Law firms that emulate the marketing discipline of their corporate clients will be the ones who thrive in a post-pandemic world
The Economist recently ran a cover story on commercial law firms entitled Bumper profits for big law. While the pandemic has lowered costs and transactional work is booming, The Economist says that the record results have also been driven by big law firms adopting a more corporate set-up to look like their clients. This includes establishing R&D teams, moving back-office functions offshore, and opening offices with the intention of cracking new markets.
As a further example of “corporatisation”, the story highlights the decision in December by Cravath, Swaine & Moore and Linklaters to abandon their lockstep pay systems based on seniority in favour of more merit-based schemes.
However, these remuneration changes were provoked more by the fierce competition for talent in the legal profession rather than some grander design to start following the more traditional payment paths of rewarding executives based on their contribution to success.
In fact, much of the culture of law firms has not changed quickly or far enough to match corporate clients or even their competitors in the big four. Marketing and business development would certainly benefit from the more disciplined and consistent approach of industry using client feedback to drive marketing objectives and employing data to assist with evaluation of performance.
The pandemic saw a sharp drop in the costs of marketing and business development as firms were forced to keep staff at home, and this helped generate better returns. With travel and in-person events off the agenda, firms’ marketing and BD spending dropped by 70 percent in 2020 compared to pre-pandemic levels (Source: Thomson Reuters Peer Monitor). Taking The Economist’s example of the US$3 billion revenues of Dentons, if we estimate Dentons’ marketing and BD spend at 2.5% of this then its budget would be US$7.5 million with a drop in spending of US$5.25 million.
And with the rise of alternatives to travelling to conferences and meetings – such as virtual events, video calls and digital marketing – law firms have a big opportunity to contain overheads while delivering strong results.
As we emerge from the health crisis into an increasingly competitive market for legal services, it will be those firms that grasp the nettle by emulating the marketing discipline of their corporate clients who will thrive.
Cultural curbs
One big cultural factor preventing this though is the tension between individual partner requests and the broader strategy of the team or firm. Conversations with law firms over the last few months have taught us that even with the changes forced by the pandemic, marketing executives still struggle to get their ROI arguments across when it comes to certain areas of law firm marketing.
One example is directories. The directory and awards season is well and truly underway (in fact it is constant). In the next five weeks, IFLR1000 will look to close its annual global survey, Chambers has deadlines on 49 European research areas, ALB has its awards for India and China as does law.com for the Middle East, and Legal 500 has its LatAm deadline. Rather than a mad dash to do everything crossing your desk in order to meet individuals’ demands, it should be a time of reflection for the team as a whole. Which submissions align with the business goals for the department? Which directories are driving leads and conversations? And what do clients, who you freely add as referees, think of particular directories?
One firm doing over 300 submissions pleaded with us to help them show some partners that it really is not worth applying to every possible awards and directory covering their area. But with directories, the ego has well and truly landed. Trying to get a partner to agree to stop submitting in an area because the directory is not referenced by clients, or is not popular with or known to clients, is akin to making yourself enemy number 1 within the department. And at an estimated opportunity cost of US$2,550 to prepare a submission (Source: LMA/LFMP/BTI report The ROI of Law Firm Submissions) this is not something to be taken lightly in terms of the discipline which firms should be applying.
We will look at the arguments for submitting to directories in another article—and there are some novel ones including the fact that some of our clients this year have been asked to provide evidence of rankings in order to be qualified for an RFP by a government banking agency. But even accepting arguments about the role that directories do and can play, not all directories are created equal.
You need to use data to qualify and measure their impact. We work with firms on upgrading their analytics tools to a very granular level, but even with basic free tools like Google Analytics you can see the traffic driven by a directory website to your own media. You can also monitor referrals from any paid-for listings and your partner publisher should be presenting you with detailed statistics relating to your listing. Talk to clients (when you ask them to become referees) for their views of directories plus ascertain how influential directories are in getting your firm onto RFP lists during feedback requests (and store such data on your CRM).
Taking into account the time costs involved in drafting a submission, feedback from clients and data on traffic to your website, you have a case to persuade partners to be more selective. This is especially so if you offer them alternatives such as virtual events, which can be held cost effectively on a private or public basis and which provide actual engagement with a client or prospect. Or you can get testimonials direct from clients or even cooperate on case studies instead of putting clients at the beck and call of researchers. Why firms shy away from this in favour of anonymous platitudes from a directory is another element you will not find in the corporate or banking world. Corporates and banks promote themselves based on previous deals and what clients said about them, as they systematically collect feedback because they understand the power of their track record.
And the argument that bar rules do not allow it does not wash as they also do not allow you to quote from directories (it still counts as promotion), yet firms still do it. It is about culture rather than constraint, which admittedly is difficult to overcome. But you don't need to name clients and you can at least display more informed and real-time comments on your work and show clients that their feedback matters. And if you can name clients, then case studies are a powerful demonstration of your impact. Addleshaw Goddard have some good examples.
Data is the best way to deter Vanity Marketing—those activities that a strong personality might impose without any link to strategic goals and it also the best way to demonstrate the benefits of VIP Marketing (see table).
VIP Marketing begins with a focus on important people– clients or prospects– rather than the whims of a particular individual. Your tactics will always tie back to a defined target group or groups and will drive how, when and where you deliver your message. Data will help you assess which tactics from the VIP list are working best for which target groups and how and when to scale.
VANITY Marketing VIP Marketing
All About Me All About The Client
- Directories Client listening programmes
- Sporting event sponsorship Virtual and in-person events
- Fast car stories Client-focused content
- Webinars on what interests me Webinars on client topics
A box at a high-profile sporting event may seem like good client entertainment but putting aside whether it improves client relationships to the point of increasing work (this would need measuring though Vanity tactics often don’t get measured), what does it actually say about your brand? US Bank BNY Mellon chose to sponsor a sporting event, the Oxford-Cambridge Boat Race, but then offered their branding and benefits to Cancer Research. Engaging in expensive sports sponsorships runs the risk of demotivating those not invited to the party from your firm, while demonstrating to clients that although you can offer them a good party, maybe you could have invested the money in benefits that help their business … or society as a whole, as BNY Mellon did.
Fast car stories is our rubric for when you ask a lawyer to contribute for the team newsletter or magazine on a subject which does not focus on law. It is good to choose something you are interested in but not if it does not resonate with clients. And whether or not it is a business or legal topic, clients want content with opinions: no one will sue you for commenting on the impact of Covid-19 and your view on how one might apply the doctrine of frustration or force majeure. In fact, it will get you noticed and attract business. The latest LinkedIn/Edelman report on thought leadership emphasised that the pandemic unleased a flurry of content from suppliers but C-suites and buyers want opinions on how it affects them or else it actually detracts from your brand and service offering. While doing nothing is not an option, producing content without tying it into client needs can also be harmful.
Webinars also need to be VIP not Vanity exercises and as with blogs, these proliferated with varying quality during the pandemic. The best ones we saw had client-centric topics reflected by the varying make-up of the panel discussing the issues. It is clear the firm had built an agenda and speakers which reflected client pain points.
The worst one put up four financial services partners reading from prepared sheets on a monotonous Teams presentation that felt like you had landed in Room 101. Where was the voice of industry or a trade association with new research or the opinion and views of a client? Why not have a moderator throwing in questions that you know clients have raised? It is easy with a little effort to bring in different voices other than your own.
There is a time and a place for some Vanity Marketing tactics but they are not an excuse for not gathering data and measuring effectiveness. And the latter will show you how much emphasis you should put on them in your marketing mix.
The pandemic helped put the brakes on unstructured marketing and now is a good time to review how the firm sets and delivers on its marketing objectives and to make wise investments with the savings made during the Covid crisis.
There is no “I” in team but there is one right in the middle of “client”. Reining in individuals by appointing a CMO to the firm’s executive board to implement a board-approved strategy should be the next “corporate” move by law firms. In smaller firms, the managing partner should be delegating the marketing function to an experienced professional/team so that the different practices have a clear strategy tailored to their particular needs.
Big law has to move beyond herding cats to a governance model which respects the skills of different leaders in IT, Marketing, Business Development, HR, Diversity, Finance and Innovation and then law firms would really begin to look like their clients.
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