Marketing Business Development

Volume 3 • Issue 1 • November/December 2016
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The Past, Present, and Future

Marketing and business development in law

“Brobeck. When your future is at stake,” read a narrator at the end of a series of stylized early-2000 advertisements for the now-defunct law firm Brobeck, Phleger & Harrison. “Innovation, teamwork and excellence. These are our shared values and the fuel that drives our unique corporate partnership: the only one of its kind between a global law firm and a Formula 1® team in the world today,” reads the website of the major international firm Norton Rose Fulbright in announcing its partnership with McLaren Honda.

 

Make no mistake about it: marketing and business development are facts of life in today’s legal profession. Some lawyers may still cringe at those terms, conjuring up visions of crass billboards dotting the sides of highways and tacky commercials of talking heads hawking legal services. For these skeptics, lawyers or law firms that actively promote their services risk degrading the legal profession. Nevertheless, over the past four decades, there has been a dramatic shift in how firms approach the business aspects of the practice of law, including by developing robust marketing and business development practices. Most—if not all—top corporate law firms now employee high-level professionals in marketing and business development positions and are directing considerable financial, technological, and people-based resources toward honing their ability to find, gain, and retain clients. In this article, we review the past, present, and future of marketing and business development for law firms, both how it has changed over time and the increasing role that business professionals play in the increasingly competitive legal market.

Old ways of doing business

As a profession, lawyers traditionally view their work as being more than just a set of services offered in exchange for a fee. They typically view themselves as trusted, skilled, and thoughtful advisors—advocates who have clients, not customers, and are charged with upholding the highest principles of the rule of law. In many ways, as a result of this self-image, from the early 20th century through the 1950s and ’60s, legal marketing in the United States was highly regulated and, in many instances, outright banned through bar regulations. (In some international jurisdictions, such as India, legal marketing and, in particular, advertising remain a sticky wicket.) And, very much in accordance with the tenets of professionalism, there was not a huge amount of pushback from lawyers, who viewed marketing and advertising as something for soft drink companies, and business development as something to be done over dinner, on the golf course, or through a relationship.

This all changed in the late 1970s, when a few lawyers in Arizona advertised their services in a local paper. The lawyers, who were disbarred, sued the state. The case ultimately reached the U.S. Supreme Court in Bates v. the State Bar of Arizona, which ruled that the restrictions of advertising and other forms of marketing were antiquated rules of etiquette.

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From that point on, marketing and business development within law firms took off. In 1981, Jennings, Strouss & Salmon, an Arizona-based firm, became the first firm to hire a full-time legal marketer. In 1984 the growing community of legal marketers began to build a professional network (see sidebar). Early marketing efforts were, admittedly, relatively rudimentary, consisting mostly of basic advertisements and brochures. For instance, McGuireWoods gained a measure of notoriety when Businessweek and the New York Times published a black-and-white, all-text copy of its brochure.

 

One should stress that while external marketing was one thing, business development typically remained the responsibility of the partners. (We discuss the relationship between marketing and business development below.) Derek Davis, executive director of Harvard Law School’s Center on the Legal Profession and a longtime corporate law partner, remembers how much business development was protected by firm leadership. Davis recalls the skepticism of firm leaders toward the ability of business professionals or young associates to bring in new business.

The attitude was really one of, “If you don’t know how to do the work, you can’t market the work.” Back then, we certainly didn’t have nonlawyer professionals marketing the work—in fact, even associates weren’t expected to market. They might have helped with pitches or with development meetings, but they were seen and not heard. It would have been presumptuous if an associate thought that they knew enough to do that.

According to Davis, business development for law firms used to be about two things: pedigree and parochialism. Firms attracted new business not because of their brand but because of their partners and whom they knew. They attracted new business through building personal relationships and conveying a sense of trustworthiness, steadiness, and reliability.

New clients and new expectations

Traditional marketing and business development models began to change in the 1990s. First, the model of partner monopoly over business development took a hit in the mid-1990s with the rise of Silicon Valley and the dot-com bubble. Experienced partners found themselves and their firms flat-footed in courting the young entrepreneurs whose companies who didn’t fit the typical corporate model but were dramatically altering the business landscape. For the first time, young associates were often in a better position to leverage their personal networks and ways of doing business to bring in new clients. In addition to being the same age as the rising business elites, these associates were also better positioned to capitalize on the new zeitgeist, which privileged savviness over staidness and efficiency over conservatism.

Second, larger shifts in the legal market prompted more considered examination of a firm’s marketing and business development strategies. Most notably, the growth of in-house legal departments and the drive to do more with less created new pressures on firms to both win clients and justify the cost of their services. (For more, see “The Changing Role of the Global General Counsel.”) Newly empowered general counsel began to take a close look at previously unexamined fee structures and relationships with firms. Davis recalls:

Clients with whom we had been working for years began to ask us to respond to RFPs and to justify costs. The idea of firm loyalty disappeared, as did the idea that we could submit a one-line bill that read: “For Services Rendered.” We realized that things had changed and that we now had to really hustle to not only find clients but keep them.

This changing business culture and increasing scrutiny from in-house counsel meant that firms had to find new ways to differentiate themselves. Marketing and business development became more than just nice brochures; it became a way for firms to differentiate themselves, connect with clients, and understand and sharpen their competitive advantages.

As a case in point, an April 2016 Bloomberg-LMA survey found that 68 percent of respondents—a combination of lawyers and marketing professionals—found that “more internal pressure to generate revenue” was the main catalyst for firms increasing their marketing and business development efforts. Other common reasons included GCs reducing the number of firms they will work with (46 percent), pressure from other firms that are effectively using marketing (43 percent), and clients requiring new billing models (41 percent). Interestingly, only 15 percent noted alternative providers (for example, Axiom) and new legal technologies as a core catalyst for increased emphasis on marketing or business development.

Implicit to all of this is how firms structure their marketing and business development functions. According to the Bloomberg-LMA survey, 60 percent of respondents noted that “Marketing” was the name of the department responsible for marketing, business development, competitive intelligence, public relations, and event management. “Business Development” (18 percent) or a combined “Business Development and Marketing” (10 percent) were two other common departmental headings. When business development was separated from marketing, the most widespread reason was that the latter rarely dealt with pricing.

This meant that the remit of marketing and business development professionals had exponentially expanded. In an effort to educate the legal marketing community and build best practices, the Legal Marketing Association’s Education Advisory Council recently released its core Body of Knowledge (BoK), identifying six core areas of domains, competencies, and associated skills needed.

  • Business development. A core role of all marketing and business development professionals is driving new business and revenues, both directly through outreach to potential new clients and client development and indirectly through lawyer training, including how to craft pitches and other business development methods.
  • Business of law. Understanding client behavior is at the heart of marketing, so legal marketers strive to help their firms conduct in-person client interviews, online surveys, and other practices for understanding what they did right, what they did wrong, and how they are perceived in the marketplace. By correlating client data with revenue charts, marketing and business development professionals can help the firm’s financial team understand which client-relations practices and types of cases are resulting in the most value for the firm. As Lisa Hart Shepherd notes in the lead article of this issue of The Practice, brand management is one of the most overlooked business aspects of running a law firm today. By helping a firm create a strong firm identity through consistent client-relation practices, marketing professionals can help ensure that every lawyer is doing their part to reinforce their firm’s messaging and reputation.
  • Client services. From helping partners prepare pitches to ensuring the steady use of customer relationship management (CRM) software, legal marketers are involved in the day-to-day practices of obtaining and maintaining clients. This includes project management techniques within firms.
  • In addition to more typical marketing duties, such as managing the firm’s website and creating advertisements, this field also includes writing blogs (according to a recent Legaltech survey, 25 percent of law firms now have blogs) and hosting seminars to showcase a firm’s expertise and highlight its lawyers.
  • Marketing leadership. Effective marketing leadership within a firm fosters collaboration between marketing and business development professionals and lawyers.
  • Technology management. Identifying new technologies and data sources will help drive firm performance, including identifying new clients through business intelligence and big data, creating systems to manage and retain existing clients, and finding ways to grow the firm’s overall strategic presence.

Who are the legal marketers?

Who are these legal marketers? A recent study by ALM shows that a large majority of marketing professionals in law firms do not have J.D.’s (approximately 91 percent). The most common graduate degree is an M.B.A. (13 percent). The study also found that women (78 percent) vastly outnumbered men (22 percent) in marketing jobs. Interestingly, data from an April 2016 Bloomberg-LMA survey shows that marketing and business development professionals are just as likely to come from outside the legal profession as within, perhaps reflecting the growing need for marketing and business development skills not traditionally found in law firms. Budgets and FTE staff have tended to grow over the past two years. The survey also found that 57 percent of respondents reported a growth in their firm’s marketing and business development budget over the past two years. Similarly, firms are staffing up, particularly in the areas of business development, competitive intelligence, pricing, and marketing—functions that are typically bundled together under a marketing director (see below).

Number of FTEs

Source: Bloomberg Law-LMA 2016 “Are We There Yet?” results

This community is also growing in both size and professional identity. The Legal Marketing Association (LMA), which is the leading professional association for the field, has more than 4,000 members and 8 regions in the United States and Canada. At its core, the LMA endeavors to educate and connect legal marketers throughout the arc of their careers.

Integrated firms?

As marketing began to merge with business development practices, it became critical for marketing departments to be integrated with the rest of the firm. Jill Weber, the chief marketing and business development officer at Stinson Leonard Street and 2017 President of the Legal Marketing Association, describes the importance of this interdisciplinary approach to marketing and business development:

Legal marketing is evolving to become the voice of the client, providing the client’s perspective and guiding initiatives that help deliver great client value. As part of that, we are seeing a more interdisciplinary approach to revenue generation.

Weber stresses that “marketing can’t be in a silo: our ability to deliver value to our clients is closely tied with our ability to collaborate with other administrative functions within our firm.” She continues, “We work closely with our IT department on technology solutions, with our finance team on pricing models, and with legal project management to create staffing models and process efficiencies to deliver client value.”

With so many different avenues and approaches for marketing and business development, it can sometimes be unclear how a firm should utilize its resources. For Weber, one of the biggest mistakes a firm can make is to spend too much time and money on what she calls the “one-to-many” tactics—indirect marketing tools (advertising, presentations, etc.) that are less time intensive but also less effective. More important, Weber suggests, are the one-to-one tactics of business development, in which the firm directly contacts clients. She explains:

To use a football analogy, you can think of marketing as a zone defense, whereas business development is a man-to-man defense. So it’s much safer, and painless, for a firm attorney to give a presentation at a seminar, but the chance that this will result in new business is low. Client visits and prospect pitches  are more painful and require more effort, but they are more effective. The more you are with a client, the better.

There is evidence that the sort of integration Weber is talking about is occurring. According to the April 2016 Bloomberg-LMA survey, 88 percent of the attorneys surveyed and 99 percent of the marketers surveyed noted that their relationships have remained positive or improved over the past two years. Both sets of respondents stressed the need to “collaborate,” to be “supportive” of each other, and to be “responsive” and “reflective.” It should be noted, however, that “challenging at times” was in the top five key words of the majority of attorney respondents, compared to only 25 percent of the marketers. Perhaps more problematic is that attorney respondents were much more confident and positive in their views about marketing and business development when it comes to planning events and providing support for client pitches and brand awareness. They were more much circumspect with respect to their ability to help strategically position the firm and were skeptical of the need to integrate business development into lawyers’ daily work flows.

European advantage?

Although they might hate to hear it, American law firms could learn a lot about business development from their counterparts across the pond. British and European law firms have long since understood the important role marketing can play in running a prosperous and successful legal practice, and many of them have marketing departments that are well staffed, resourced, and integrated within the firm leadership. Wiersholm, a top Norwegian firm and leader in the European legal marketplace, has a robust marketing and communications division that manages the firm’s public relations, client relations, and strategies for business development. As an example of the extent of the firm’s commitment to integrated marketing, the firm no longer divides its lawyers in terms of “practice groups” but rather in terms of “market groups.”

Christine Liӕker Lindberg, the director of marketing and communication at Wiersholm, stresses that marketing and business development at the firm is not something that can be separated from the rest of legal practice; it’s something all lawyers need to be a part of. “We want to create one tone of voice in the market for how we are doing things, to shape a ‘Wiersholm way,’” says Lindberg. “For this, we realized that we had to encourage and educate the lawyers in how they interact with their clients at every stage, from pitching, project management, to networking, to leading meetings, even to writing e-mails.” The firm has also made active use of technology and data. Lindberg points out that Wiersholm measures everything. “We always try to measure everything our firm does. We have a client management system that captures virtually all the marketing activities our lawyers do. We then put together reports so that we can measure what the different lawyers and groups are doing, and try to link that to the revenue and other core metrics.”

Lindberg is fully integrated into firm leadership. “I’m a part of the management team. I attend board meetings and partner meetings, and work mostly with our managing partner and the CEO. This allows me to give the best advice that I can.” At the core, Lindberg says, effective marketing and business development means always being “client oriented” and constantly working to ensure that every member of the firm is committed to cultivating and maintaining the firm’s brand.

The future

So what does the future hold for legal marketing and business development? While some fear a marketing arms race among firms eager to differentiate themselves, it is more likely that firms will choose to be smarter, rather than stronger, in their efforts to develop and maintain business. As Weber describes, one way for firms to do this is to develop “target client profiles,” which they can use to better focus their attention and efforts. Weber explains:

You can’t just say “We want to represent all privately held companies in this geographic region.” You have to find your sweet spot, which is determined by a number of things: What’s the revenue of the company? Who is the point of contact within the company? What’s the company size? What’s the industry? Firms need to be very specific in determining whom they want to serve, because then they can more effectively communicate with them.

As a result, it is all but certain that the role of data will increase in business development and marketing. By using technological software, firms are better able to capture how lawyers are interacting with clients and how such interactions might correlate to revenue. Firms can then use these measurements of past and current performance to create goals and to compare firm activity in the long term. Furthermore, by both conducting their own client surveys as well as working with third-party vendors, firms are able to better assess their reputation and manage their brands. For this reason, it’s critical that marketing directors have a close relationship with the firm management teams and are given a voice within conversations about the firm’s strategies. All of this means that lawyers might need to become more comfortable with the increasing role of professionals who are not lawyers within firm leadership.

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Marketing Business Development Volume 3 • Issue 1 • November/December 2016

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