Law firms can better face competitive challenges if they are willing to make a robust marketing and business development strategy part of their efforts
KEY BISCAYNE, Fla. — Today’s legal environment offers a lot of competitive challenges, yet law firms willing to address these challenges can gain tremendous advantage — if they are willing to make a robust and well-supported marketing and business development strategy part of their efforts.
At the kick-off the 27th Annual Marketing Partner Forum Thursday morning, event co-chair Silvia L. Coulter, Principal and Business Development Practice Leader at LawVision Group, and Mark Medice, Principal and Data Science Practice Leader at LawVision, laid out with data where the legal industry is in terms of its commitment to marketing and business development, and where it could go in the future.
Presenting first a snapshot of the legal industry today, Medice showed that 2019 was a year of interesting and sometimes contradictory activity within the legal industry. “Certainly, 2019 was a fascinating year,” Medice said. “We saw a mix of client demand increases and more outside counsel engagement activity, which allowed many law firms to do well.”
Indeed, according to the 2020 Report on the State of the Legal Market, “demand, rates, and headcount all grew during 2019”… and “average revenue growth across the market was up 5.4% percent for the year.” The report was published earlier this month by Thomson Reuters Legal Executive Institute and Peer Monitor® with The Center on Ethics and the Legal Profession at the Georgetown University Law Center.
Expecting Better Results
Coulter and Medice then live-polled the overflow audience at the Forum about what they expected their law firm’s results to be in 2020, compared to last year. Interestingly, more than half — about 57% — expected their firm’s financial results to be stronger than in 2019; just about 11% expected weaker results; and roughly 32% expected their results to be roughly the same as last year.
“This is a pretty optimistic group,” joked Coulter, noting a majority of the crowd expected better financial results this year. Of course, she continued, those involved in marketing and business development need to have optimistic outlooks.
The pair then presented the results of the 2020 Annual Marketing Partner Forum Survey, showing how in many ways the survey’s results were in line with how the audience was responding. The survey showed that about 60% of respondents expected the budgets for their sales, marketing and business development efforts to be increased by more than 10%.
However, this expectation compares a bit poorly to the actual increase of 16% in marketing budgets over the past two years, as reported by respondents in the survey. These numbers were a cause of some worry for the Coulter and Medice. “I think it is a concern if firms are not investing in the administration and systems needed to grow their client development possibilities,” Medice said.
“I think it is a concern if firms are not investing in the administration and systems needed to grow their client development possibilities.”
In fact, he added, this kind of attitude is not sustainable as the industry becomes more competitive and challenging. “I think many firms are actually uncomfortable with the term ‘sales’ because they view themselves as a professional services provider,” Medice noted. “But I think that will likely change, whether in terminology or otherwise.” He added that issues of client growth and business development are just too important for firms to not give them full attention. “This will change and is already changing.”
Also concerning was how little firms devoted to tracking their marketing, sales and business development efforts, especially as a measurement of their return on investment. For example, 64% of survey respondents said their firm doesn’t measure the ROI on sales activities at all. Coulter said that was not a good indicator, and suggested one easy way to start the measurement process was to simply track sale forecasting.
Focusing on Client Growth
Next, the audience was live-polled again as to what areas of marketing and business development were most important to their firm. Not surprisingly, about 61% said it was focusing on client growth and mitigating attrition; and roughly 19% said it was on getting new clients. Others cited improving pricing and profitability, managing costs, and pursuing innovation.
Medice said that “overall, I think we’re seeing a pretty positive trajectory” in the way most firms are beginning to address their marketing and business development strategies. “I think now they’re looking at how best to accelerate those efforts.”
The audience echoed that sentiment. When asked what trends they see for 2020, the largest portion — 38% — said it was the “refinement of our client approach”; while 19% each said “better use of client teams” and “evolution of our business development teams.”