Most Australasian law firms are struggling to develop an effective business development (BD) and marketing program - despite recognising that this is pivotal to achieving their firm’s growth ambitions, according to new research by the Australasian Legal Practice Management Association (ALPMA) and Julian Midwinter & Associates.
“The results paint a stark picture of the current state of marketing and business development within Australasian law firms,” Mr Andrew Barnes, ALPMA President and CFO at the Lantern Legal Group said.
151 respondents from 149 firms across Australia and New Zealand completed the inaugural “ALPMA/JMA Taking the Pulse of Business Development and Marketing In Australasian Law Firms” research, conducted online in September, 2014.
“There is a real disconnect between anticipated revenue growth and how firms intend to achieve this growth,” Ms Amy Burton-Bradley, Partner, Julian Midwinter & Associates said.
The majority of firms (65 percent) are forecasting revenue growth this financial year – with 27 percent expecting revenue to grow more than five percent in the current financial period. Mid-size firms were the most optimistic about growth, with 71 percent expecting revenue to increase. Large firms expected the greatest revenue increase, with 44 percent of respondents anticipating greater than 5 percent revenue growth.
“Yet, reviewing the research results, it’s hard to see how many of these firms will actually hit those revenue targets with the lack of planning and limited resources they have in place,” she said.
Only 38 percent of respondents thought their firm appropriately resourced the marketing and business development function, although 55 percent of firms have a dedicated marketing and BD person or team. Despite this, the vast majority of firms (80 percent) say that hiring additional marketing or business development staff was their firm’s least important approach to achieving growth.
In terms of achieving their growth strategy, 95% of firms claimed that the effectiveness of their individual lawyers’ marketing and business development activities was important.
“Yet more than half of firms (56 percent) do not invest in business development and marketing skills training for lawyers, and nearly half of all firms (48 percent) do not have an overarching firm-wide marketing and business development plan in place,” she said.
“In many cases, the firm is its own worst enemy when it comes to effective business development and marketing,” Mr Barnes said. “Respondents flagged a broad range of internal barriers - from limited buy-in and support from partners and lawyers, to time and resourcing constraints and the lack of an agreed, firm-wide strategic focus. Poor market differentiation is also seen to be preventing firms from enjoying success in this area,” he said.
“The fact that most barriers to improved effectiveness are internal (rather than external) is actually good news,” Mr Barnes said.
"It means that the power to change is lies directly within the control of most law firms - provided they choose to make this a strategic priority for the firm and invest the required resources accordingly,” he said.
“Given the inconsistent application of BD and marketing disciplines across the profession at present, firms that bite the bullet and adopt a focused and consistent approach can gain a competitive advantage. If their business development and marketing program is strongly aligned with an overarching business strategy, and – this is key – is supported and resourced by the equity group then there can only be upside,” Mr Barnes said.
Ms Burton-Bradley agrees that firms who take the research results as an opportunity to step back to assess where they are, and where they want to be and reinvigorate their approach to market accordingly, will really stand out.
“Most firms plan to continue with business as usual, focusing efforts on existing clients and sticking with safer, more traditional approaches to market - the firm website, networking, association memberships, referral relationships, client entertainment, seminars and sponsorships,” she said.
“Very few firms have been or even plan to spend significant time or money on digital lead generation, thought leadership, or leveraging blogs and social media despite increasing recognition of the value of these activities adopted successfully by many other sectors as part of an effective BD toolkit,” she said.
“I encourage firms to read the free research report, and use the information to assess their overall marketing and business development program and commit to generate internal momentum to improve their effectiveness,” ALPMA President, Mr Andrew Barnes said.
ALPMA and Julian Midwinter and Associates will present the results and discuss strategies for improving marketing and business development effectiveness at our Taking the Pulse webinar on Tuesday 11 November at 1.00pm AEDT. Registration is free for ALPMA members and research participants, and $99 for eligible non-members.
“Taking the Pulse” is the first in depth Australasian research study of its kind, the full research report “Taking the Pulse of Business Development and Marketing at Australasian Law Firms in 2014” is available for free from http://www.alpma.com.au/Research/marketing-business-development-benchmarking from Thursday 30 October, 2014.
The research report reveals the answers to key questions, including:
The report presents results from a detailed online survey, distributed to ALPMA members and subscribers, and to Julian Midwinter & Associates eTips subscribers throughout Australasia. Data was collected via an online survey over a 23-day period. 151 people completed the survey, representing 149 individual firms. Respondents were generally in a senior management or specialist management role at their firm. Results in the report are also broken down by firm size.