You are late, if you haven’t already budgeted for marketing and business development for 2008. Most large law firms start their budgeting process in early fall for the following calendar year. 

Of course, there are firms that still do not prepare a formal marketing budget at all, so anything I say here would be a waste of time for those firms. Unfortunately, for some firms, budgeting is still done on the “Gee, can I take my client to lunch today on the firm?” basis. Planning ahead, ain’t part of the program.

For the others, (those not opposed to budgeting, but possibly have been procrastinating) there is some guidance from Michelle Golden of Golden Practices that may prove helpful in deciding as the new year approaches as to “What’s in a (your) Plan?”

I not only like her simple spreadsheet, I particularly like her focus and the priority order in which she lists her budget categories (with my usual editorial comments):

  • Existing Clients – (clearly, this is the most critical area in which to budget dollars. As Michelle points out, this is the most important area to focus, but “usually, little is allocated in this area”);
  • Influential People/Referral Sources – (likewise, very important, since the vast majority of new work comes from clients and referrals);
  • New Business – (more long-term, so put less business development money in this category);
  • Marketing Infrastructure –  (the “bottomless pit” indeed, and should only be financed to the extent it supports the categories above); and
  • Research & Development – (in the sense that a firm needs to constantly assess its position in the market and that of its competitors – to be honest, I don’t see this as a high priority for many firms, so don’t get hung up here).

Take a look and see if there isn’t some helpful stuff for your budgeting process.

Thanks to Dan Hull for the lead to Michelle’s post.

With 2008 less than 30 days away, it isn’t too early (in fact, it’s later than you think) to focus on your law practice, and the business development strategies you want to bring into play in the coming year.

Questions to ask yourself:

  • Am I in the right practice area for me?
  • Am I in a “hot” or “cold” area of the law?
  • What should I do to ensure I am right on both fronts – at least with my legal marketing focus for 2008?

Here’s something that may help you. My friend Bob Denney of Robert Denney Associates has issued his 19th Annual Report on “What’s Hot and What’s Not in the Legal Profession”  this month. It makes sense to take a look and do some serious reflection on your practice, as well as where you want to take it.

Items from various categories that popped out from Bob’s report:

Hot Practices:

  • Intellectual Property – USPTO has adopted new rules (enough said on that point, as in new regs, new work for lawyers)
  • Immigration – firms separating it from Labor & Employment
  • Corporate Investigations – “fastest growing area of White Collar Crime”
  • Animal Law – cruelty to animals is a crime in 43 states

Getting Hot:

  • Foreclosures
  • Bankruptcy
  • Insurance coverage – “due to global warming”

Cold Practices:

  • Medical Malpractice
  • Workers’ Compensation

Marketing and Business Development:

  • Marketing budgets – increasing as a “percentage of firm revenues at both large and mid-size firms.” Running as high as 10% in UK; reiterating that large accounting firms in both countries “have been spending that much for years”
  • Marketing department staffs – “increasing in size along with the budgets”

Other Trends & Issues:

  • Rate Increases – “Major corporations are getting increasingly fed up with firms’ rate increases… This, along with poor service, is why many are replacing nearly two-thirds of their primary law firms” (not sure about the 2/3 figure, but I do know that The BTI Consulting Group survey of last spring, which I reported on here, reported that 54% of large corporations had shed a primary firm within the previous 18 months.)
  • Mid-size firms – “Well-managed mid-size firms – and even some small ones ‘ are not only surviving, but are thriving by attracting clients faced with the high rates – and often poor services – of the large firms”
  • Calls for killing the billable hour – (oh hum, how long have we been talking about this? Enter “billable hour” or “alternative fees” into the Search box to the right for more of my posts on the subject.)

There’s a lot of marketing and business development morsels in this report for individual lawyers in any size firm. Take a look at Bob’s four-page report; it should have some food for thought applicable to your firm, making it worth the read.

The summer is that time of year when most folks, even clients, take some time away from the grind.  So, it’s not a bad time to plan some marketing efforts to undertake, either now or when everyone gets back into the swing of things after Labor Day.

Allison Shields over at Legal Ease has a few suggestions (in addition to collecting your account receivables and firing some problem clients – a subject I’ve talked about on occasion here and here).  She offers the following marketing tips to consider during the summer (with my own twist of course):

  • Touch base with former clients to reconnect and possibly pick up some business,
  • Update clients on the status of matters, helping to ease their emotional concerns,
  • Think of something special to do for your clients to build on the relationship,
  • Touch base with referral sources for the same reason,
  • Assess your marketing activities to determine what is working and what isn’t, and
  • Oh Yeah, don’t forget to take that real vacation yourself to recharge your batteries.

As a result, you should be in great shape to undertake a fresh approach to your business development efforts come fall.

What the heck is a Mastodon, you ask? I didn’t have a clue myself until I looked it up. It’s an extinct mammal related to the elephant family.

The point relating to legal marketing? Simple. Small firms and solos have hope of seriously competing with larger law firms thanks to the Internet. That is the message conveyed by Mike Dillon, general counsel at Sun Microsystems on his blog, The Legal Thing in a post he calls “The Way of the Mastodon.”

A big thanks to Patrick Lamb at In Search of Perfect Client Service for his great post summarizing Dillon’s main points. Here’s my take:

  • Traditionally (read: in those ancient days prior to the Internet), companies in need of a specialized lawyer would turn to their regular law firm, leaving it to them to find that specialist;
  • Law firms got larger as the law became more complex, and they needed to hire more lawyers to meet those specialized needs (read: increasing costs, and requiring higher and higher hourly rates to pay for these additional “costs”);
  • Along comes the “ole” World Wide Web, and now companies can find really smart, qualified, specialized lawyers in small firms who are just as good and are much more cost effective. How do they know that they are really smart and qualified? Simple, GCs are reading their blogs;
  • Big, expensive law firms will be challenged to stay relevant or go the way of the Mastodon.

As Dillon sums it up: “My point is that the epoch of the current law firm model – which derives its profitability from growing scale and raising hourly rates – will soon be over.”

The new model will definitely increase opportunities for smaller, efficient, niche law firms.

As a follow up to my last post about “branding,” I wanted to mention a conversation that Valeria Maltoni at Conversation Agent had with Gerry Lantz, a very successful marketing, advertising and communications executive (and now consultant). In this conversation about branding, Lantz tells a couple of stories about how two expensive branding campaigns failed. 

One involved BP’s brand overhaul in its attempt to come across as more “green” by seeking “alternative energies and be(ing) environmentally friendly.” They changed their logo, colors and slogan to “(B)eyond (P)etroleum” in that effort. Then, they experienced a major oil spill and a refinery explosion causing death and injury. Both events were attributed to ignored warnings and the lack of inspections, according to Lantz. The consensus as to why the campaign failed: BP didn’t push its brand story all the way down to the operational level.”

The other involved an ad that invited the public to generate their own ads about Chevy’s 2007 Tahoe SUV. Apparently, a number of ads where extremely critical of the vehicle, and the campaign was a “bloody fiasco,” according to Lantz, and lead to Chevy pulling their ads. Some of the public ads can still be found on YouTube.com. As Lantz says: “Don’t invite a conversation if you don’t want to listen.”

Tying this back to my post on seeking feedback from clients on what “word” best describes the firm’s brand, not only should your firm be prepared to listen intently to what the clients’ have to say, but make sure that all the attorneys and staff at the “operational level" are aware and buy-in to the firm’s intended brand.

If your clients were to describe you (your brand) in one word, what would it be? Well, ask them. That is what John Jantsch recommends in his current e-newsletter (free subscription available here). And he suggests a simple question:

“What’s the ONE word you would use that best describes what we do well?”

Could the word be: results, caring, fast, responsive, smart, effective, good communications (okay, okay, that’s two, but you get the idea), or might it be dependable, expensive, inexpensive, fair, quality, etc.? Then ask your clients to expand on what they mean by the “word.” 

After you have done this exercise with at least your top clients, consolidate the messages as much as possible to the point of reaching the most common elements among the information gathered. This pretty much will describe your brand (or unfortunately brands, if disparate groups within the firm are sending different messages).

Finally, ensure that every person in the firm (staff and lawyers) understands the “brand” you wish to project beyond the mahogany walls, and encourage them to live and breathe it to all those they encounter every day.

So, what word describes your firm?

In response to my question as to what its legal marketing strategy was, the managing partner of a 400-lawyer firm said “to grow to 1500 lawyers in five years.” He explained that he wanted to expand to both coasts, the Midwest, as well as internationally. Conceding that this may be an interesting goal, it wasn’t particularly strategic, since there was no plan in place to implement such a vision. Five years later, the firm had grown by approximately 50 lawyers.

Considering that most geographic areas are all well-served by existing law firms of all sizes, one has to ask the critical question when it comes to thoughts of expanding the firm: WHY?

Often the answer is that if we were bigger, we’d do better. Wrong. Growth for growth’s sake, in order to reach nirvana, just doesn’t work.

That isn’t to say that there aren’t legitimate reasons to grow a firm. Three good reasons for expansion include:

  • Meeting existing clients’ needs in current marketplace or elsewhere,
  • Shoring up gaps in the firm’s practice areas to meet current or anticipated needs, and
  • Present marketplace is stagnant or dying, and firm needs to move into growing areas.

So, whether it’s adding individual lawyers, or expanding the firm’s geographical reach (by opening an office or merging with a firm elsewhere), make sure that the reasons for doing so are strategically thought through. Many firms have done so only to close the office or shed lawyers later.

For some very good reasons why some small firms choose to stay small, take a look at the article by Stephanie Lovett that appeared in The Legal Intelligencer and on Law.com’s Small Firm Business

By that I mean, don’t have one or even two clients account for too high a percentage of your or your firm’s revenues. It could potentially set you up for disaster. A sound law firm marketing principle involves broadening and deepening your client base in order to minimize the potential of one or two clients bringing the firm down, if they choose to leave. Their departure could be based on any number of reasons, ranging from dissatisfaction to merging with a larger company, whose existing law firm would likely end up doing all the legal work.

LeBeouf Lamb Greene & MacRae, an international firm of 700 lawyers and 18 offices worldwide, may well have wished they heeded that advice, at least for their Pittsburgh office, which closed February 1st, according to a story that appeared in Small Firm Business and The Legal Intelligencer. The demise of the firm’s Pittsburgh office was due apparently to a too big a reliance on one client, Alcoa, Inc.

In response to the question of what percentage of a firm’s revenue from a single client should start raising serious questions within the firm, “the most common answer was 10 to 15 percent” among legal industry experts and lawyers themselves, according to the story. I tell clients they should shoot for 5%.

Obviously, the event for a firm the size of LeBeouf Lamb is not devastating. But, how about your firm? If you have a client or two or three that account for a percentage of revenue you are not comfortable with, then you really need to give serious thought to expanding your legal marketing and business development efforts to ensure you have a broader client base.

The more you distinguish yourself or your firm from others, the more effective your law firm marketing efforts will become. Too many firms still sell themselves as generalists, especially smaller firms, or at least capable of handling a wide range of legal matters. Unfortunately, that only continues the problem potential clients have in differentiating one firm from another.

Niche marketing is not a new topic for this blog (as you can see from earlier posts listed below). What got me thinking about the topic again is an article I read by Paramjit Mahli of Sun Communications Group entitled “Know Your Niche” that appeared in the New Jersey Law Journal this month.

Not only does she identify reasons to narrow your niche so you stand out in a particular field or practice, but Paramjit points out that your legal marketing dollars will be better spent. The more you know about the potential clients in a niche market, the better you can direct your lawyers’ business development activities. There just isn’t the time or dollars available to accomplish this in the broad marketplace for an individual lawyer or small firm.

See earlier posts on the topic:

"More on Niche Marketing "

"For Effective Legal Marketing – Focus, Focus, Focus"

"Do You Have a Niche, and What Are You Doing About It?"

As the New Year approaches, it’s time to give some more thought to the legal marketing benefits of practice groups. But, I am not talking about forming groups based on areas of law that we learned in law school. Rather, your practice groups should be client-focused; i.e., structured in terms of the needs of specific clients and their industry. As I mentioned in a post I did nearly two years ago, your practice groups should be organized based on the needs of specific client types, for example:

“Your practice groups should be multi-disciplinary in nature. For example, in the health care area, a group should consist of lawyers with expertise in administrative law, employment, environmental, business entities, contracts, real estate, tax, estate planning, litigation, and so forth. In other words, structure your practice groups to meet the needs of a client segment whatever your firm’s size.”

Joel Rose, a law firm management consultant, spoke recently on practice groups at a gathering of marketers at a Philadelphia Bar Association-sponsored meeting. His remarks were reported by Barbara S. Kaplan in an article on Law.com. I totally agree with the comment:

“In the majority of financially and professionally successful law firms, practice or industry groups are inherent to client development Rose said.” (emphasis mine)

For Joel’s “(c)ommon identifiable elements of those firms” see Barbara’s article.