How Law Firm Marketing & Business Development Teams Can Deliver In A Pivotal Year
Law firms must free up their marketing and business development teams to take advantage of key opportunities in the post-pandemic legal environment.
2022 has been a busy year for most law firms. Law firms continued their strong performance in the first half of the year and are on track for a record high in 2021. But in mid-2022, law firm demand and earnings slowed and costs began to climb. At the end of last year, it appeared that many law firms had succeeded in adjusting the ratio of labor costs to income, thus stabilizing earnings growth per attorney. But even now, 2023 presents unique challenges for most companies, and Chief Marketing Officers (CMOs) play an equally unique role in solving these challenges.
Even if 2023 seems to have started well, the collapse of several regional banks, the ongoing war in Ukraine, and the uncertainty created by rising interest rates between clients and law firms mean that the direction of economic development remains uncertain. It is not clear where aggregate demand will come from in the first quarter. And while costs continue to rise, they are somewhat offset by the higher rates charged by companies. This great combination makes revenue growth even more significant.
Constantly high demand for legal services from the client. 41% of clients said they plan to increase legal costs this year, and only 20% expect legal costs to decrease. Clients also require legal advice with in-depth knowledge of the industry and sector, and believe that advice in a commercial context is more valuable than the same advice given in a vacuum.
Of course, the marketing and business development teams play an important role in turning these expectations into real profits. But much of its marketing and business development has been disrupted by the pandemic. The temporary loss of personal marketing channels such as events has forced many marketing and business development teams to experiment with new digital communication channels and can now better measure their effectiveness.
On average, law firms allocate 1% to 2% of revenue for marketing and business development budgets. CMOs are right to ask if this is appropriate. With these budgets comes the nudge to be creative and of course get more done with less , even as live events, which are usually very expensive, are back in the marketing mix.
balance in the short and long run
To fulfill this mandate, CMOs must narrow their focus to initiatives that best align with their organization's strategic goals. Of course, these goals should reflect the client's priorities; What work do clients need, what advice do they want, and what areas are they active in initially?
A company's strategic goals should be influenced by market perceptions. A data-driven, or even data-driven, approach helps reduce internal debate. Reliable and reliable data coming directly from customers helps teams stay focused and move forward. Just as importantly, it prevents them from using resources for initiatives that may not have much impact.
Meeting clients' legal needs requires a two-tiered approach. First, it addresses the pressing needs of the clients to whom our data is most important in the regulatory, legal, labor and litigation sectors.
As companies deal with urgent customer requests, they must also lay the groundwork to support future customer needs. So companies already have the right legal team with the right relationship if customers are willing to deal with things like data protection. Currently, customers' long-term needs appear to include regulatory risks, privacy, cybersecurity, and environmental, social, and governance (ESG) issues.
Balancing short- and long-term customer priorities requires its own balancing act on the part of senior executives, who are often well aware that they cannot do everything at once. However, no matter how urgent or difficult your short-term needs may be, it is crucial that you take the time to review your customers' long-term priorities.
Growing Profile Marketing & Marketing Business Development
Other members of senior management seem to be in a better position than ever to assist the CMO in this balancing act. Marketing and business development leaders report that senior management is collaborating better than ever, making it easier for management to support other functions, including marketing and business development.
In addition, marketing directors say law firm leaders now have a better understanding of the value of marketing and business development. For example, CMOs spend less time convincing lawyers of the value of a brand strategy or defining the importance of marketing to law firms.
CMOs are also beginning to struggle with their data strategy, or lack thereof. They understand the importance of customer data, especially customer feedback, customer insights and the priorities their customers have in sight. Marketing managers also believe that their company's datasets can contain valuable information. But they also realize that their organizations may lack the expertise to obtain such information. You can clearly see that there is a lack of data analysis skills. And not having the opportunity to find the main idea, they are afraid of getting lost in the data without effective measures - a terrible paralysis of analytics .
Marketing managers, like their clients, must do two things at once: grow their existing business and transform their efforts to win new business indefinitely. But growth and transformation require different skills. Growth often requires building on existing efforts to achieve more—faster, bigger, and bigger. Transformation is another thing entirely that requires reflection and repetition.
Law firms' marketing directors seem well equipped to do both, and more importantly, corporate executives understand the urgency of supporting them in this important task.
The opinions expressed are those of the author. It does not reflect the views of Reuters News Agency, which is committed to honesty, independence and impartiality in accordance with the principles of trust. The Thomson Reuters Institute is owned by the Thomson Reuters Company and operates independently of Reuters News.
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