You’re probably already aware of the inaugural ALPMA and Julian Midwinter & Associates research, Taking the Pulse
, that seeks to benchmark business development and marketing in Australasian law firms.
A key goal of the study is exploring the sophistication of business development and marketing in contemporary Australasian law firms.
Law firm business development and marketing: truly sophisticated, or just mature?
By “sophisticated”, we mean a planned, measured and truly integrated business development and marketing function that supports and complements a firm’s growth strategy. Or put another way: successful.
Firms that adopt this approach thrive through an integrated business development and marketing approach at macro and micro levels. True sophistication (and success) is reached when your business development strategy, plans and activities link directly to your marketing strategy, plans and activities at the individual lawyer, client and firm levels to deliver on firm goals.
But, we’ve been doing it for years
Many firms we speak with consider they have a sophisticated business development and marketing function. And for sure, they’ve been “doing” marketing for years, but it has been in isolation from business development. “Mature”, rather than sophisticated might be a better way to describe these firms’ efforts.
They largely focus on un-strategic and disjointed activities at a tactical level: client entertainment, one-off promotions, events, sponsorships, directory listings, and purposeless networking.
In these firms, we typically see marketing as a centralised function run by a manager and perhaps one or two coordinators. Business development isn’t really mentioned. They do some planning, but tend to focus more on passive activities encompassing brand, website, publishing, research, brochures, events and some proposals. Sometimes these marketers’ only client contact is handing out name badges at a breakfast seminar.
Why is it so?
Historically this approach developed in response to individual partner needs (and in some cases, whims: “we need a golf day!”). Very often the success or progress of these activities is not consistently measured against lawyer, practice group or firm goals. Or if measurement exists, it’s sporadic or superficial (“25 people attended the cocktail party”. So what?).
No wonder many firms continue to struggle with growth, when marketing efforts are not clearly aligned and working hand in glove with their firm’s business development goals or wider growth strategy.
And of course, marketing can’t contribute anything meaningful when kept at a distance from, or locked out of, the “pointy end” of business development. We see and feel their frustration time and again. In many firms, the business development or “sales” aspect has traditionally been handled by partners, not marketers.
And by “business development”, we mean referral relationships, prospective client cultivation, account or “relationship” management, cross-selling, service offering development, along with scoping and pricing of matters.
No investment, no impact, no growth
A related dimension of our study is establishing what percentage of revenue firms spend on business development and marketing.
Our experience has been that, whilst the need for business development and marketing is now widely acknowledged, it is regularly treated as a “grudge” spend and thus languishes through chronic under-investment.
indicates that thriving business-to-business professional services firms, typically spend between 5% and 6% of revenue on business development and marketing. And for business-to-consumer firms, the business development and marketing spend as a percentage of revenue sits between 11% and 13 %.
Another research study
found that greater business development and marketing investment correlated with greater firm growth.
It is certainly food for thought.
And to be clear we are by no means saying it’s all about spending up big. It’s what a firm does with its investment of time and money that makes the biggest difference. Low-cost can still be clever and effective, or sophisticated.
What have we discovered so far?
At the time of writing, our preliminary results reveal nearly half of the respondents have self-rated their firm’s overall business development and marketing as “under-developed”.
Within that group around 30% of firms either expect no revenue growth in the next 12 months, or expect revenue to decline.
By comparison, all respondents who rated their firm as sophisticated are anticipating strong revenue growth.
So, do you know how your firm is faring compared with others?
If you haven’t done so already, please take 15 minutes now to participate in the online survey
and benchmark your firm against others when the findings are released in early November.
About our Guest Blogger
Before making the move to consulting, Amy worked in-house for two Australian law firms in rewarding but sometimes frustrating marketing and business development roles.
JMA has helped Australian and New Zealand lawyers attract, win, grow and retain desirable clients for 20 years through winning tenders and proposals, upskilling and coaching, and implementing achievable strategy.