Legal brands in a cold climate

Do brands matter in law? I’ve wondered recently, after writing an article on the damage being inflicted on the image of that darling of law schools around the world, Latham & Watkins, as a result of stealth layoff accusations and the reversal in its incredible growth of recent years.

Many senior lawyers would say brands don’t matter one jot, largely because they see the concept as distinct from what they personally do. This view is both narcissistic and factually wrong. It is narcissistic in the sense that even brilliant partners are not the sole value of a major firm - just the biggest chunk of it. The profession is littered with high-flyers that have floundered once removed from institutions they have come to resent. Such characters overestimate their own contribution and undervalue the firm and all the infrastructure, support and goodwill that has contributed to their success. And, of course, not all partners are brilliant.

But dismissing brands is also misguided in that what is defined as a brand in legal services has a strong correlation with demonstrable performance. Latham’s enviable brand has always been as much about above-trend financials as it ever was about plunking assistants on committees and funky appraisals. Other quantifiable factors that affect legal brands are the quality of client bases, positions in standardised transactional rankings like M&A tables and securing roles on high-profile mandates. The attraction and retention of partners also helps.

But some still think of brands as just the softer stuff, like the value a firm gets from marketing and how attractive it is to potential recruits for reasons other than hard cash and prestige. Legal directories also largely fit in this category, and a law firm’s culture can become part of the brand - providing it has one.

It is this aspect that is about to be tested as law firms part company with partners and associates they were recently so desperate to retain. This point is underlined by the recent Superbrands survey, which name-checks a group of City law firms, most of which are coincidently involved in sweeping jobs cuts. Top-ranked Linklaters has (rightly or wrongly) attracted a little more controversy than its City rivals for its jobs cuts. Likewise, Allen & Overy, probably the closest the magic circle has produced to a touchy-feely-but-with-prestige brand that Latham excelled at projecting, is embarking on the most sweeping restructuring yet seen from a top London firm.

Obviously, such surveys are fairly broad indicators and have to be taken with a pinch of salt; I doubt Superbrands has the same value to a law firm of a good Chambers ranking. But they do give some indication of a firm’s brand recognition beyond the legal goldfish bowl (Eversheds must be on to something).

It will be interesting to see how adept law firms will be at managing and reconciling the fuzzier side of their brands with current axe-wielding. Early indications are that some are very alive to the challenge, recession or not. But others do not appear to know where to start in terms of communicating internally or externally. Either way some partners, fearful of their own futures, will continue to argue that everything will be fine if all those awful marketing and support staff are shown the door.