This is Part 2 of my interview with Stuart Wood (CEO of Caravel Law). Part 1 here. In this part of the interview we talked about how one goes about marketing professional services firms. Stuart marketed both the leading firm in Canada, and now oversees a “start-up” law firm. There are some similarities and some real differences in how marketing is done in these environments. I hope you enjoy this - it is a little different than our normal discussions on Marketing BS.
Transcript:
Edward: This is marketing BS. This is part two of my interview with Stuart Wood. Today we're going to dive into his experience overseeing marketing at two Canadian law firms, Caravel and Torys. He was CMO at Torys and CEO now at Caravel. You were CMO at Torys, which is a very, very established law firm in Canada. Now you're CEO of Caravel, which is a much newer law firm, relatively new. How do law firms differentiate themselves? What makes someone choose one law firm over another?
Stuart: It's a challenge for every law firm, I think. Because what you'll see, if you look at law firm marketing, there's a lot of the same language, a lot of the same descriptors that they're trying to use for themselves. There's a lot of generic terms that are used. You'll see a lot of advertising, which are things like chess pieces and these strategy images that they think are going to really differentiate their firm, but it really is a lot more and more of the same.
We try to differentiate ourselves in a few ways. But one of the keys for us is to try to differentiate through innovation and our business model. We've taken a lean approach to legal services, the same way that I applied lean principles to different businesses when I was a consultant, playing them here at Caravel as we take out everything that doesn't add value to the client as a way of trying to get the costs as low as possible.
We practice in a different way where our lawyers—well before COVID hit—all practiced remotely as a way of eliminating the cost of a large expensive office on Bay Street. That means that we attract talent—great lawyers that have 15+ years of experience and just for whatever reason are looking for the flexibility of being able to work remotely.
Nowadays, that's something that all law firms are trying to do, but for the founders of this firm 15 years ago, it was a pretty innovative idea to get rid of the office and have all the lawyers practicing remotely.
We try to essentially implement legal technology in a way that actually delivers value for the client as opposed to just looking good in a press release. We use contract automation software and different things so that it feels different when our law firm is working with you versus when you're working with a traditional firm. We're not trying to just be a less expensive version of a traditional firm. We're trying to feel different from the client when we provide our services.
Then lastly, I think law firms really try to differentiate on service. It's hard for me to compete with a big firm that has a team of staff on a client floor—the art collection, the filtered water, and everything like that that gets delivered.
We have a director of client happiness and another person who works in our client happiness department. We really try to distinguish ourselves in the way that we care about our clients and pay attention to what's going on in business and how we can be helpful.
Edward: A lot of those things sound like great ways to make your clients happy and to keep your clients from churning, from sticking with you. They don't sound like top-of-the-funnel ways to get people to even know about your firm, to consider your firm, or to select your firm when they're deciding which firm to choose. How does someone know? Do you do marketing to let them know that, hey, we have a different model, come and check us out?
Stuart: Yeah, we do. Some of that is through the types of work that we do. We really try to grow through referrals. We try to do as much as possible to have our existing clients help us grow and be a part of building the firm, but we try to market ourselves in different ways as well.
We have a podcast, which is called Business Decisions where I talk to entrepreneurs and speak with them about their businesses, how their businesses are evolving, and the kinds of challenges and business decisions that they're facing. Then, I talk to one of my lawyers about one of those business decisions and the legal implications of that. So bringing together the startup world and the small business world with the legal challenges that they have to deal with.
One of the ways that we try to reach that audience is by showing that these are the kinds of clients that we work with and the kinds of things that we help people with, and hope that that resonates with people.
Edward: Does that work? There was a company here in Seattle called Avvo that was basically a marketplace for lawyers, but where they did fairly well were these Q&A things where people would post questions and lawyers would answer those questions. The reason why lawyers are answering those questions for free was the idea of someone who would read that answer and be like, oh, that's the problem I have. I should go and talk to that specific lawyer who answered that question. Is that what you're trying to do with the podcast?
Stuart: Yeah, a little bit. Most law firms are trying to do content marketing as much as possible. It's one of the things that lawyers are particularly good at. This has just happened, this development and this new legislation. Here are what the implications are for you. That's one of the things that all law firms try to do and what we're trying to do with our podcast, but also with some of the things that we put out.
We try to really think about it from the perspective of the clients and what actual business decisions they're facing right now. In particular, if you look at the COVID-19 situation, there were a lot of questions at the beginning, which were not huge legal challenges but I don't think I'm going to be using my office for quite a while. Can somebody help me understand what my options are for my commercial lease? If I have to renew my lease in the next little bit, how should I be thinking about that, one of those challenges are?
We tried to show up at TechTO events. We sponsored one of the TechTO events and had four lawyers there just to answer questions from entrepreneurs. We created a free legal help desk for people to contact us with COVID-19-related legal questions, which were largely employment, real estate, those sorts of things, and contract analysis. What does this mean? Just things that people hadn't considered until they were forced to consider them due to the circumstances.
We'd really try to just put ourselves in the shoes of our clients. What are they wrestling with? What's top of mind? What do they need help with? How do we put something out that's helpful and useful to them?
Edward: Does that work? Have you been able to track that top-of-mind awareness you get from doing that type of work through a new client coming in the door?
Stuart: I don't really try to get all that granular with my tracking on some of these things so I couldn't tell you specifically which of these initiatives is working.
The firm is growing pretty quickly. In particular, in 2021, it has been a pretty dramatic growth year for us. It's an endorsement that the things that we're doing are working. But if you were to ask me how much of that comes from the podcast, how much of it comes from the client's happiness efforts, and how much of it comes from the monthly newsletter that we put out and the content that we share to try to be helpful to our client base? I couldn't tell you what percentage belongs to each, but they all add up to a recipe that's working well for us.
Edward: When a new client comes in the door—not expanding on an existing client, but a brand new client comes in—do you ask them, how did you hear about us?
Stuart: Yeah. It's almost always from someone. Hiring lawyers is a little bit different. There are certain types of law where maybe you're going to go onto Google and just type in personal injury lawyer or something like that, and maybe you get leads that way.
In general, what we're really trying to do is make sure that we are a law firm people have heard of that have some familiarity with it so that they'd speak to one of our clients and they hear what a great experience that client is having. That we're not a name that they've never heard of or a firm that they're not familiar with. That we're in the consideration set already so that when they hear more about us, they'll reach out and get in touch.
Edward: Stuart, do people even hire law firms? Going on a little bit of a tangent, are they hiring law firms or are they hiring the individual lawyers? We talked about this referral, I’ve heard of you. Are they hearing about Caravel, or are they hearing about an individual lawyer at Caravel?
Stuart: It's definitely both. It's a little bit different than other professional services businesses. In consulting, people generally will talk about the firm and will mention the firm name. You see a lot of lateral hiring in law firms of lawyers moving from one firm to another, and the clients go with them to their new firm because the loyalty is really to that individual lawyer as opposed to the particular firm.
Sometimes it is, but a large part is the relationship with the person who's actually doing the work matters a lot more in legal services than it does potentially in other professional services for sure.
Edward: How do you do that as a running marketing for the firm? Are you trying to reduce the amount of marketing to the lawyers, or do you increase it and then leverage it for the firm?
Stuart: At the firms I've worked at—in particular at Torys—I started an initiative where we did video podcasts. We were the first firm to do that. That was really to get my lawyers out in front of people. They could see them, they could hear them, and they could see that they're not intimidating.
Torys is a pretty strong brand in legal services in Canada. In some cases, it can be an intimidating brand, so I really wanted to put people front and center so that you could see our people, hear them talk, and hear what it's like to have a conversation with these people. I think that was very effective at humanizing the firm and getting some inbound interest in the firm that way.
We would do dinners with CEOs to try to get and have speakers come in as a way of getting exposure so that more people who talk to one of my lawyers had a chance to see that they were both excellent lawyers but also excellent people to work with in difficult situations. I thought that was really important.
We do the same thing at Caravel. I have just an amazing team of lawyers. I just want more people to know about them and to have a chance to listen to them or see them in a video, at a conference, or something like that. Because the more exposure people have to my lawyers, the better the firm is going to do because we have an incredible group of lawyers.
Edward: Is the idea then that you have to have a group of lawyers at a time? It's almost like you're going to sell them as a bundle rather than as individuals. I can imagine that if you start raising the profile of any given individual lawyer, they can take that with them. That brand equity takes the elevator down from every evening at 5:00 PM.
Stuart: Yeah. To a certain extent, you have to rely on the culture of your firm and the firm that you're trying to build, that you give them a reason to choose to practice with you as opposed to going someplace else.
Certainly, you can read all these stories in The New York Times about partners that are moving from one firm to another for what I think seems like outrageous sums of money. They're worth it because they bring all that work with them.
That's certainly something that you have to be mindful of. I had one client that said to me, I'm sure you have a basket full of stars at your firm. I just don't know who any of them are. That's going to work against you if you don't put your people upfront and give people a chance to see that you do have excellent legal talent that can really help them, and that would be thought partners, real support, and trusted advisors for those clients
Edward: Are all these top law firms priced the same, or is it significantly different from law firm to law firm?
Stuart: There are definitely differences. Caravel is a lot less expensive than a traditional Bay Street law firm in Canada. It depends on the market. The rates are different in Vancouver than they are in Toronto, for example. To a certain extent, people want to feel like they're getting great value more than they want the cheapest lawyer for sure. I think legal services have signaled quality through rates.
How do I know this woman is a great lawyer? It's because she charges $1000 an hour. She must be a great lawyer to be able to charge that much for her time. That's a really important signal that they send to the market through their rates.
I'm not sure that clients want to find a lawyer that has the lowest rates because they will associate that with lower-quality either work product or service. What they really want to find is that person who feels like an excellent value. I'm getting that lawyer who's a great lawyer and who I know is going to do a fantastic job for me. I feel like what I'm paying is fair.
Edward: How does Caravel get around that? You guys are cheaper than (say) Torys. Does that signal that you're lower quality? How do you manage that?
Stuart: I don't think it signals that we're lower quality. I have a huge amount of respect for the big traditional law firms. Having spent time in one for a long time—six-plus years—I feel like I have a real appreciation for all the things that they are very good at.
There are the types of files that big, traditional, national law firms can handle that we would not be the right fit for. But I do think it means that we have to explain and share with people what is different about us and why we are at the rates that we're at. That is different than just lower quality because I tell all of the clients that I speak to that I don't want anybody to be holding us to lower standards than they hold their traditional law firm to just because we're less expensive.
We think that we provide as good or better service than all those firms, and our lawyers are all experienced great lawyers who have relevant industry experience and exceptional training. They are every bit as good lawyers as what they would find elsewhere. You have to do some education to make sure that people don't just see that it's a lower-cost law firm, but a different way of practicing.
Edward: How much of your marketing has to go towards lawyers rather than clients? I imagine, to your point, what you're selling as a business is effectively the people that are working for your business as a service firm. Having really strong lawyers is really, really important. Is marketing a part of that to make sure you can attract really strong lawyers?
Stuart: Absolutely. There's certainly a virtuous circle that gets created. The best clients attract the best lawyers, and the best lawyers attract the best clients. Once you get that virtuous cycle going, it's a nice flywheel effect that you end up with.
The matters that you're handling, the financing rounds, the IPOs, and the M&A deals that you're doing, people notice that and you end up attracting talent as a result of being seen as being in the mix and serving the kinds of clients that people want to serve.
The nice part about Caravel is we serve a lot of innovative leading startups across Canada. In a lot of cases, the fact that we serve some of these technology companies or what have you that have garnered headlines and attention over the last decade is a vote of confidence from one of those startups. It carries a lot of weight with other clients that then consider Caravel to assist them.
Edward: I see that. If you go and say, hey, we serve Google, Facebook, and Apple, that's a really good signal for clients to be like, oh, I want to go and be with a law firm that serves those guys. It's also a good signal for the lawyers to be like, hey, I want to go and work for the guys that serve those guys.
Are there other other types of things that don't have that flywheel effect? Is there a trade-off? Is there marketing that you can send out to be like, hey, this is going to be good for the clients but bad for the lawyers, or bad for the lawyers but good for the clients?
Stuart: There's always the tension in a professional services firm that jumping through a lot of hoops to make your clients happy can often come at the expense of the consultant who's asked to travel more than you would say is a reasonable amount or late nights for a lawyer that may affect their work-life balance.
To a certain extent, if you're trying to market to both at the same time and you're sending a message out to lawyers that, hey, we have a flexible model that allows you to practice from wherever you are, you have to be mindful of how that message is going to be received by any clients who are seeing that marketing.
If you are talking about what exceptional lengths to go to to provide service that goes above and beyond to your clients, that may have an effect on lawyers thinking, well, that sounds like long nights that maybe is not what I'm looking for. You do have to manage that trade-off for sure.
Edward: It's interesting. Google doesn't have that problem. Google can advertise that they have free lunches, pedicures, massage therapists, volleyball courts, and laundry on site—all these employee benefits. But that doesn't make me be like, oh, their staff is going to be coddled, therefore, I'm not going to use their search engine.
Maybe I do that if it's a lawyer who talks about, hey, we have all these special things that make people super relaxed and so on on-site. That doesn't make me want to use those lawyers anymore.
Stuart: When you hear all that, oh, that's going to be expensive might be the first thing that comes to mind. You do have to manage that.
To a certain extent, as you are out there in the market trying to tell clients about your services, it certainly is always in our mind that the people we want to come work with us are also reading those ads, reading that content, and are learning about our firm at the same time. We do always have both audiences in mind with whatever our marketing efforts are.
Edward: Which is more important? If you had to choose between marketing to lawyers or marketing to clients, which one wins?
Stuart: I generally think of most of my marketing as being towards the clients, but I am always aware that if I don't have lawyers, I have no business. I really try hard to make sure that I'm always respectful to my lawyers and trying to create an environment where they feel appreciated and respected for the skills that they have and the hard work that they put in.
Then, I rely a lot on the fact that my lawyers have all been practicing for a long time. They know a lot of the people in the market. In general, if a lawyer is considering coming to work at Caravel, they're most likely going to know somebody that works at Caravel and are going to call that lawyer and ask them what it's really like to work here. I expect that a lot of the marketing or the representation for the firm is happening without me knowing anything about it or being aware that it's even happening.
Edward: It seems like referrals are extremely important for your clients, but also extremely important for your lawyers. It feels like that's the number one marketing channel for both sides.
Stuart, before you go today, tell me about your quake book or quake article. What quake content have you read that has fundamentally changed the way you think about the world?
Stuart: In the startup world—which I came to later in my career—I would say one of the books that really had the biggest effect on me was The Hard Thing About Hard Things by Ben Horowitz. I actually take a great deal of comfort from the fact that it's supposed to be hard. I think that's true at the law firm as well.
The challenges that we've talked about today are all challenges that all the law firms face for sure. Law firms are unique businesses maybe because of the nature of the services that we provide, but they're at the core of their businesses.
We have to take care of clients, and we have to take care of our talents to make sure that they are there and ready to do a great job for our clients. We have to market. We have to worry about pricing, where we are, and what our competitors are doing. We have to think about innovation, technology, and everything like that.
A lot of times, it seems very hard, and there was a part where I took a great deal of comfort in the message that it's supposed to be hard. That's actually a sign that we're on the right track.
The piece that I always go back to and I share with people the most is this Fast Company article from the '90s which was by a world champion juggler. It was all these lessons from juggling that he shared in the article, which I thought was really insightful. It was all the things like you touch something, you let it go, and then you have to trust it's going to come back into your peripheral vision at the right moment to deal with what agony does, and then you have to let it go again.
This idea of, how do you manage all the things that you have to manage when you're a CEO or when you're running a team—as I was early in my career of a couple of hundred people? You can't watch things all the way into your hand and watch that because everything else will fall if you try to do that. You have to trust your process. You have to trust that you'll see things at the right time and have the right systems in place. You have to trust your team to do good work and manage those things.
I've shared that article with probably 40 or 50 people, I would say, in the course of my career.
Edward: That's a great way to end it. Thank you so much, Stuart.
Stuart: It's a pleasure.
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