A business, whether it is service or product based, has tangible and intangible assets. Tangible assets are items that are perceptible to the senses—they are things you can see, hear, touch, or taste, such as the building that houses your law firm, its furniture, or its computers. Intangible assets, which are not physical, include client relations, staff, procedures, brand, and goodwill. Both types of assets have value.
Brand and goodwill are intangible assets. To understand their worth, consider what they are and how they are created, maintained, and connected.
Your Firm’s Brand
A brand is a unique design, sign, symbol, words, or a combination of these, employed in creating an image that identifies a service and differentiates it from its competitors. Over time, this image becomes associated with a level of credibility, quality, and satisfaction in the consumer's mind. Brands help harried consumers in a crowded and complex marketplace by standing for certain benefits and value. (Business Dictionary).
Your brand is created. For successful branding, take the time to plan so that all parts merge into one identifiable pattern for clients. Start with a firm brand journal. Include your business goals, including planned practice additions or changes, your logo and color palette, the descriptive words you use in marketing, and a description of your target audience. Distribute to lawyers and staff so both are on the same page.
Maintain your brand with repeated use in ads, blogs, articles, and profiles like those used in the SBM Member Directory. A brand’s power is derived from the goodwill and name recognition it has earned over time, which translates into higher sales volume and higher profit margins against competing law firms.
Your Firm’s Goodwill
According to Business Dictionary, goodwill is an intangible but saleable asset, almost indestructible except by indiscretion. It is earned over the years with:
- The creation & maintenance of durable client relationships
- High quality of services
- Conduct of management & employees
Goodwill includes the worth of the firm identity. Its value is generally not recognized in yearly account books but is realized when the business is sold. It is reflected in the firm's selling price by the amount in excess over the firm's net worth. In well-established firms, goodwill may be worth many times the value of its physical assets.
Your firm owns its brand and earns goodwill. Continuous maintenance of your brand helps establish and support goodwill. Clients establish a connection with the brand and the firm. When that connection is positive, it is termed goodwill. Your brand and the resultant goodwill combine to form the wealth of your firm.
After years practicing law, Roberta Gubbins served as editor of the Ingham County Legal News. Since leaving the paper, she provides writing services to lawyers ghostwriting content for websites, blogs, and articles. She is editor of The Mentor, the SBM Master Lawyers Section newsletter.
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