I’m not referring to keeping up with the Jones’ or with large firms for that matter. What I am referring to is whether your firm is keeping up with the needs of your marketplace in terms of marketing and business development. Times change and competition is increasing. Both should be taken into consideration when calculating what your budget should be for generating new business.
Thanks to Mark Beese for his recent post on his Leadership for Lawyers blog, that brought to my attention The BTI Consulting Group’s annual benchmark survey on marketing and business development strategies. The significance of Mark’s post, and obviously the survey, is the information relative to the “dramatic boosts” in AmLaw’s “Second Hundred” law firms’ budgets. They are “catching up” (percentage wise) with what the First Hundred are spending. Hmm, competition does have a price.
Important aspects of budgeting that the survey uncovered include:
- 52.5% of marketing budgets was spent on salaries and business development (sales, face-to-face meetings, personal encounters, whatever you want to call it);
- 30% of that goes to client relationship development (which I presume includes client feedback programs, increasing and improving client communications, etc.);
- Budgets are consuming 2.1% to 2.6% of gross revenues; and
- Mid-sized firms’ budgets are on the rise.
Moreover, the question is not only whether your firm is spending enough dollars on marketing and business development to keep up, but whether it is spending it on the right things?