Does your business development strategy consist of random lunches and occasional golf outings? Is your advertising and PR limited to the Yellow Pages and event sponsorship ads? With changes in the way law is practiced washing over the legal community like a tsunami, we hope not.
Findings in a survey of American Lawyer (AM Law) top 200 law firms (ranked by profits) show expected growth and a reliance on specialization in marketing their firms. Both surveys were conducted in the first quarter of 2015.
Meanwhile, the 2015 Altman Weil Law Firms in Transition Survey shows confidence in the future.
Two-thirds of U.S. law firms with 50 or more lawyers report year-on-year (YOY) increases in gross revenue, revenue per lawyer and profits per equity partner in 2014.
- Almost three-quarters of the firms surveyed expect gross revenue to increase in 2015,
- One-third say demand for legal services has already returned to pre-recession levels, and
- 41% of firm leaders expect demand to return in the next few years.
Most firms believe that wave of change in the law profession is increasing. 72% in the Altman Weil survey say that growth will continue.
Anticipation of that growth and demand is resulting in structural changes in mid-size firm’s marketing staff and strategy.
We think the strategic changes in marketing will result in increased specialization in that area, including many firms creating the role of chief marketing officer (CMO) and using outside talent to help with business development, as well as media and public relations.
“Midsized firms are expanding their marketing and business development teams and CMOs are starting to make strategic talent investments. It’s all about moving firms forward with the tools and strategies their clients also utilize, so those roles are becoming more specialized,” said Jennifer Johnson Scalzi, of J. Johnson Executive Search, Inc.
These two studies show that opportunities in the future are abundant and that a good marketing effort can make the difference between solid growth of your firm or loss to another firm or new kinds of competition.
The Altman Weil survey noted that 83% of firm leaders believe competition is coming from “non-traditional service providers and is a permanent change in the legal market. Many firms see competition coming from inside counsel bringing services in house, client technology solutions and accounting firms. For example, in 2013, Ernst & Young’s legal arm, EY Law, hired more than 250 lawyers; a 30 percent increase to bring its total number of lawyers to 1,100, according to the Center for Study of the Legal Profession at Georgetown University Law School and Thomson Reuters Peer Monitor 2015 study: Report on the State of the Legal Market.
In addition, both the J. Johnson and Altman Weil surveys show that change is coming and law firms should be preparing for it now.
“Leaders today face a great challenge when it comes to getting team members to accept change and to think of new and innovative ideas. Many people tend to judge the benefits of new ideas based upon one of their own past experiences, even if that experience is not entirely relevant. They are quick to say “We tried that before” or “that will never work,” before they really fully understand the new idea or process proposed. Their biases and assumptions limit their capacity for creative and innovative thinking until they can unlearn old ideas,” according to the Law Firms in Transition Survey.
“Marketing and Business Development professionals have reached the C-suite at two-thirds of the respondents to the J. Johnson survey and, the head of that company noted that the marketing provides client services as well.
“But at the end of the day, marketing departments are engaged in client service just as their lawyers are. And client satisfaction is paramount,” said CEO J. Johnson Scalzi.
For example, at Grandone Media Strategies, we have gotten very positive feedback about the “value added” we have provided to law-firm clients. Most clients realize that adding a “public” point of view, in addition to lawyers’ “legal” point of view, completes the circle when law firm clients are deciding a course of action that has an impact on a community, or will have high profile coverage in the media.
In a profession where tradition and precedent are considered sacred, it is a serious challenge to face the kind of change that is predicted for law firms in the immediate present and future. Business development strategies and marketing activity need to focus on both client retention and growth. This may be perceived as putting a strain on resources.
According to an AM Law 200 Survey, marketing decision makers are managing, on average, a budget equal to approximately 2% of the firms’ revenue.
AM Law noted in its report that the AM Law 100 spending on marketing is decreasing as a percentage, while mid-size and small firms’ marketing budgets are significantly increasing in double digits in 2015.
According to Bloomberg BNA, “Of all the business disciplines required to survive and grow in a challenging environment, marketing is the most frustrating and difficult for lawyers and the partnerships they inhabit. Few like it and few do it well.
But that’s the opportunity, isn’t it?”
Jim Grandone is President of Grandone Media Strategies. He can be reached at (618) 692-1892 or at email@example.com