Law firms must know the value of their IP before they undertake a rebrand, says Thayne Forbes.
That is the question playing on the minds of many managing partners today who are operating at all levels of the market. Some of the leading names in the national market are repositioning themselves as international players while on the High Street, stronger regional players are snapping up their smaller competitors and some in the Home Counties are opening up London offices to take advantage of that market too.When a firm has a shiny new offering to communicate, a brand refresh can work wonders – but the challenge for big national players and high street firms alike is not to alienate their long-standing client-base in the process of trying to appeal to new sections of the market.
What factors drive a rebrand?
In the past month alone we have seen rebrands from the Baltics as two leading firms in the region joined forces to form a new firm Ellex, and from Italy where one of the biggest national firms (part of the Best Friends network with Slaughter & May) Bonelli Erede Pappalardo rebranded as BonelliErede. The literature accompanying the BonelliErede brand refresh points out that this new united name better reflects the unity of the team, as well as making an instant impression and being easier to remember. The firm is right that keeping a firm name simple and easy to remember is key – all too often we see law firms named after a series of lawyers’ surnames which become a lengthy list that hardly rolls off the tongue and is only likely to be shortened when referred to by the firm’s own lawyers and support staff, let alone clients.
BonelliErede also points to the image overhaul as a way to underline the firm’s transition from domestic market leader to international player. Again, something as simple as ensuring that the brand is easily understood and even easily pronounced by clients from all over the world becomes more of a priority as a firm proactively goes out to a wider global client-base.
The hard value of a law firm brand
While much of the discussions around a rebrand will focus on marketing messages, look and feel, and word play, there is a harder financial edge to this in terms of the value of the intellectual property embedded within the brand – and what could happen to this during the rebrand process. While quantifying brand value from a financial perspective is acknowledged by many law firms, it is not necessarily well understood. Valuing a brand is a complex process which will usually utilise a combination of methods to ensure its overall position is well-rounded, considered and informed. The three principle methods of valuation to consider are:
• The income approach: this method creates a discounted, present-day value of future cashflows attributed to the brand, requiring a well-informed understanding of how brands drive cashflow and the associated opportunities and risks;
• The market approach: this looks at comparable market transactions to estimate a brand’s value; and
• The cost approach: considering the actual costs incurred in creating or recreating the brand itself. This involves fundamental difficulties around forecasting the future, identifying the role of the brand and making well informed comparables.
Combination of methods
Best practice involves a combination of these three methods and generally, appreciating metrics as lead indicators of future market outlook and financial performance is a good starting point. When considering a rebrand after a strategic move or as a continuation of the firm’s latest evolution, firms must first have a solid understanding of the value of the IP in their existing brand and work with a brand valuation consultant to explore how a change to that brand will impact on the IP value, positively or negatively. The resulting marketing campaign around the rebrand – and the worth of the new brand to the business – will be that much stronger as a result.
Thayne Forbes is joint Managing Director of brand valuation consultancy Intangible Business