How Personal Injury Marketing Has Been Affected by Disruption and Digital


  Guest blogger:

  Josh Whiten is the founder of Webscape and has worked in marketing for over 20 years including   the last 10 years in SEO and digital, so is something of a veteran.

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Discover how classic market disruption, the dawn of digital marketing and a ban on referral fees  have combined to create challenges and opportunities for legal marketing in the UK Personal  Injury claims sector. This review of the marketing conditions faced by the personal injury sector identifies some of the challenges faced by individual law firms.


Recent UK law changes affecting the handling of referral fees in the personal injury claim sector present an example of how wider changes in the external macro environment combined with developments in digital marketing can disrupt an industry vertical and force the reshaping of business models.

The Market

The personal injury sector of the UK legal market has exploded in recent years with the rise of marketing groups, national brands and new intermediaries such as claims management companies (numbering 2, 435 CMC’s in March 2012) all marketing to consumers and receiving referral fees from law firms in return for passing on details of potential claimants.

Some aspects of the sector have been dismissed as ambulance chasing or even ridiculed for unintentionally amusing daytime TV ads, but none the less the Personal Injury market has become worth a small fortune, with over £6 billion of costs awarded to over 800,000 successful personal injury claims in 2008/09 according to research from Datamonitor. This sector is also serviced by a sizeable tail of legal and administration jobs managing claims.

Referral Fee Ban

However concerns about the PI sector at both consumer and government level have grown just as quickly as the market itself. These concerns, chiefly whether the market and its use of middlemen actually encourages increased or fraudulent claims, gave rise to a judicial review by Lord Justice Jackson which resulted in new legislation being introduced in April 2013 as part of LASPO (the Legal Aid, Sentencing and Punishment of Offenders Act 2012).

The new rules have put claims management middlemen out of business by outlawing the payment of personal injury referral fees for receiving details of potential claimants. The payment of such fees were seen as ‘money for nothing’ which merely served to inflate costs of pay outs by the insurance sector, although this view does not take into account the marketing costs incurred by middlemen in generating their leads.

The effectiveness of using a blunt tool such as LASPO to tackle some of these issues was argued at length by the legal sector, especially as the insurance industry which blamed growing premium prices on false injury claims was also benefiting from receiving referral fees from solicitors for passing on details of their clients who had been in an accident.
It was also argued that the personal injury claims sector merely reflected society itself – if consumers didn’t want to claim the market wouldn’t exist, somewhat similar to the conflict between society criticising the moral standards of tabloid newspapers but then buying the very papers in question by the million.

However one thing is clear, the referral fee industry model which was in existence for the last few years and which many firms profited from has come to an end. This caused a state of flux within the sector, which of course created challenges for some but opportunities for others.

The Macro Environment

Those who have studied marketing at any formal level may find some of these developments familiar. Marketing professionals have long been taught to consider trends or changes in the wider external macro environment as part of the strategic marketing planning process. The acronym of SLEPT springs to mind, the well-established analysis tool which reminds marketers to look at Social, Legal, Economic, Political and Technological factors that could potentially impact upon their business.

The LASPO reform which affected the legal sector ticked several of these boxes:

• Concerns in society over the rise of so called compensation culture (fuelled in part by tabloid media) contrasted with the growing trend to make a claim following an accident or injury;
• A political desire to be seen to tackle issues of concern to voters such as rising insurance premiums and claim culture;
• The legal impact of new legislation, through the introduction of LASPO;
• Growing use of technology by consumers to find lawyers to help them claim and by law firms to reach consumers.

Impact on Law Firms

Law firms which in the past had relied on external third parties for personal injury leads were left facing difficult decisions. Should they invest rapidly in their own marketing campaigns direct to consumers and embark on a very steep learning curve? This with the risk that their individual marketing budget won’t go far in a sector where average cost per clicks for PPC advertising on Google Adwords can often reach £50-60 per click. Or do they pull out of the PI market altogether but then how is this fee revenue going to be replaced and sizeable PI departments sustained?

Some marketing umbrella brands already existed in the market and represented some of its best known players through extensive use of above the line advertising. However membership of these schemes proved prohibitively high and in some cases blocked to new entrants. There were also concerns over the compliance of such models in the post-LASPO world, with schemes facing the same challenges of ensuring no payments made by panel solicitors could be defined as outlawed referral fees. To overcome this some national networks developed a model whereby law firms would purchase a small share in the business and in return receive a proportion of PI leads.

Another new business model to emerge from the chaos was that of the marketing collective. These typically leaner operations utilised lower costs and more measurable below the line marketing techniques such as digital, direct marketing and field marketing. As well as operating in a more stealthy fashion, collectives have taken a more creative approach to overcoming the new rules on payment of referral fees.

One such example is the Simply Lawyers brand which offers its panel of personal injury solicitor’s membership via a fixed monthly marketing fee to be paid by each firm. The collective then pools these resources to reach target consumers more effectively and provides the details of potential clients to its panel members based on their specialism and the level of their membership plan. To further ensure compliance with the ban on personal injury referral fees a wider range of legal services are targeted.

Collectives such as Simply Lawyers are especially embracing digital marketing communication channels, due to the lower cost per acquisition and the opportunity to compete on a more level playing field with often much larger competitors particularly using some of the latest digital marketing techniques like social media, mobile and inbound marketing.

The Future

So in summary the personal injury sector has seen a fascinating set of conditions come together to disrupt a high value market and create new opportunities. Political, media and social pressures have combined to bring about a legal change that’s being exploited by a new generation of smaller tech savvy participants, eager to steal market share and deliver future value from under the noses of more established industry players. Meanwhile individual law firms which have decided to go it alone with their marketing are still working hard to identify affordable marketing channels which can be effectively managed within their firm’s resources and marketing skill-set.

If it can be assumed that there won’t be a sudden decline in the number of consumers wishing to claim for personal injury compensation, then the near future could see continued growth for legal marketing groups and collectives balanced with perhaps a fall in numbers of individual law practices operating in the personal injury sector, unless law firms are able to grasp new ways of doing things and seek the support of specialist marketing advice.

This post was originally published on the webscapeseo blog on 30 October.

2 thoughts on “How Personal Injury Marketing Has Been Affected by Disruption and Digital

  1. Today, I went to the beach front with my kids.
    I founnd a sea shell and gave it to my 4 year old daughter
    and said “You can hear the ocean if you put this to your ear.” She put the
    shell to her ear and screamed. There was a hermit crab
    inside and it pinched her ear. She never wants too go back!
    LoL I know this is completely off topic but I had to tell someone!

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