Wednesday, September 23, 2009

Ethics Rules v. Hot Startup: What Makes Sense for Consumers and Lawyers?

I've been following a couple of developments in the local/legal Internet advertising market that seem to highlight the disconnect between product innovation and lawyers looking to leverage these innovations to build their practice.
  • The first involves an ethics complaint filed by a Connecticut attorney who seems annoyed by the pay-per-lead advertising model used by Total Attorneys. This attorney is categorizing this advertising model as an illegal referral agency.
  • The second involves the winner of the TechCrunch 50 contest, a new company called Red Beacon. Red Beacon, started by two former Google product guys, sets consumers up to "Compare prices and book an appointment for any local service." Red Beacon takes performance-based advertising to the extreme - they only get paid (10%) if the local professional gets paid.

As we sell online advertising to lawyers every day, I'm acutely aware of the general disdain that many lawyers have for referral services. Their disdain is understandable - traditional referral agencies take anywhere from 25-33% of the total fees collected as compensation for qualifying a potential client and making an introduction. That's a healthy chunk of change.

However, the aversion to referral agencies is not just economic. I remember speaking to a friend of mine about legal marketing. My friend is a lawyer (and a successful internet advertising exec) and he told me that he was trained that lawyers should not "sell." Rather, they were members of a "learned profession" doing a "public service" by performing legal services for clients (at $500/hr).

Put those two traits together and you can understand the scorn towards the lawyers operating referral agencies. Typically, they are perceived as the "hustlers" and "ambulance chasers" that cause their profession to lose its prestige. But, is that really what is going on at Total Attorneys when they charge you $65 for a bankruptcy lead? What about Red Beacon when they charge you 10% of what you collect and ask you to compete for the consumer? Seems more like they are looking to make the advertising more performance driven . . .

Not sure where the ethics committees will weigh in on the Total Attorneys case . . . but one thing is clear: the Red Beacon product is a non-starter in the legal field (for now). Last week, an attorney told me that she was "not going to run to the phone and compete for the client like she was a house painter or general contractor." So, I'm spending $5,000-10,000 getting my house painted and those guys should be price shopped. But, not an attorney charging anywhere from $2,500 - $10,000? Does that make sense to you?

The funny thing is that consumers want businesses to compete for their business. That's why Red Beacon was so intriguing to the Tech Crunch guys and the venture capitalists.

Friday, September 18, 2009

Overview of Online Marketing for Lawyers

Last weekend, the CA Bar held its annual meeting in San Diego. I was fortunate enough to present an hour long session on online marketing for lawyers. Earlier this year, I attended the solo and small firm summit in Oakland, CA and I was utterly shocked at the misinformation that was being presented to lawyers (by those claiming to be "Internet Marketing Experts") looking to use the Internet to generate new business for their firm.

The one statement that caused me to fall out of my chair was when one "law firm marketing expert" claimed that he could show lawyers to how effectively market online for free. His evidence that his approach worked was that when you searched for his name (which we will not mention to avoid mudslinging), there were over 400,000 webpages that had his name on it. So, if you paid his consulting fees, he would show you how to do this (btw, doesn't that make it not free?).

To illustrate how silly that is, go ahead and search for your name. When I search for mine, Google comes back with 303,000 webpages. It doesn't take long to realize that most of these sites have nothing to do with me. Turns out that there are many people named "Steve Lombardi" including a professional wrestler, a bodybuilder, a lawyer and some web designers. While I would have enjoyed wrestling in the WWF in the 80's, I didn't. If you go deeper into Google's search results, you'll realize that the vast majority of these web pages don't even have my name on it - they might have my first and last name on different parts of the page and so Google brings back the results. Point is, this is not a relevant metric for evaluating the efficacy of your online marketing.

My response to this nonsense was to start this blog so that lawyers would have a resource to turn to for basic information (and sometimes advanced) about online marketing. Back to the presentation . . .

I was pleasantly surprised at the turnout for the session - about 70 attorneys or so. There were non-stop questions throughout the session and about 10 attendees approached me after the session with incredibly positive feedback.

Anyway, here is the presentation. If you are a lawyer and have any questions about online marketing, please don't hesistate to contact me. There are too many short term scam artists out there over-promising and underdelivering and it dampens the potential for the entire industry.