In 2005, the legal market was growing at over 10% a year—almost raining business. 2015 growth is just over 1%—yet law firms continue to spend the same relative amount of money to protect and acquire clients.
Law firms currently spend 2.6% of firm revenue on marketing and business development.* This is less than half of what other large B2B professional service firms spend: 5.6%. More importantly—in 2005 law firms allocated 2.3% of revenue. In effect, marketing and business development is no more of a priority today than it was 10 years ago. Yes—the absolute dollars have gone up—but proportionally it is virtually identical to 2005.
The choice to stay within the traditional law firm spending bandwidth limits you to doing what everyone else does. This choice also limits you to what you have previously done. You can gain some advantage by redirecting the existing budget towards client-centric activities. But, you are robbing Peter to pay Paul. You have to sacrifice some aspect of MBD to grow and protect clients. Law firms have no room to play serious offense or launch new—or multiple—strategically designed initiatives proven to feed off each other.
Last Year Is Always the Benchmark
It’s easy to understand how marketing and business development budgets never changed. Budgets are compared to and built from last year’s budget. Last year is always the benchmark. Locking into increases over what we did before keeps everyone mired in last year’s thinking and ignores the future.
Few law firms have sat down during strategic planning and asked—what will it take to gain new clients and grow the major clients we have? How much will it cost and what will we get? The answers to these questions would redefine the marketing and business development budget and create an enormous of amount of sustainable long-term business—and leave other law firms far behind in the race to create the largest stable of the best clients.
Try a One-Time Experiment
Start to change slowly, or try a one-time experiment. Create a one-time temporary budget built around new marketing and business development activities not currently in the budget—but sure to attract new clients. Some suggestions:
- Original white papers
- Industry-focused SWAT teams
- Client education programs designed specifically for each of the firm’s top clients
- Large-scale client feedback covering 40% to 60% of firm revenue
- Working groups for clients to meet in person
Your success in using these tools to attract new business creates sustainable life for new approaches to the market, and spending more suited to low-growth markets. These pilot programs are a specified investment where all can assess the return—exactly the kind of data which encourages law firm leaders to throw more money at the firm’s marketing and business development to adapt to today’s market.
MBR
*Based on in-depth interviews BTI conducted with 135 law firm marketing leaders.