In the latest "Practice Innovations", we see how measuring a firm's marketing & sales efforts can provide a clear picture of the value added.
Connecting Marketing & Sales activities to a firm’s return on investment (ROI) is becoming an ever-more important tactic to demonstrate what is working to drive revenue and what has little or no impact on revenue. Indeed, the C-Suite’s role in capturing and managing this important data is critical for holding a firm’s lawyers accountable for activities, time, and dollars spent, as well as to illustrate the role that the Marketing & Business Development team can play in managing this process and showcasing its value.
Yet, when focusing on Marketing & Sales, most partners spend 80% of their time on marketing activities — such as speaking, writing, or attending seminars and webinars — and 20% of their time on sales activities such as direct relationship-building activities. These ratios need to be reversed; and, given most lawyers’ current priorities, it’s no wonder law firms have difficulty seeing significant results from their investment in this area.
Indeed, lawyers should be spending a large majority of their time on sales activities — meeting with clients face-to-face, or speaking by phone or virtually. Far less of their time should go to marketing, such as writing, speaking, etc., than currently does.
Filling this gap
Data from Thomson Reuters Strategic Insights in 2021 shows some of the sharpest cuts that law firms made were made to their Marketing & Business Development budgets and teams. Further, these team leaders report that their departments saw a significant uptick in hours spent on Marketing & Sales projects and requests. In fact, most of that time was spent on marketing activities.
Clearly, law firms need to address the gap between overall firm strategy and how Marketing & Sales’ resources are deployed, along with many law firms’ unwillingness to hold partners accountable for how their Marketing & Sales dollars are spent.
In fact, without such accountability and strategic alignment, Marketing & Sales activities may appear random to the general partnership, creating i) a misunderstanding of the role Marketing & Sales professionals play at the firm; ii) little opportunity to collect significant data for reporting ROI; and iii) little to no communication about the value any of this brings to hard-working partners.
Different ways of tracking the data
Now, however, some firms are slowly beginning to focus their efforts to align Marketing & Sales with strategic objectives and leverage better ways to track and monitor Marketing & Sales activities and demonstrate its ROI. With the help of new software tools to aid with data gathering, there fortunately are new methods to report the data and understand ROI more clearly; and while the data may not be shockingly insightful or innovative, the practical aspects of reporting it can be useful.
For example, one global Midwest-based law firm’s team of four sales people — yes, sales people — review confirmed registrants and attendees for firm-sponsored webinars, seminars, and other events. They then follow up with each registered individual and attendee (including those who register but do not show up for the event) to schedule a follow-up call with an individual firm partner. Partners are coached to prep for each call, and the sales team stays in the loop to ensure proper follow through.
Ultimately, the number of attendees/registrants, the number of successful follow-up calls and appointments, and the number of resulting work matters gained are all tracked. This series of activities follows what is traditionally known as a sales funnel, which allows firms to keep track of all the activities involving new or existing clients and new or follow-on matters, which then can illustrate a clear picture of the ROI to the firm.
Law firms need to address the gap between overall firm strategy and how Marketing & Sales’ resources are deployed, along with many law firms’ unwillingness to hold partners accountable for how their Marketing & Sales dollars are spent.
Quite a few firms track all lawyer-written articles read by visitors to their websites; specifically, how much time is spent on which article topics, which can indicate visitors’ areas of interest. Follow-up calls are made by either partners or trained sales people to invite interested individuals to speak with a partner on the topic of interest. Again, tracking hits to articles, number of follow-up calls and emails sent, and opportunities to discuss clients’ needs are all tracked, and the results are reported at monthly partner meetings, thus keeping all partners apprised of how Marketing & Sales are spending their time and the results gained by partners’ marketing efforts.
Another small but growing group of law firms have hired client-facing sales people. These individuals are hired to, as one global Chief Marketing & Business Development Officer put it, “to be boots on the ground, go to conferences, pick up leads, and help partners follow up on opportunities.” Saving partners’ time shows the value Marketing & Sales brings to the overall firm, and tracking these activities and leads, as well as promoting better follow-up and opportunity — shows how these actions can result in benefits to a firm’s bottom-line.
Tracking other value sources
For many of the firms described above, not all ROI is being tracked to just revenue. As one Chief Business Development Officer from a regional boutique firm notes “increasing relationships is key to increasing revenue. Therefore, our focus is on how many new relationships we can develop from our outward facing activities. We know revenue will follow, but sometimes that takes time — months or even years.”
One notable way to measure ROI in connection to relationships is to ask the Business Development & Sales professionals to roughly track time spent on building leads and new relationships, meeting with clients, and finding new opportunities for partner introductions and pitches. “These activities save partners a lot of time that they can spend billing clients,” says the Chief Business Development Officer. “While this data is not as specific as actual numbers or dollars in door, we are saving partners a lot of time. We then pull partners into relationships to move them though the next steps toward closing business. This creates huge ROI and our partners are beginning to recognize this.”
Other professionals, like those on key client teams (sometimes called strategic account teams), will measure ROI differently in a number of ways. For example, one global Account Team Director demonstrated how there is hope for these teams to perform at a higher level. While many key client teams in many firms have stagnated or simply meet to discuss ways the partners can pitch work, the Director’s team framework is built on a successful process that she brought over from her previous work within a Big Four accounting and consulting firm.
“Simply stated, our team leaders have job descriptions and our team members have job descriptions,” she says, adding that these professionals are measured on the number of new relationships built, number of new matters created, the amount of additional revenue and profitability generated, and the value-added benefits clients receive as a result of their teams’ understanding of the clients’ goals and new business requirements in new areas.
Marketing & Business Development activities require careful analysis to determine a firm’s ROI. Random acts of Marketing & Sales activities for which there is no accountability (yet keeps the Marketing & Sales teams in overdrive), do nothing to help the firm, or the Marketing & Sales teams themselves. Rather than leave everyone wondering what the firm is getting for all the dollars spent on Marketing & Business Development activities, law firms should find ways to align all Marketing & Sales activities to their firmwide strategic and revenue goals, including key practices such as tracking ROI from all important activities involved and reporting results on a regular basis to the partners.
Only by gathering measurable data, ensuring accountability, and providing results to leaderships can law firms stop all this wondering and leverage their Marketing, Business Development & Sales activities into robust bottom-line improvement.