Guest: Adam Stock, Vice President of Product Strategy at Foundation Software Group
Episode 63: Data-Driven Marketing Strategies to Gain a Competitive Advantage
Sharon: Welcome to the Law Firm Marketing Catalyst podcast. Today, my guest is Adam Stock, who recently joined Foundation Software Group, which transforms disparate data about clients’ matters, people and parties into usable and actionable information. Many of you know Adam as a pioneer and evangelist in marketing technology for law firms. Today, he’ll give us his perspective on the essentials of marketing technology in a law firm. Adam, welcome to the program.
Adam: Thank you very much for having me.
Sharon: So glad to have you. Adam, tell us about your career path. You started in computer science, right?
Adam: Correct, I started in computer science. I worked for several software companies, and I was one of those people who worked really well with the business development people and the marketing people. When you develop software, one of the things you do is develop stuff, but you also have to license in many pieces because software’s very complicated. I actually ended up working extensively with the lawyers at my different software companies, and we did a lot of negotiation. We worked with a lot of law firms and licensed in a lot of technology. We licensed out a lot of technology, too, so I was a buyer and seller. I was a big user of—and when I was at smaller companies, I was the primary buyer and seller of legal services, so I hired law firms. What happened was when there was the big downturn, software companies were laying off people, and around that time, law firms were actually hiring businesspeople. I was very fortunate to be hired by Silva Coulter, who wanted to start a business development group at a law firm. It was a very new thing back in 2005. I was one of the early directors of sales at a law firm, and the advantage I had was that I actually had been a customer. I understood the bad, but also the really good aspects of law firms, and it was really fun to be on the other side of the table in buying and selling legal services.
Sharon: What a great combination, in terms of the technology and buying and selling legal services and understanding everything. That’s so unusual and such an advantage. Now you’ve joined Foundation Software Group. Can you tell us about them?
Adam: Once I entered law firms, I realized that there weren’t a lot of tools inside law firms for tracking your clients, tracking all the different things in marketing and business development. I think a lot of people in legal knew me as the techy CMO for a lot of years. I established the Legal Marketing Technology Conference and a lot of my passion was not only doing it, but also teaching others how to take advantage of the things that are in law firms. This is a culmination of that.
I did that for many years, both at Dorsey & Whitney and at Allen Matkins, and I built a lot of good internal systems. But when you’re at a law firm, you’re really not—for a start, there aren’t many people that can build software, but even so, software’s a hard thing to build. What you really need are partners that can help you with that. I worked with a lot of very good software companies. I eventually moved on to the Innovation and Chief Information Officer role and did that for a while at Allen Matkins. The culmination of that is—there is a handful of really fantastic companies that provide great solutions for knowledge management people, for business development people, for CIOs and for technology groups in law firms to help them harness their information. One of those companies is Foundation Software and I’m really happy to be part of the team. Our goal is to provide great tools that make it easier for people in law firms to tame and harness the information that they’ve got inside of their walls.
Sharon: It sounds great. I know at the Tech West Conference, one of the things people were saying was, “Gosh, we need someone who can tie this all together.” It sounds like that’s what Foundation is doing.
Adam: Yeah, and we have an interesting opportunity now. I think what we’ve seen over the last six to eight years is, if you look inside of law firms, outside of IT, the most sophisticated group about technology is usually the marketing and business development group, probably followed by the knowledge management group. A lot of that just has to do with the fact that marketing got very technical. Eight, ten years ago, marketing became very technological. That’s why we started the Legal Marketing Technology Conference.
I think what we’ve seen over the years is that organizations have become sophisticated. I would say most marketing groups in large law firms have a marketing technologist, and I think what you’re seeing now is just a further evolution of that. Marketing and business development people in the past were only tracking the things that they sent out, the active marketing that they did and the business development that they did. Now, more and more, they’re able to track and harness the data that are in other systems in law firms. There’s lots of useful information in the time and billing system. There’s great information in Outlook address books. Understanding who the attorneys are meeting with will tell you a lot about who you should be targeting. That’s what you’re starting to see in law firms. You’re starting to see a much more holistic view of the data. You’re seeing silos being broken down.
You and I were just at the Legal Marketing Technology Conference, and one of the most interesting sessions I was at had three different panelists. They were all using data software, and one of the people who was talking was a legal project management person. He was helping the legal practices with the way they execute stuff for clients. There was another person who was from the KM group. He was helping with different knowledge management requests. Then there was a business development and marketing person. The point is that for the first time—and I think it’s very exciting—you’re starting to pull all of this information together, and it allows you to get lots of great insights. The panelists were talking about the fact that certain of their clients really wanted to know, as an example, how they were doing in their diversity. Since they were pulling in data from the HR system and from the time and billing system, they could actually create reports for the clients for the first time and say, “This is what we’re doing. Here’s who is assigned to this, and here is how they’re billing against your matters.” That was pretty exciting.
Sharon: When we hear about data-driven marketing, is that what you mean, pulling data from other systems within the firm? Is data-driven marketing different than the marketing of 10 or 20 years ago, and how is it different, if it is different?
Adam: I don’t think data-driven marketing is that different, in the sense that when you’re doing marketing, whether you’re doing direct mail pieces or sending emails, you really need to look at your list; you need to see who opens; you need to see who responds; you need to take action based on those things. I don’t think those aspects have changed at all.
I think what’s really changed is that—the reality is that marketing in large firms is often dealing with 10 to 20 percent of the business. I’ve been around law firms now for 18 years and when you look at the numbers, the vast majority of business that laws firms get is repeat business from existing customers. Usually, the marketing and business development group is holed in for new pitches. I would say the exceptions to that are if the business development team is running key client teams. In the case of key client teams, you’re looking at existing clients, but you don’t really have a good view into what’s happening inside the matters that they’re executing. As a typical example, what will happen a lot is a client will be working with an attorney, and they’ll say, “Hey, we’ve got another matter that just came up,” and they’ll open up that matter, but often that is invisible to the marketing and business development group unless you have a key client team.
What’s different now is that we have insight into these other systems. The business development and marketing group can say, “Oh, look, we just opened a new matter with this big client. What do we know about that new matter? Is it in a new area? Is it in a new topic? Is there something that we should be proactively doing to help with this new area that may come from a client?” Again, in the past, that was all invisible, because the attorney did not ask the marketing or business development department for a new pitch or for any new information. Now, you have insight into that, so there’s a lot more transparency inside of law firms. Does that make sense?
Sharon: Yes, I think it does. Really though, the marketing is essentially the same. I suppose data-driven marketing can mean a lot of different things. It can mean, as you’re saying, pulling in information from different systems, as opposed to just saying, “O.K., we’ve sent out a hundred pieces of mail. How many were opened?” and that sort of thing. There are so many ways to capture information today.
Adam: I think a big opportunity is here. We saw this all the time with our big clients, and I’ll use East West Bank as a hypothetical. Let’s say your client is East West Bank. If they’re a big client of yours, if you were to look in your CRM system, you might see that there are 500 contacts there. Then, if you have something like an ERM system, like a contact matter relationship or something like that, of those 500 contacts, you might be able to narrow it down to 50 who are probably the most important, because you see there’s a lot of traffic going back and forth between those individuals and people in your law firm. What’s interesting is if I were to send out emails to those 500 people, certain that those people are really important, if they click on it—or better yet, if you knew that they were the 10 or 20 influencers that really drove business, those are your most important ones. So of the 500, a lot of them, if they click on an email and you show it to the attorneys, they’d say, “I don’t even know who that person is. They somehow are in your database.” You do it with the 50 and show that to the lawyer and they say, “Oh, that’s pretty interesting. I speak to that person—I email that person once a week.” If you know the five or 10 people who really send you business and you knew they clicked on that email, you would want to take immediate action on that. You’d say, “Hey, this person who has never been interested in our labor and employment alert clicked on it. Should we be doing something?”
I think what you have now with this transparency is a view into your large clients that you never had before. Before, from the marketing and business development group point of view, it was just East West Bank, and you didn’t know which of the 500 were important. With the merging of all the systems and being able to see the traffic that goes back and forth between your law firm and that bank, you’re able to figure out who the important people are, and you’re even able to go to the people who interact with them and say, “Hey, this person that you email all the time is really interested in this new labor and employment matter that we just sent an alert out on.” You can be a lot more relevant now than you ever were as a marketer inside of a large law firm.
Sharon: It’s a lot more satisfying for marketers, too. You’ve referenced large law firms several times, and I know you have a lot of experience with those. I want to make sure that the firms listening to this or legal marketers at firms that are smaller, that are maybe not Am Law 100 or Am Law 200, know that this is still very relevant for them. Marketing technology is still so important. It may not be these huge systems, but there’s definitely technology that they can implement.
Adam: I think it’s true. I think the reality is true of any client that you’re looking at, any client that you do a lot of business with, whether it’s 500 or 50 contacts. The question you should ask as a marketer or a business developer is how to break them into groups. You want to have your VIPs, those that you not only invite to events and make sure are entertained, but also if they click on things or take action on marketing actions, that you know they’re your really important ones. You’ve got your next ring of those and then you’ve got the rest. It’s like a pipeline.
The reason I focus on the large accounts is that if you really look at it, in law firms, whether you’re a smaller law firm or a larger law firm, unless you’re doing a class action and you’re advertising and getting a lot of people in a class, you are really looking at a certain number of your clients and you want to make sure that you’re reacting to the most important folks. It doesn’t matter if you’re at a big firm or a smaller firm. I think the same rules hold true here.
Sharon: Absolutely, and there is technology for every size firm. It may not be the most expensive; it may not even be some of the more complex software or applications, but there’s still something that you can find and implement to give you the transparency you’re talking about or to be able to better track things.
Adam: Sure, you still have the basics. I think if you’re at any law firm and you’re in marketing, there are a few fundamental pieces of technology that you have to get right. First and foremost, you’ve got your website. Everybody does stuff on the web; your website better be well designed. It better be mobile friendly, if not mobile first. That’s becoming more and more important.
Sharon: What do you mean by mobile first?
Adam: That it should be dynamic, so when you bring it up on your mobile device, the pages make sense, the pages are readable, and you can get to the important information. They need to work on mobile devices as well as on computers. The website really is the hub of a lot of your marketing.
If we were going to look at that stack, you’d probably need a marketing automation system as well. In the past, you mainly thought about email, so maybe your email system has that. Whether you’re using some of the more popular ones, things like MailChimp or Detour or HubSpot, what you’re seeing more and more is that those email-centered communication systems really integrate. They integrate things on your website, they integrate with your social, and what they really are is marketing automation systems. So I would say your second most important thing you’ve got after your website is your marketing automation software.
Sharon: Let me interrupt you here because marketing automation can be such a broad term. Marketing automation, meaning that if somebody asks for something on your website, they automatically get an email saying, “Thanks for getting in touch. We’ll send you the piece of information right away.” Is that what you’re talking about?
Adam: I’m talking about how you can just send the email, but what you can also do is integrate that with cookies on the website. Not only can you see that they opened up the email, but you can also see what pages on the website they went to, and often you can see if they’ve interacted with your social media. What used to be email systems has really evolved into much more marketing automation systems because what they can do is show that they responded to an email or that they responded to social media, and you can see it all in one place by individual.
Many firms, not all, will also leverage marketing automation. They’ll say, “O.K., if somebody clicked on something, then we’ll send a follow-up that reminds them of it.” I think we see this most commonly in law firms when they have an event and when you click on something; it will automatically register you and remind you that an event is coming up. What we don’t do so much in law firms is what a lot of B2C companies do with marketing automation, which is when they get a strong enough signal that someone’s interested, they’ll send an offer. They’ll do what we call a conversion. They’ll try for conversion. They’ll say, “Act within the next 24 hours and get 20 percent off.” Those of us in law firms don’t really have the luxury of doing that. One of the big challenges in law firms is that the marketing is at those first steps of qualifying, but you can’t do the conversion online, at least not for most law firms.
Sharon: Right, we can’t close a sale like that. In terms of technology, if you look at the whole landscape, where are the holes? What’s the technology that’s missing, that might be simple technology that you could implement tomorrow?
Adam: I think there are two kinds of holes. One set of holes is between marketing systems and billing systems. We’ve got a huge amount of information in our time and billing systems. Using the example before, our billing system will tell us we’ve got five or six matters open for East West Bank. What we know is from the point of view of the client, we are doing all of these things for East West Bank. If you look inside our marketing systems, our marketing systems are almost always by individual. You can see John Doe at East West Bank. We can see the names of the people in East West Bank. We may have 50 people or 60 people that we email at East West Bank, but we don’t know who the important ones are, because our marketing systems are not set up that way. A way you can bridge that gap is through an ERM-type system or relationship management system that helps you bridge between your marketing system and your business systems, so that you can try to figure out who the important contacts are. I would say that’s one big gap.
The second big gap that we’ve got is what we call experience management, one of the things that Foundation does. What experience management is, is the information about what your law firm has done. It’s the matters that you’ve worked on. It’s the attorneys that have worked on those matters. It’s the outcomes. It’s the locations. It’s the industries you’ve served, because what will often happen in marketing and business development is, they’ll say, “We have an opportunity to offer services to”—let’s go back to East West Bank. They’re pitching for labor and employment. What is the process that business development and marketing groups go through now? Well, if they don’t have an experience management system, there’s usually some Excel spreadsheet or some document that’s not too up to date that will look at labor and employment matters. It may not have complete information about which clients we did work for. But imagine if you had at your fingertips all the different matters the firm had worked on, including all the different attorneys. If you have an experience management system, you can look that up. You can say, “For this kind of labor and employment matter, who are the clients that we’ve done this work for?” You can then further filter it and say, “Gee, have we done it for any banks?” What it allows you to do is very quickly get a list of comparable matters that you might use in pitching your business. An experience management system unleashes the power that’s in your other systems so you can use it for getting new business.
Another advantage, once you have those things, is what happens more and more frequently with large clients is they’ll say, “That’s great. We sent this to five firms and you came back with a really great response. We’re really interested in an alternative fee or a fixed fee or some unusual fee. If we asked for a fixed fee, could you tell us what you would charge for that?” If you’re not hooked into the time and billing system, which you are if you use an experience database, it’s very hard to do that. It’s a very big task, because you’ve got to look up matters; you’ve got to see what they averaged. But if you’ve got an experience management system, you can very quickly go to those comparable matters and say, “O.K., we did three of those for between $150,000 and $200,000, and we did five of them for $50,000, and then there were a few that were bigger.” You can start to figure out what is comparable, so you can give the client a pretty accurate ballpark by looking at what you’ve done in the past.
Sharon: It sounds so powerful. It’s funny, I was just flashing back to 20 years ago when I was with Arthur Anderson and we had to call partners all over the world, asking, “Do you remember if anybody ever did this kind of work or that kind of work?” Having this at your fingertips would be a lot easier.
Adam: It is. It may still be happening at law firms, the emails that go around saying, “Has anybody done X?” They still happen all time.
Sharon: Adam, at the technology conferences, which are always so fabulous and informative, in many ways the people there are preaching to the choir, because the legal marketers and business developers who attend are usually so hungry to have this technology, whether it’s on a larger scale or a smaller scale, but they’re getting resistance and pushback from their firms in terms of, “Oh, do we need it?” or “Do we need to make this investment?” What advice or suggestions do you have for your legal marketing colleagues for overcoming that resistance?
Adam: I think this is where the excitement and the opportunity are. For marketers and business developers, you need to follow the business. You should focus on the systems that are the most related to business development, because if you can show that it’s going to help bring business into the door, then that’s a big deal for law firms. The reality with law firms is that they are not growing. If they’re growing, it’s because they’ve acquired another law firm, but when you look at the large statistics, what’s in fact growing is in-house lawyers in companies. Everything is much more competitive in the law firm landscape. So the ability to get and retain work is even more valuable, and firms should be willing to invest in that. It’s not as simple as “my college friend who I play golf with,” whereas that might have been the way you got business in the past. Today, companies are much more businesslike about it. They’ll often have legal operations people, or they’ll have a mandate from the business to say, “How do we maintain or manage our legal costs? Let’s go through more of an RFP or a beauty contest in the way that we choose our law firms.”
Sharon: That’s certainly true. It’s a lot more competitive, and it seems like it’s going to continue that way, so the investment would make sense for any additional edge. Thank you so much, Adam, and congratulations on—well, it’s really congratulations to Foundation Software Group, because they got such an asset with you joining.
Adam: That’s very kind of you, but I’m very happy to be with this group. It’s a great group of people.
Sharon: It sounds like a fabulous suite of products. To everybody listening, that wraps up another episode of Law Firm Marketing Catalyst. If you’d like to contact Adam, we’ll have his information in the show notes. If you like what you heard and you would like to hear more, you can subscribe on iTunes or wherever you download your podcasts, and please rate us. We’ll be back next time with another thought-provoking guest who can help move your firm forward. Thank you so much for listening.
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