With Gavin Ward

The personal injury referral fee ban

The government is seeking to ban the payment of referral fees in personal injury cases. The reasons include the ever-higher costs being charged by insurance companies, encouragement of a compensation culture in the UK and fostering of an industry pursuing claimants for profit. Given the potentially detrimental impact of this announcement for claims management companies (CMCs), it may be an idea for personal injury law firms to look at other ways of generating business. One such way is to focus on their own online marketing strategies and increase relevant online enquiries.

What referral fees are to be banned?

The types of referral fees which could be banned and potentially criminalised include the following two main situations:

  • Where a person seeking to bring a claim for damages views a TV advert or claims website or SMS text message and has their details passed to a CMC which then refers the claim to a personal injury solicitor for a referral fee;
  • Where a person injured in a motor accident has their details passed by an insurer to a CMC (and then to a lawyer) or direct to a personal injury lawyer for a referral fee.

Other methods of referral happen on a daily basis and it is not yet clear whether the ban in its proposed form will defeat all types of referral fees in respect of personal injury claims.

Additionally, some bodies, including the Law Society of England and Wales have sought bans on referral fees in additional areas such as conveyancing.

Effects of the proposed ban

It is not yet clear whether the proposed ban will serve its purpose in reducing motor insurance premiums or in curbing a “compensation culture”, or alternatively whether the ban will reduce access to justice. What is becoming clear is that changes are being made to business plans and internet marketing is at the forefront of these changes.

Currently CMCs invest heavily in internet marketing, particularly in respect of search engine optimisation (SEO) to get their claims websites to the top spots in Google for relevant keywords. They also invest in social media activities, using blogs, Twitter, LinkedIn and Facebook. These efforts generate large volumes of enquiries and result in many potential clients which can then be referred on to law firms.

CMCs may respond in two main ways. First, they could continue to invest strongly in SEO and social media activities, while employing lawyers to work for them on an ABS basis, as Legal Futures editor, Neil Rose, suggested recently in the Guardian. By doing this, the CMCs should be able to stay alive and continue to generate business through their websites and social media accounts. Or, they could sell their optimised websites and social media accounts to personal injury law firms so that the personal injury law firms themselves receive more accident claims enquiries and resulting clients.

What about personal injury law firms? In recent years we have seen an increasingly competitive online search market, particularly for personal injury related keywords. With the looming referral fee ban, online search for such keywords will inevitably become even more competitive.

Personal injury lawyers should reflect on their firm’s current online marketing approach. For example:

  • Where does our firm rank in Google for “personal injury lawyers” or long-tail keywords such as “accident at work lawyers london”?
  • How much business, if any, is being generated through our website?
  • How strong are our social media activities?
  • How much business, if any, is being won from social media activity, such as through Twitter or blogging?

In order for PI firms to take advantage of the upcoming referral fee ban, they should develop their online marketing strategies so as to gain further direct business for themselves without relying too much on third parties.

Attracting online enquiries

Given the increasing use of the internet by potential law firm clients, it is important for firms to try to generate the most relevant online enquiries (the “good” ones) rather than chasing irrelevant enquiries (the “bad” or potentially “ugly” ones).

Free legal advice?

Delia Venables provides a list of law firms that provide free initial legal advice on her website. This shows that a wide variety of law firms do this.

Promoting a free initial advice service online can increase the number of enquiries but it may not be in the best interests of the firm to offer even a limited proportion of their lawyers’ time and legal expertise for free. But law firms must find some value in at least saying that they provide free initial advice. Probably the best reason for doing so is that it shows a firm to be helpful and approachable and the potential client will be encouraged to step through the (real or virtual) door.

In order to promote free initial advice on a website to attract relevant enquiries, there should be highly visible calls-to-action on the main landing pages for viewers to call a phone number, send an email or complete an online enquiry form in order for them to get free initial advice. For instance, having the phrase “Free initial advice” above a phone number rather than “Call now” will generally lead to more phone calls. It can also be useful to place contact details in the meta descriptions of landing pages.

In our experience it is better to have too many rather than too few calls-to-action on a website, provided they don’t cause confusion. Viewers should find it as easy as possible to carry out the action you wish them to take. It should, therefore, be easy for them to locate both relevant information and contact details.

Online enquiry forms

Some firms may prefer to have most of the calls-to-action to refer to the completion of an online enquiry form so that they can have information presented to them in a neater manner. To siphon the irrelevant enquiries it can be a good idea to include statements saying, for instance, that the firm does not accept legal aid work, or additional form fields can ask for more information about the type of dispute or for any relevant Word or pdf documents to be uploaded. One of the drawbacks from this is that potential clients may be discouraged by too much form-filling preferring to have a telephone conversation or email exchange.

Phone numbers and email addresses

Nevertheless, one of the difficulties with advertising free initial advice and directing viewers to a phone number is that the firm’s phone lines may become bombarded with some irrelevant enquiries. Indeed, some of our clients have specifically asked for all mentions of “free initial advice” to be deleted from their website because they were receiving too many “bad” or “ugly” enquiries. But it generally depends on the type of legal practice concerned.

Similarly, providing an email address may encourage a significant amount of spam or junk mail if reasonable filters are not put in place.

Conclusions

In our experience, for firms getting started with website marketing to generate business, varied calls-to-action offering free initial advice through phone numbers, email addresses and online enquiry forms are to be welcomed. Once firms reach the point where they are attracting too many enquiries, which is heavily dependent on solid search engine rankings and website traffic, it can be useful to tailor the approach to attract only the best possible clients.

Stephen Moore and Gavin Ward work for Moore Legal Technology which specialises in helping law firms and professional services companies generate business online as well as legal website design, SEO and social media for law firms.

Email gavin@moorelegaltechnology.co.uk.

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