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Readers of the discussions in Legal Week in March on the merits of marketing and business development at law firms could be excused for believing that they had been transported back to the 1980s, as this debate has been around for 25 years. A substantial number of lawyers undoubtedly do not rate their marketing and business development (BD) departments highly, and the role and value of the service seems as low and unclear as ever. With staff turnover in this function as high as 30%-40%, one question clearly emerges: is there a role for professional marketers in the legal profession?
July 02, 2008 at 08:33 PM
7 minute read
Readers of the discussions in Legal Week in March on the merits of marketing and business development at law firms could be excused for believing that they had been transported back to the 1980s, as this debate has been around for 25 years.
A substantial number of lawyers undoubtedly do not rate their marketing and business development (BD) departments highly, and the role and value of the service seems as low and unclear as ever. With staff turnover in this function as high as 30%-40%, one question clearly emerges: is there a role for professional marketers in the legal profession?
Unfortunately, for some firms high marketing and BD turnover is still a reality. There are partnerships unable to capitalise on the changes evident elsewhere in the market. Yet some have, and have done so spectacularly well. So why is there such a great divide between those who see the value of professional marketers and those who do not or will not or who merely pay lip service to it?
According to the Chartered Institute of Marketing, marketing is the management process responsible for identifying, anticipating and satisfying customer/client requirements profitably.
In fast-moving consumer goods (FMCG) and business-to-business (B2B) organisations, the marketing department is at the heart of the organisation. Strategic marketers keep abreast of the changing business environment and maintain a close and in-depth understanding of the needs and views of their customers and targets while closely monitoring the competition. This enables them to continue to evolve the company's products to create a sustainable future for the business.
This can be less easy to achieve when the 'product' is a professional service and you are working within a partnership structure. Inevitably professionals believe that they own relationships and, consequently, knowledge of their clients' needs. However, their knowledge is often biased, based on limited samples and may be skewed through a self-interested lens. Yet a good marketer can have a broad perspective, speaks from a neutral position and thinks of the firm/brand first, product/individual later.
This is complicated further when you add the traditional partnership perspective that the only real value in a firm is a chargeable service and that the support systems necessary to keep fee earners operating are merely overheads that should be streamlined as much as possible.
With this model, partners gain insight into what clients and markets require, produce the strategy and turn to marketers purely for promotion. Firms with these outdated views typically employ mostly junior marketers skilled at producing brochures, running events, or undertaking public relations (PR) and sponsorship.
But what these firms lack is strategic marketing insight. Not because their marketers are not capable of providing it, but rather because a firm with this culture is unable to accept that non-legal professionals can have significant value to add to their firm's strategy, direction and overall approach to market. They therefore either do not hire the right calibre of marketer, or do so, but are unable to retain them.
How does it work in organisations that embrace marketing? Likely to be forward-thinking firms, these organisations recognise the changing environment in which they operate and seek to develop mid- and long-term strategies for the business that go beyond a pure profit and loss (P&L) aspiration of adding 10% or 20% to the top line.
They understand that their clients' needs are changing because their businesses are also changing; that the way professional services buying decisions are made has radically altered with the rise of procurement teams and the influence of non-executive boards; that creating sustainable competitive advantage cannot be achieved by mergers and acquisitions alone and that excellent client service and strong people-focused tactics are key to being a 21st-century organisation.
Used properly, marketing and BD teams will help challenge and shape a firm's vision and strategy, develop propositions attractive to the market, differentiate from the competition and shape a pipeline of strong opportunities. They will also develop tools and systems to help the firm look after key clients and resign from those that are no longer profitable, or no longer fit the strategy.
So, has the market changed or not? The answer is: it has become polarised. Some firms have not changed at all whereas some (notably many mid-tier firms hungry for growth) have made brave strides to embrace non-legal professionals' skills.
The enlightened firms hire different types of marketers from the earlier generation. As they seek strategic advice they often employ marketers with MBAs and other commercial qualifications. There has been a major trend to seek marketers directly from industry, although this is often unsuccessful as the cultural transition that comes with a vast reduction in recognition, status and influence proves too great for many.
Whose fault is it, then, that professional services marketing has the reputation it does? In an organisation trapped in the '80s it is almost an unbreakable vicious circle. The partners do not value anything they get out of marketing and the marketers spend their time producing parties and brochures and keeping their heads down to avoid confrontation.
Happily, there are fewer of these firms around. For ambitious firms that have sent their leadership team to business schools, marketing counsel is vital. These are the organisations that create boards that include senior non-legal professionals, usually marketing, HR and IT. In giving up an element of power and control, they gain insight and ideas and unlock opportunities that set them apart from their competitors.
How can firms increase the value they gain from their marketing resource and at the same time slow down the turnover levels of these staff? Use them. Use them as a sounding board when you are building your business plans. Use them to help select and create the best strategies to combat mergers in the market or changing economic conditions.
In the current climate, a strategic marketer can make a huge difference to how a firm weathers a financial downturn. Partnerships are built on a framework that requires short-term profitability. This year's P&L tends to drive 90% of decisions. How can a marketer help you in making these decisions? They can ensure that rash decisions to slash spending, cut staff or otherwise reduce overheads are analysed and fully assessed. For example, when budget cuts are required, a partner will tend to target the biggest central items (thereby avoiding political discussions with service lines about their individual budgets).
Yet these are likely to include major profile building activity – PR, advertising or sponsorship – and are almost definitely the last thing that should be cut. In a downturn a firm needs to reassure its clients firmly but sensitively that it is still open for business and unaffected by the economic climate or face the double blow of economic decline with a drop in standing relative to its competitors – a difficult position to come back from.
Which firms will we see emerging from the current downturn as leading players for the next decade? Perhaps those that have been lucky making some good buying decisions; undoubtedly those that have diversified their markets and therefore are less exposed to one geography or industry. But, critically, those firms that embrace the need to change, the changes demanded by Generation X and Y in cultural terms and the critical need to understand clients' changing attitudes and use skilled marketers to shape strategies that deliver superior competitive advantage.
Suzy Goodwin is the chair of Professional Services Marketing Group (PSMG) and national director of marketing and business development at Grant Thornton.
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