively short clients can react quickly to any perceived changes in the relative competitiveness of any one firm.  

Being a relatively ‘pure’ market, individual firms (and their partners) compete based on 3 components: reputation (what those who’ve experienced you think about your service), relevance (what problems you’re perceived to be best at solving and where geographically you solve them) and visibility (how well known you’re known to the clients around the world who have those problems – and the budgets to pay for your services).

These three components added together comprise a firm’s ‘brand’ – the combined brand equity of the firm and the partners within it (who also have brands of their own) – arguably the only source of sustainable competitive advantage that a law firm has.

It’s useful to point out that being a ‘stronger’ and more valuable brand overall does not necessarily imply being a ‘better’ brand for every occasion. For instance, the Mercedes brand is regularly measured to be approx. 10 times as valuable as the Ferrari brand in surveys ($50bn vs. $5bn). 

PATH TO GROWTH?

Staying super-focused on existing markets and clients and fending off competition for premium work is hard, as is entering new markets and building a reputation for quality there. Doing both simultaneously is exponentially more challenging and without a strong brand impossible.

As law firm leadership teams know only too well, profitable, non-dilutive growth is highly elusive, and the market forces at work appear to be contradictory, making internal messaging complex let alone external ones.

On the one hand, communicating a message to partners and teams around raising profitability through a focus on doing more of what you already do best, billable hours, efficiency, etc. On the other hand, communicating the need to make targeted investments for future growth, which inevitably means doing things you don’t do as well, in places you’re less well known and for clients who may not know you very well, if at all. This means investing heavily in non-billable marketing and business development activities (including bringing in laterals).

Hats off to those executive teams that can communicate that lot in simple, coherent terms to a bunch of independent-minded partners spread around the world! Despite the challenge, some leading firms are managing to do both and build stronger global brands as they do it – these are the firms leading the rankings.

A CLOSER LOOK

Digging into the rankings a bit deeper there are some interesting observations:

In terms of strategy, three models appear to be the most successful:

Brands that can sustain 100-150 partners working on premium work, mainly from New York.

Brands that can sustain between 300 and 400 partners focused on premium work from a larger group of commercial centres (including at least one of New York or London and increasingly both).

Brands with closer to 1000 partners, more geographically spread but making a good average PEP.

Right now, the most successful brands are in the 3-400 partners group but with three 1000-types (Jones Day, Morgan Lewis and Baker McKenzie) holding their own in this company.

WHAT NEXT?

What does this analysis imply in terms of the questions leadership teams should ask themselves about the role of brand in future growth strategy?

What brand strategy will most effectively help us grow our ‘overall distributable profits’?

Can we trade up by targeting a more premium level of work that generates higher PPP? What will it take to achieve this, what are our sources of competitive advantage, and how do we market this effectively?

Can we build out by expanding our brand to be more relevant to more clients? What will it take to achieve this, what are our sources of competitive advantage, and how do we market this effectively?

Can/must we do both at the same time?



Ian Stephens

CEO and Founder of Principia, the world's most experienced branding and innovation consultancy for professional service firms.



The ideas factories

The Ideas Factories

KPMG just announced the imminent opening of their impressive new (and enormous) learning and innovation hub, charmingly called Lakeside in Orlando, USA. This comes on the heels of a rash of massive real estate investments in so-called digitally-orientated, ‘innovation hubs’ of different flavours from big tech and consulting firms. IBM recently announced a substantial new AI centre in Albany, New York, and Accenture is getting close to opening its new Hudson Yards facility in Manhattan that will accommodate more than 3000 of its New York employees along with troops of its clients and other collaboration partners. The list is seemingly endless, and although these are all in the US, this phenomenon is being played out around the world.

Sure they ‘did’ digital but their brand reputations in tech were built on IT systems integration

What these and many other similar facilities have in common is their objective – pushing the brands of these tech Titans of the noughties right to the front of the pack when it comes to digital innovation and transformation in the 2020s and beyond.

For a while, these companies were left lumbering in the starting blocks when the global economy pivoted rapidly towards digital. Sure they ‘did’ digital but their brand reputations in tech were built on IT systems integration; installing big computer hardware and software upgrades. Then along came the nimble, digitally-supercharged, disruptors – many from Silicon Valley – who showed the world that a far more rapid, start-up-based attitude to innovation was required. To “move fast and break things” as Facebook’s motto puts it.

One of the challenges of managing the brand reputations of professional service firms is that reputations change slowly, or not at all – in the absence of a major negative news event. That can be an advantage if the world around you also changes slowly, but when sentiments shift rapidly it can be hard to respond effectively. At first the natural temptation is to hunker down and hope that it’s a flash in the pan and that “normal service will be resumed”. By the time the data starts to show there’s a brand problem the scale of the response required can appear a little overwhelming. However, by taking a strategic approach, and treating branding as a strategic investment as important as any other, even the biggest firms can fight back.

These centres symbolise the new ways of working that the modern digital economy demands

Despite their size, these new centres are as much about brand symbols as they are substance (they are also a lot of substance, there’s no doubting that). Taking 3000 people out of their Accenture offices, with Accenture cubicles, and Accenture coffee and thrusting them into a more porous, shared, open environment where they’ll not only bump into non-Accenture collaboration partners by the water cooler, but clients too! Not clients who’ve checked in at reception for a 9.00am meeting in conference room 26.10, but clients who look as much as if they work there as those who get a paycheck from Accenture at the end of the month.

These centres symbolise the new ways of working that the modern digital economy demands, and both pushes and pulls people into a learning experience on both sides of the traditional consultant/client divide. What’s impressive to see, is that despite their size and established cultures these tech giants are responding to their changing environments and potential for their brands to being perceived as off the pace, with big, radical steps not small, incremental ones. The financial investments involved, and the internal disruption caused are not trivial, and in many ways, that’s the point. That’s the symbolism.



Ian Stephens

CEO and Founder of Principia, the world's most experienced branding and innovation consultancy for professional service firms.



It's time to dress down (again)

It’s time to dress down (again)

The nifty aphorism, “History doesn’t repeat itself, but it rhymes,” usually attributed to Mark Twain, aptly applies to the recent announcement by Goldman Sachs that they are formally introducing informality to their dress codes for employees. Most of the Millennials effected by this latest adjustment to business culture won’t remember the pre-millennium phenomenon of ‘Casual Fridays’ (aka Dress-Down Fridays), but most of the drivers were the same and the more buttoned-up sectors had much the same internal debates about it before eventually relenting to what was seen, at the time, as an irreversible, trend in modern business.

Brands in professional services are projected through a combination of symbols and substance

But then, after the turn of the century, the dot.com boom rapidly turned to bust and out with stock options went jeans and trainers (sneakers) in the office. Back with a vengeance came ‘suits and boots’ for most of the next two decades – there wasn’t much of a change during the boom in the mid-noughties, and then the credit crunch and subsequent global recession hit, and collars, which might have been loosened a notch, were firmly buttoned up again.

SYMBOLS AND SUBSTANCE

Brands are what you stand for, and that’s at the core of this; brands in professional services are projected through a combination of symbols and substance – one without the other doesn’t work, but both together can be very powerful. Goldman and others in the professional services sector are changing for both internal and external effect. Internally, it’s all about the war for talent, particularly for the kind of employees with tech skills who tend to prefer the digital, ‘geek-wear’ uniform exemplified by people like Mark Zuckerberg. These firms need them, along with a herd of the brightest and best young people, in all areas to sustain their business models, and they need the best of them to thrive. So, if they can adapt their internal business cultures to help the best young talent feel more at home – or at least not in a totally alien environment compared to the WeWork start-up environment they’re more used to ¬– it can help them with recruitment and retention.

Dress codes, from bowler hats to shoulder pads, have always been powerful symbols in professional business circles, projecting confidence and authority

LIKE US, LIKE OUR WORK

But it’s the external forces that have really tipped the balance for banks, law firms and management consultants in favour of adopting informality. Increasingly, over recent years, bankers have found themselves turning up to meetings with clients feeling and looking like fish out of water – the bankers in suits, the clients in shorts and t-shirts, probably accompanied in the meeting room by one of the office dogs. The eye-watering, commercial rise and rise of the tech sector means that these businesses have established the zeitgeist in terms of what’s seen as attractive and aspirational. In their heart of hearts, professional service firms care about their clients and want to project a balance of professionalism and empathy towards the people paying their fees. Yes, they want to be respected, but they also want to be liked.

Dress-codes, from bowler hats to shoulder pads, have always been powerful symbols in professional business circles, projecting confidence and authority. Similarly, a 20-something man or woman with a white coat and stethoscope is transformed into a medical professional with sufficient authority to be able to gain the trust of a patient who could easily be 60 years their senior.

How long it will last this time around is anyone’s guess. Hopefully, the business world will stay firmly on the rails for decades to come – but what goes up must eventually come down and when it does watch out for that dress-code update from ‘upstairs.’



Ian Stephens

CEO and Founder of Principia, the world's most experienced branding and innovation consultancy for professional service firms.



8/8 How to think about...Visual Identity

Presentation matters. We live in a highly visual world, so when it comes to communicating the proposition of a professional services firm, the way the messages are presented matters. Matters more than the words? Most certainly not; but matters? Most certainly

IQ + EQ

In its simplest terms, the visual identity of a professional services firm must reinforce the brand strategy and messaging it wants to get across to its external audiences. Generally – but not always – the strategic ‘direction of travel’ is to project a more modern, digital and innovative firm. It’s rare that the brief is to be more old-fashioned, out of touch and conservative.

Law firms are not cereal bars – they need to look modern and innovative but at the same time premium and sophisticated.

The challenge however in partnerships is that if messaging is a mix of art and science then visual identity is more art than anything else. Or put another way; it’s a lot more subjective, and there are far fewer robust ‘data-points’ to orientate debate around. Beauty is in the eye of the beholder.

DRESSED TO IMPRESS

Developing a new or refreshed visual identity system for a professional services firm requires strong sensitivity to the world in which these brands exist. Law firms are not cereal bars, and management consultancies are not mobile phones – they need to look modern and innovative but at the same time premium and sophisticated.

If you find yourself reaching for the Pantone books in the middle of a meeting to ‘find a colour’ it’s time to retreat and rethink the process.

Most good designers have very little or no direct experience of the buying process of top tier professional services. So, to put themselves ‘in the shoes’ of the client, they need super-clear briefing and direction from the strategists they’re working with and those strategists, in turn, need to be careful to guide but not stifle creativity in the process.

GOOD JUDGEMENT

Then the process is about exploring options together in outline form and getting closer to the right ‘fit’ before getting serious about developing the one or two options to take through to final decision making. The role of the consultants here is to guide not follow, and if you find yourself reaching for the Pantone books in the middle of a meeting to ‘find a colour’ it’s time to retreat and rethink the process.

My former business partner and legendary branding expert, the late Wally Olins, would tell his clients that when it came to judging the right design for their brand, “You need the courage of my convictions” – said for effect and with a smile, but there’s something in it.

Despite the substantial challenges, it’s also true to say that, compared to most of the decisions leaders of global professional services firms have to make these days, developing and choosing a new visual identity can be one of the less stressful ones – it can even be quite enjoyable.


This article is part of a weekly series ‘How to think about…’; short summaries looking at the components of branding for professional services firms. Read them here as they’re published or look out for them on LinkedIn.


Ian Stephens

CEO and Founder of Principia, the world's most experienced branding and innovation consultancy for professional service firms.



7/8 How to think about...Brand Engagement

Studies show that proper internal engagement with what a brand stands for and is aiming to deliver to customers and clients can add 20% to the value of the organisation. The problem is that busy client-facing employees aren’t that easy to engage.

Client-facing people in their day-to-day work deliver the brand positioning of a professional services firm, not just its marketing team.

As consumers, we have powerful impressions about brands like Netflix, Nike, and Tesla but may never have met anyone even remotely related to the companies behind them.

PEOPLE POWER

Whereas, being the ultimate service businesses – with little or no tangible ‘products’ – brands in professional services are all about the people. There’s no chance of us handing over any money for their services without plenty of interactions with people from the firm which can make or break any image we have coming from communications, no matter how good they are.

Communications are essential, and marketing teams play a crucial role in kick-starting the compelling narrative around the brand in the market but if that’s as far as it gets it’s likely to fall flat when it comes to influencing clients.

A huge complicating factor is that people who work in professional services firms are not just pushed for time, they have ‘negative time.

So, how do you go about ensuring that those hundreds and thousands of people – geographically dispersed and individualistic as people in professional service firms tend to be – are equipped and confident to communicate and reinforce the brand concepts and messages that you’ve developed in the relatively confined arena of the management committee?

LIVING ON BORROWED TIME

A huge complicating factor is that people who work in professional services firms are not just pushed for time, they have ‘negative time.’ They will never have time to accomplish all the things they’d like to on their to-do list and so anything that isn’t a high enough priority, with the best will in the world, simply doesn’t get done. When it comes to internal communications around the firm’s brand then, how do you ensure that it’s high enough up their to-do list that it makes the cut?

The trick is to make it valuable, consumable and essential to them. Despite having negative time, these people do get a considerable amount done ­– they ‘consume’ acres of content every day on their phones and tablets, much of it work-related. They’re always on the lookout for ideas, tips, thinking that will help them be better at their job, and generally, they want the firm and their team to win so anything that makes them more competitive they will grab with enthusiasm. However, they won’t consume (read) a long, turgid email from the management team informing them that after six months of careful deliberations their peers have developed the following, 25-page memo on the firm’s new key messages. Would you?

PEOPLE TO PEOPLE

The secret to getting through is twofold. The first step is to invest in good quality face-to-face engagement to kick-start it and overcome the ‘negative time’ challenge. It’s a big investment, but when you get people in a room and can look them in the eyes, it’s much easier to cut through. Having senior leaders advocate and introduce or even facilitate the sessions adds important signals that this is important. The communications in the room have to be good, of course, but that tends to take care of itself once the decision has been made to invest time in taking fee-earners away from earning fees!

Unleashed from the computer the same people, on the move, are suddenly transformed into content-hungry consumers on their mobile devices.

It helps if the language of the messages is clear and compelling (rather than verbose and bland) even if that requires a bit of work upfront. McKinsey famously talks about their ‘obligation to dissent’ in the name of rigour (i.e., be open and honest in your communications with colleagues no matter how senior they are). The idea is something most firms would aspire to; the language, however, makes it much more tangible and compelling.

WALKING AND TALKING

The second part of the secret to success is to create high-quality digital content, accessible on employees’ mobile devices. A fact of modern working in professional services firms is that time spent in front of a computer (even a laptop) in the office is rare, and when it does happen is spent tacking an avalanche of critical client-related tasks. The ‘negative time’ concept is most acute in this scenario.

However, unleashed from the computer the same people, on the move, are suddenly transformed into content-hungry consumers on their mobile devices. Think about it. When do you read blogs, check LinkedIn, read Bloomberg or Politico? We do it in the line for coffee, in the airport waiting to board, in a cab on the way to the next meeting. This is the moment when employees are ready and able to watch animation, check an article or even listen to a podcast about their firm’s brand and why it matters to them.

Mobile, digital communications can build on and reinforce the engagement generated in the room, and together create a virtuous circle of brand engagement.

As the biggest and best brands in professional services get bigger and better, successful firms need to develop sharper brands with real teeth. Engaging the people with the most significant part to play in communicating that brand to the market becomes critical to achieving success.


This article is part of a weekly series ‘How to think about…’; short summaries looking at the components of branding for professional services firms. Read them here as they’re published or look out for them on LinkedIn.


Ian Stephens

CEO and Founder of Principia, the world's most experienced branding and innovation consultancy for professional service firms.



6/8 How to think about...Brand Purpose

Professional service firms are starting to think about the concept of brand purpose as a way to better engage with employees, recruits and clients around the world. It’s powerful but requires careful handling.

Purpose sells. That’s what some recent academic studies indicate and what anyone with their eyes open to what’s going on in consumer marketing around the world could tell you. Think of just about any of the brands that dominate our lives these days and whether or not you’re at all interested in their products and services you probably have a good idea what their purpose is – in Silicon Valley, it’s the first slide in any fundraising pitch.

WHAT ELSE MATTERS?

Not that long ago – may be no more than 20 years ago – most CEOs of businesses of all types could stand up in front of their annual general meeting and unashamedly talk about increasing shareholder value as the highest-level purpose of their organisation. Many might mention things like their charitable and philanthropic giving in their closing remarks, but otherwise, the main takeaway would be that shareholder value was king and anything else was secondary. There were exceptions of course (John Lewis in the UK, Johnson & Johnson in the US) but the herd was focused on it.

Businesses with ‘higher ideals’ – those focused on improving people’s lives – grew three times faster than their competitors.

Nowadays, even the CEO of a vulture fund would probably shy away from single-mindedly focusing on commercial performance, let alone the majority of businesses that have clients, customers and other ‘stakeholders’ in addition to its shareholders. The reason for this change is simply that in those intervening years the push and pull forces of values became too big to ignore. Push, in that people who work for and buy from organisations became more insistent that brands had values and that they could ‘trust’ those brands to do things like care about the environment, be concerned about child labour and sweatshops, know what’s in their products and in general, just care. Pull, in that owners of brands began to notice that new competitors with purpose were eating their lunch. P&G Marketing Director Jim Stengel famously audited data from 50,000 global brands and calculated that businesses with ‘higher ideals’ – those focused on improving people’s lives – grew three times faster than their competitors.

WHY NOT WHAT

Unilever, P&G’s arch-rival, is a wonderful example of a business that has put purpose at the very core of its corporate agenda over the last 10-15 years. Unilever makes and sells everyday things like soap (Dove), ice cream (Ben & Jerry’s) and tea (Lipton) but as a business, they are focused on ‘making sustainable living commonplace’ as their overarching purpose. CEO Paul Poleman has made himself the global brand ambassador for Unilever’s brand purpose, digging into issues like climate change, education of girls in developing markets and challenging gender stereotypes everywhere. A long way from a tea bag on a supermarket shelf in upstate New York you might think, but Poleman and Unilever’s board know that its customers do care where that tea bag comes from and what the company behind it cares about.

When it comes to professional services, purpose is quickly rising up the leadership agenda even if it feels at first glance like a tricky subject. In some ways it was initially easier for service businesses to engage with the challenges of social and environmental issues; they don’t have long supply chains, don’t burn much carbon and tend to operate mostly in relatively benign (developed) parts of the world. But purpose adds an extra dimension – it’s not enough to be against bad things the question now is ‘how are you making the world a better place?’

77% of millennials considered organisational culture ‘more or at least as important as salary and benefits.’

EY has made a strong start in this with their ‘Building a better working world’ agenda; clearly, a purpose-driven concept aimed at engaging its employees, it’s future recruits and increasingly, its clients. Perhaps the most tangible and urgent driver for purpose among leaders of professional services firms is internal. Research by Virgin Pulse in 2015 found that 77% of millennials considered organisational culture ‘more or at least as important as salary and benefits.’ Remember that millennials now make up the vast majority of the workforce of just about every professional services firm on the planet and you can begin to see what EY are up to.

Another large, global professional services firm, PA Consulting, have recently developed a new brand purpose concept around ‘bringing ingenuity to life’. PA talk about their optimism for ways in which technology and its applications through innovation can improve lives in all sorts of sectors from medicine and health through to transport and infrastructure.

HOLD THE FRONT PAGE

What EY, PA Consulting and Unilever (and the more obvious Tesla, Google, Uber, et al.) have done with their purpose concepts highlights the challenge that an authentic purpose statement requires – not just what the owners of the business do on the side with the money they make or the charities that they and their people support.  An authentic purpose has to embrace what the company does as well as how it does it – as Simon Sinek put it in his 2009 TED Talk (now viewed more than 30 million times), “people don’t buy what you do, they buy why you do it.”

EY, PA and Unilever have embraced that, and in ways that are authentic to the sectors they are in and in ways that are a healthy balance between aspiration and credibility. One key point for leaders in professional service firms to remember in developing their brand purpose is to remember that while the purpose must be linked to the actual business, the requirement for uniqueness is far lower – maybe negligible – compared to other aspects of brand development such as propositions and key messages. Tesla wants to make the world a better place by converting travel to more sustainable electric power, but in doing so, it doesn’t say why Tesla alone can do this, no more than EY needs to claim that its ‘better questions’ alone can make the working world better.

Of course, coming up with a purpose statement is only a tiny part of the task. The real work is in the implementation; in the hundreds and thousands of big and small ways in which the company goes about living up to that purpose, making it a tangible part of the way it does business around the world. Not for the faint-hearted – BP famously got into trouble by setting out its Beyond Petroleum purpose campaign without (allegedly) changing its operational safety policies sufficiently to match. Unilever kicked off their vitality agenda in 2005 by auditing their entire global portfolio and removing thousands of tons of salt, sugar and trans fats from its products, recognising that if they didn’t challenge themselves in such ways, they would open themselves up to cynicism from critics.

Ultimately, articulating purpose can be incredibly galvanising for a professional services firm, as it can provide a bridge between the inside and the outside, the so-called employee value proposition, and the client value proposition. Getting it right can help improve loyalty, productivity, and performance, all at the same time.


This article is part of a weekly series ‘How to think about…’; short summaries looking at the components of branding for professional services firms. Read them here as they’re published or look out for them on LinkedIn.


Ian Stephens

CEO and Founder of Principia, the world's most experienced branding and innovation consultancy for professional service firms.



5/8 How to think about...Thought Leadership

In our increasingly saturated digital media environment the demand for thought leaders is growing exponentially, but what is it and how do you 'do it'?

McKinsey does a lot of it, ex-Goldman Sachs economist Jim O’Neill is one, and spend more than five minutes on YouTube and you’ll bump into one of Simon Sinek’s Ted Talks.

Thought leadership is a bit like charisma – hard to describe but much easier to spot. In our increasingly saturated digital media environment the demand for thought leaders is growing exponentially, but what is it and how do you ‘do it’?

Tough call
Joel Kurtzman of Booz & Co originally coined the term thought leadership twenty years ago in their publication “Strategy+Business,” and it caught on. More recently Forbes proposed reserving that the moniker for people or companies who are “capitalizing on the dramatically enhanced brand equity attained by being a thought leader.”

So that’s a pretty high bar then. But of course, most professional services firms do lots of things, and markets break down into segments and sub-segments so while it’s a tough call to become the thought leader firm in your market it is possible to aspire to be a thought leader in one or more areas of specialism.

Thought leadership is a bit like charisma – hard to describe but much easier to spot.

Lead, and we will follow
By definition though, thought isn’t leading unless it’s original, provocative and even inspirational. And to be a leader, you’d better have some followers or else you’re talking to an empty chair.

Most of what’s talked about in professional services firms as thought leadership is, in reality, nothing of the sort. An update on changes in regulations might be a good thing to send to clients as part of relationship building, but it doesn’t count as thought leadership. Neither does rehashing already-published data and packaging it nicely. Again, it may serve other purposes, but it’s not thought leadership.

The genuine article
Genuine thought leadership, like the McKinsey Quarterly or PWC’s authoritative annual CEO survey, aren’t easy to produce. Like many things, it gets easier when you get the hang of it but it takes large handfuls of both inspiration and perspiration – and it takes an investment of time or money or both.

That’s why only a small number of professional services firms have traditionally taken thought leadership seriously – but they’ve been getting the results. Recently though, there have been signs of a tipping point as firms and individuals within them recognise that the digital media environment is now so rich and so much more on the radar of their clients that everyone is trying to work out how to get a piece of the action.

Digital first
Many firms that until now limited themselves to pushing out information rather than thought leadership are upping their game. Digital has made things easier – particularly in terms of pushing the thinking out there via social media, blogs, etc. Platforms like LinkedIn help individuals gain confidence in their ability to develop and project thinking without jumping right in at the deep end. Many find they quite like it and warm to it, creating a virtuous circle of content that marketing teams can help them channel to the right audiences.

Platforms like LinkedIn help individuals gain confidence in their ability to develop and project thinking without jumping right in at the deep end.

Often inspired (or cajoled) by their marketers, some leading firms are effectively harnessing the collective LinkedIn networks of their partners and associates as a ready-made communications channel for their thought leadership content. It’s not a simple task as it requires a delicate combination of influencing skills, education, and reassurance but the prize is tangible – imagine the scale and reach of the collective virtual client network of all your firm’s partners and associates added together. And what’s more, the beauty of LinkedIn is that the clients in this network will in the end only be seeing useful content from someone that they know personally.

Trade-rags reborn
The other platforms that are experiencing a mini-boom in digital saliency are the daily/weekly news alerts from what were once called trade magazines – The American Lawyer, Accountancy Today, Architectural Review – which have an almost endless appetite for good, topical or salient content. And then there are the aggregator platforms like Wired and Bloomberg News who curate and package up the best of this content for their audiences.

It can be a little overwhelming for the novice partner who’s more comfortable writing the odd white paper every other year for their alma mater’s Law Review. However, with support and determination, most can be persuaded to try it out, and many can be inspired to become regular content generators once they acknowledge the link between virtual content generation at one end of the pipe and real revenues at the other.


This article is part of a weekly series ‘How to think about…’; short summaries looking at the components of branding for professional services firms. Read them here as they’re published or look out for them on LinkedIn.


Ian Stephens

CEO and Founder of Principia, the world's most experienced branding and innovation consultancy for professional service firms.



4/8 How to think about… Differentiation

Nurturing brand differentiation in professional services is a critical but subtle business. The key is to separate ‘using from choosing.'

“My clients don’t care about differentiation, they just want us to do a good job for a reasonable fee,” is what marketers often hear from their front-line partners in professional services firms.

On the other hand, any textbook on branding since Lord William Lever (of Unilever fame) invented Sunlight Soap in 1884 seems to put great emphasis on differentiation as one of the most fundamental aspects of marketing and brand success.

Before Mr Lever came along soap was soap, cut from a large block and sold wrapped in plain paper. What Lever discovered was that if good quality soap was cut into small pieces, infused with a delicate perfume, wrapped in attractive packaging and advertised in the local newspapers, then perfectly rational people were more than happy to choose it over other soap and even pay more for it.

When it comes to choosing whom to engage…differentiation suddenly becomes extremely important.

Premium professional services and soap are obviously very different, but the influences of branding and perceived differentiation are not so dissimilar, and it’s worth considering just how important they might be.

USING OR CHOOSING?

The partner above is talking about his or her existing clients, and on the whole once they’ve made a choice about which lawyer/architect/management consultant to engage, clients do then focus almost exclusively on ‘good’ rather than ‘different.’ However, when it comes to choosing whom to engage, that’s an entirely different situation and differentiation suddenly becomes extremely important.

To see how brand differentiation works in professional services put yourself in the shoes of the sophisticated client sitting on the other side of the table as they hear four well put together pitches for their business. Because they’ve done their homework, they’ve narrowed the shortlist down to four firms who have a great track record in what they want doing. Each firm presented a deceptively similar line up of highly talented individuals and could all obviously do the job well.

So, who gets the job? Not the cheapest, because they were almost identically priced, and the small differences were nothing in the face of the importance of this task ­– the upside of getting it right and/or the downside of getting it wrong. The winning firm was the one that the clients ‘perceived’ to be better suited to the task. Based not on the fundamental criteria – being able to, say, design a beautiful, award-winning, 1000m iconic skyscraper in the middle of the desert that will stand up ­– because vital as these this is, they can all do it.

So, the decision moves onto more intangible perceptions that the client has about one firm vs. the next. What they’ll be like to work with, what their peers will think about their choice, whether they’ll be hungry to do their best work or rest on their laurels. All ultimately unknowable, nonetheless the criteria upon which they award the $1m contract. Mr Lever would call it the brand.

IPHONE THEREFORE I AM

Fast forward from the North of England in 1884 to Silicon Valley in 2018.

It may be a lot more complicated than a bar of soap, ­but the Apple iPhone is a brand that Lord Lever would appreciate.

It’s no new news that people love the iPhone, but what’s impressive is just how dominant Apple is – perhaps the most successful example of a brand creating perceived differentiation in a sophisticated and highly competitive market.

The latest iPhone X like the previous iPhones is an incredible piece of technology. But at the same time the Huawei Mate 10 Pro (for example) is also an astonishing piece of technology, and you’d be hard pushed to find anything that the iPhone X does that the Mate 10 Pro doesn’t do equally well – things like make calls, send emails, stream YouTube, play Fortnite, etc. Also, being the latest flagship model of each company they both have huge screens with fabulous definition and enough computing power to land on Mars.

However, here’s the thing. Even though each sells similar numbers of devices, Apple makes around 80% of the entire profits of the global smartphone market whereas Huawei makes about 5% (and choosing Huawei was generous, because apart from Samsung they are the only other manufacturer who makes any profits at all).

The point of this is to shine a light on the value of perceived brand differentiation based on fairly intangible ideas in the minds of willing consumers, even in a market for highly tangible products like smartphones that can be pulled apart, tested and measured.

The good news is that the ingredients of your firm’s brand differentiation already exist to some extent; if you’re winning work, you’re doing something right.

What Apple has created is a powerfully differentiated brand that sensible, rational people buy into and are willing to pay more for, even if the others, “do a good enough job at a reasonable price.”

START YESTERDAY

The challenge for CMOs of professional services firms is to persuade their executive team colleagues that establishing meaningful brand differentiation that will give their teams a significant competitive advantage ‘tailwind’ in the kind of new business pitch scenario depicted above, requires a long-term branding strategy.

The good news is that the ingredients of your firm’s brand differentiation already exist to some extent; if you’re winning work, you’re doing something right. The trick is to work out what it is and then to work out how to nurture it.

It can’t just be ‘turned on’ in the room ­– any more than Apple can begin to tell their story in the store. In the pitch/store you can remind them of that brand differentiation but the work seeding the perceptions of brand differentiation in the clients’ minds needs to be done way in advance, often many years in advance, to be able to call it in when it counts.


This article is part of a weekly series ‘How to think about…’; short summaries looking at the components of branding for professional services firms. Read them here as they’re published or look out for them on LinkedIn.


Ian Stephens

CEO and Founder of Principia, the world's most experienced branding and innovation consultancy for professional service firms.



3/8 How to think about... Tone of Voice

It's not just what you say, it's how you say it. Tone of voice is the yin to the yang of key messages when it comes to brand communications

“Never use a long word where a short one will do,” is one of Orwell’s famous five rules for good writing. Simple, but instructive and oh so often ignored, especially when it comes to business writing. It’s easy to sound pompous in writing, hard to sound natural, conversational. Which is funny when you consider that we all do a lot more talking than writing. But somehow when we pick up a pen or pluck a keyboard, we get all stuffy and convoluted.

What did you say?
If key messages are the ‘what’ of communications, tone of voice is the ‘how.’ “Stand and deliver!” or “I would be extremely grateful if you would please slow down and hand over your valuables to me.” Same message, different tone of voice.

Although it sounds easy, it’s actually quite hard to call out brands that have a distinctive and consistent tone of voice in business. Tons of effort goes into grammar and technical accuracy – as it should – but almost no effort goes into defining and maintaining a consistent tone of voice in brand communications for professional service firms.

If key messages are the ‘what’ of communications, tone of voice is the ‘how’.

Notable exceptions include Goldman Sachs, who, in the world of professional services brands, do get an awful lot right. Goldman’s tone of voice is captured exquisitely (or ‘well’ as Orwell would prefer) in their published Business Principles. “We have no room for those who put their personal interests ahead of the interests of the firm and its clients,” is my favourite, but the whole thing is crisp, precise and uncompromising, which is exactly what they intend. This is a terrific example of how a strong tone of voice can lift something that can often be a bland statement of ‘values’ into a meaningful and instructive piece of communications.

One tone, one voice
Another is The Economist; a great example of how tone of voice can make the complex seem approachable without dumbing it down. It’s also a fabulous example of how a strong tone of voice can project consistency across a whole host of contributors. Read an edition of The Economist (and, if you can be bothered, any issue of the magazine, forever), and you get the strong impression that they had the same person write every word in every article.

They didn’t, of course, but by having an exceptionally well defined and controlled tone of voice, they manage to pull it off.

To define the tone of voice for a professional services firm you need to think about the best practices (there’s always room for improvement!) and what you want to stand out for, to help communicate the subtle but distinctive brand of your firm (like Goldman does).

“Never use the passive when you can use the active.”

“Never use the passive when you can use the active.” is another of Orwell’s rules containing low hanging fruit. You can’t get more straightforward than that, can you? But it’s incredible how easy it is to default to the passive as soon as it comes to business writing. For non-linguists, it can be a bit tricky to spot it creeping in (but these days there’s always an app for it!). ‘Batman threw the Joker from the rooftop,’ is active. ‘The Joker was thrown from the roof by Batman,’ is passive. Both are grammatically fine; they only differ in tone.

Choose yours
The challenge for a professional service firm in going further than this is that there’s no one way, and no right way. The Economist isn’t ‘right’ where the Wall St Journal is ‘wrong,’ they’re just different, and in the Economist’s case, deliberately different.

Often big brands with a strong and consistent tone of voice have an actual singular individual who sets (or once set) the tone. Think Virgin, Apple, Tesla, Google. Others have strong cultures which help support a consistent tone. Think Goldman, McKinsey. Most big professional service firms are no longer run by their founders, so you’ll need to herd a few cats to define a clear tone of voice and create a consensus for it.

Once you’ve decided what the tone is, you need to capture it in a simple framework and then, as with anything like this, go about institutionalising it, trying to strike a balance between structures, encouragement, training and some good-old coercion.

And, on the hygiene factors, don’t reinvent the wheel; fortunately, many excellent writers have done this for you; the Economist Style Guide and the Reuters Guide, are good options.


This article is part of a weekly series ‘How to think about…’; short summaries looking at the components of branding for professional services firms. Read them here as they’re published or look out for them on LinkedIn.


Ian Stephens

CEO and Founder of Principia, the world's most experienced branding and innovation consultancy for professional service firms.



2/8 How to think about… Key Messages

From philosophy to business, if you want to communicate your brand story in a way that cuts through the clutter, key messages are essential.

As well as establishing one of the world’s most substantial philosophical movements, (or 4th largest religion depending on how you view it), Gautama Buddha, (or simply the Buddha), could also have claimed to have invented the modern communications discipline of key messages. With its Four Noble Truths, Noble Eightfold Path and Five Precepts, Buddhism seems perfectly designed to cut through the media clutter and present itself with clarity and consistency across all the various communications channels available. Admittedly, at the time these were limited to word of mouth and the occasional Ola leaf, but they cut through nonetheless. It’s likely that if the Buddha were forming his thinking today, he would probably be advised to see if he couldn’t reduce it to one list rather than three, but you can’t argue with the results.

From Buddha to brand
For a modern professional services firm, an agreed set of powerful key messages is a vital component of a successful branding strategy. Once decided, they give leaders, partners and all those involved in marketing the firm a framework to ensure that everyone is singing from the same hymn sheet – and with well-designed messages, they’ll be singing a pleasing tune as well. Whether it’s the ‘about us’ section of the firm’s website, a press release or a panel pitch to a new client, a set of key messages should be a valuable tool to all those involved. Many of the most successful professional service firms have strong key messages, particularly those that are big, international and provide multiple services across multiple sectors.

For a modern professional services firm, an agreed set of powerful key messages is a vital component of a successful branding strategy

Key messages are at once one of the most straightforward and challenging components of successful branding for a modern professional services firm. The easy bit is what they look like: a set of bullet points that fit comfortably on a piece of paper (ideally on half a piece) that together communicate a firm’s proposition to the market. The advantage of having a set of separate points (over a single ‘positioning statement’), is that it makes it easier to include a fairly diverse range of concepts without too much need for linguistic gymnastics. The challenging part is that to be powerful, these messages have to be simultaneously, ‘relevant, distinctive and true,’ which is where the hard work begins. A bit like learning to juggle, one on its own is easy, two a bit harder and three – well initially nigh on impossible it seems at first!

Relevant, distinctive and true
You have to start with a sound basis of robust insight. Depending on the sector that insight can be quantitative (numbers), qualitative (opinions) or more likely a combination. Then the challenge is to work with that body of insight in one hand and the firm’s leadership team in the other to craft a set of messages that simultaneously capture client propositions (relevant), the firm’s competitive strengths (distinctive) and are authentic and credible (true). The toughest part is to avoid knocking all the corners off and ending up with something supremely bland.

However, achieve it, and you’ll have developed a tool worth its weight in gold that will endure for years or even longer. McKinsey & Co, as an example, developed many of their key brand message themes, (only the most important work, brightest people, up or out, rigour, etc.), decades ago, and even if they’ve evolved to suit the changing times the themes still resonate today with clients, prospects, staff, and recruits.

End.


This article is part of a weekly series ‘How to think about…’; short summaries looking at the components of branding for professional services firms. Read them here as they’re published or look out for them on LinkedIn.


Ian Stephens

CEO and Founder of Principia, the world's most experienced branding and innovation consultancy for professional service firms.