My hypotheses are:
- It’s rare to see a single monolithic brand offering high-end and economical products or services under one name. Even where it’s clear that there’s common parentage, brand names are distinct, as are distribution channels (read: stores or offices). “Giorgio Armani,” “Armani Exchange,” and “Mani” are all clearly part of one corporate parent, but it’s a parent that works very hard to keep the lineages separate. Mixing them up will kill you. If you doubt me, just ask those with long memories at General Motors. In the 1970’s it came out that the carefully manicured brand distinctions between Cheverolet, Pontiac, Oldsmobile, Buick, and Cadillac were more imaginary than real. An impressive array of not just parts but entire drivetrains, chassis, and fundamental platforms were shared indiscriminately. Oldsmobile “Rocket V-8’s” in Chevy’s? You betcha. If you’re tempted into operational efficiencies, don’t even think about it.
- If you want it to borrow from the cachet of the established parent by sharing the name, you may be able to get away with it (the jury is still out on Hyundai/Genesis, and I would argue that the Armani stable is the exception), but then again staking our entirely new mental territory in the clients’ minds is probably better. “Lexus” not “Toyota,” “Smart” not “Daimler,” and for that matter “Scion” not “Toyota.”
- Safeguarding the integrity of the “offshoot” brand is paramount. Do not pollute its operations, marketing, finances, or talent-acquisition processes with “learning” from the parent.
- Keep it geographically separate (LaJolla, not Battle Creek).
- Give it its own stores/offices.
Fundamentally, these add up to one imperative: Don’t meddle!
So what are the prospects for this kind of dual-track offering in Law Land?
Highly improbable, bordering on “not going to succeed if you try it,” I would argue.
For one simple reason which has far more to do with culture, psychology, and training than it has to do with marketing, finance, or operations: Lawyers cannot control themselves when it comes to meddling. They simply won’t be able to restrain themselves and keep their hands and their opinions away from the offshoot. (If the offshoot is looking for funding from the parent, which seems far more likely than not, the meddlers will have a ready-made rationale: “It’s my money.”)
I’m not fond of this behavioral dynamic and I disapprove of it mightily. After all, it boils down to the unattractive attitude that lawyers can do anyone else’s job but no one can else could possibly do the lawyer’s job.
But is this attitude real? With resignation, I admit that it is.
So can the “offshoot” be pulled off? I fervently hope so. Allen & Overy/Peerpoint may be the first large-scale effort in this direction, and I am following its progress avidly and frankly rooting for its success. But even if it succeeds, would I wager on others? Only with someone else’s money.
Bruce,
Closer to home, have any of the Big 4 accounting firms or bulge bracket investment banks tried things like this? Also, just looking at the success of the carmakers launching those subbrands, I don’t think it is coincidence that all of them were “upmarket” moves rather than downmarket. The firms you are talking about don’t really have that option.
For the reasons you cite, I don’t think large law firms themselves can do this. Not directly. But what they can and should do is look at deploying “passive” capital within the alternative provider universe. Private equity or venture capital type investments, or maybe a JV if the business case is strong enough. I know some firms are doing this already, a trend likely to continue. You can start on a much smaller scale, and see where it goes.
Hilton and Marriott do offer multiple price points under different brand names. And now, they sometimes build two brands in one building. That does not address, however, the meddling partner issue.
Thought provoking article. I’ve been mulling it over for the last couple of days.
I have to declare a particular interest in this topic, having founded the contract lawyer hub Vario within the brand of Pinsent Masons. My experience suggests that we should ask a different question: not ‘can different price points exist under one brand?’ but ‘can different service lines (which, most likely, will attract different price points), exist under one brand?’ By taking the service(s) offered as the starting point, rather than the price, I think we can arrive at a more optimistic view.
Sure, partner intransigence and cultural inflexibility will remain issues to overcome, but, in a way, it was ever thus. Crucially, however, in taking the service-first approach, we will be responding first to client demand for flexibility and choice from their trusted legal brands. From that solid foundation flows differential pricing, which is a natural consequence of the varying market forces associated with delivering services in a variety of ways.
So perhaps all of this would sit more comfortably with law firms if we started to think about differentiation in terms of a horizontal spectrum rather than the more pejorative ladder of services where some are ‘upmarket’ and some are ‘down’? Clients expect quality in all types of legal services they procure, be they LPO services, contract lawyers or partner-led strategic advice. The difference is not the quality but the nature of the output. The method by which the services are delivered is a consequence of the required output and the price point is a consequence of method.
Dear Katherine:
Many thanks for such an insightful comment. You have nicely articulated the difference, which far too many fail to appreciate, between “value” and “inexpensive.” I have long been a firm believer that product and service providers can deliver value at all price points along the pertinent market spectrum, from inexpensive to super-luxury pricing. And “value” itself embodies and essentially entails the concept of quality, as in quality fit for purpose or suitable for the client’s needs for that matter or that application.
Lawyers too often denigrate the prospect of less-expensive services by immediately and thoughtlessly assuming they will bring with them compromises in both quality and value. Not so in the least. (For a discussion of some of these issues in a different context, see my recent “Bergdorf Effect” column.)
I mostly agree with the conclusion, but wonder if the comparisons are apt. In the auto, airline and food examples, the upmarket or downmarket moves were aimed at targeted different segments of consumers. Law firms who are trying to successfully move up or down market are typically trying to get a broader swath of work types from their existing client base, not trying to establish a radically new and different set of clients.