The recent Marketing Partner Forum, held January 25 – 27 in Rancho Palos Verdes, California, was the place to be for leading insights on law firm management, succession planning, marketing strategy, business development, branding and industry trends.
Below we’ve outlined key takeaways from the panels that law firms can put into action.
I. Aligning the Stars: Collaborative Management Strategies in Lawyer Compensation
Moderator: Janet Stanton, Partner, Adam Smith, Esq.
|J. Stephen Poor, Partner & Chair Emeritus, Seyfarth Shaw LLP||Jason Grunfeld, Partner & Head of Business Development, Kleinberg, Kaplan, Wolff & Cohen, P.C.|
|Anne Ristic , Co-Managing Partner, Toronto, Stikeman Elliott LLP|
Compensation is one of the most vexing aspects of managing a law firm. Moreover, your firm’s compensation system influences and reflects upon your culture. Fortunately, you can manage this issue with foresight, transparency about expectations and metrics, fair policies regarding origination credit and other best practices that have been successfully applied in the legal industry.
Central to a discussion of compensation are the extent to which lawyers are involved in a firm’s marketing efforts and how a firm helps associates build a book of business. Lawyers generally aren’t enthusiastic about marketing, but as one panelist pointed out, marketing and business development is part of being a well-rounded lawyer. It’s also a business discipline increasingly recognized as indispensable to the practice of law. It’s up to management to shape a rational compensation strategy that encourages lawyers to take part in business development.
Your compensation strategy should align with your firm’s overall strategy. Credit should be shared by contribution, not awarded based on seniority, and your compensation policies should be simple and clearly stated.
The panel discussed the importance of financial incentives being tied to desirable behaviors versus a deliverable. For example, desirable behaviors are attorneys regularly attending networking events or pitching potential clients, whereas a deliverable is landing a client. While landing clients is the ultimate goal, many firms are rewarding attorneys for desirable behaviors to encourage participation in marketing and business development activities.
While the billable hour model is being overturned, to the relief of many, compensation systems are becoming less transparent. People are less likely to know what other associates and partners make, which allows for greater flexibility regarding fees and a greater spread in compensation.
Additionally, more legal professionals are working in teams. While this creates new business opportunities, it also further complicates compensation structures. One firm talked about how its partners are being remunerated based on three-year cycles, encouraging them to play the long game and invest in business development activities like networking and relationship building. Another firm discussed how it bunches partners in “bands” that are based on certain metrics and, in turn, are compensated differently.
Giving associates origination credit, as opposed to simple year-end bonuses, has become important to recruitment efforts. Young lawyers who bring in business are now more likely to receive cash flows throughout the year instead of an annual lump sum.
Communication and transparency
Often management has clear ideas about what metrics people are being evaluated by, but those metrics aren’t being communicated. Lawyers should have a clear understanding of management’s priorities and how their performance is being measured. Livelihoods depend on understanding this. Compensation reviews, therefore, should be conducted in person.
Being mindful of the above practices and trends should help make compensation a less thorny issue.
II. Mastering Partner Succession: Planning and Practice Group Transitions
Moderator: Bruce MacEwen, President, Adam Smith, Esq.
|Lisa Simon, Chief Marketing & Business Development Officer, Lewis Roca Rothgerber Christie LLP||Elizabeth Sharrer, Partner & Firm Chair, Holland & Hart LLP|
|Mark Usellis, Chief Strategy Officer, Davis Wright Tremaine LLP|
Succession planning isn’t something a lot of firms relish, yet it’s not something a firm can ignore if it wishes to remain profitable from generation to generation. The Marketing Partner Forum survey delved into succession planning. Its conclusions offer plenty of insights for law firms of all sizes.
Succession planning requires far more time than it’s being given
Of 120 law firms surveyed, 40% lacked a succession plan and another 40% had succession plans that were only being put in place one to two years prior to transition. Professionals with experience in succession planning know that a worthwhile succession plan requires at least five years of runway and, ideally, eight to ten.
Encouraging a firm-first mentality
Part of the problem the panelists cited is that lawyers often have a me-first mentality as opposed to a firm-first mentality. Equity doesn’t have a long-term value because when a partner retires, his or her financial relationship with the firm ends. This leads to a short-term mindset. Although the idea that many partners don’t care what happens to a firm after they leave is clearly a generalization, it was the perspective of the panelists and probably much of the audience.
Passing the torch
How can you be successful when it comes to succession planning? First, succession planning takes finesse, emotional intelligence and patience, and you want to include people with those skills. Another key part of succession planning is to institutionalize clients so that they aren’t tied to just one person. A client relationship should survive an attorney’s departure under normal circumstances.
One attending law firm described its plan where each lawyer has a mandatory three-month sabbatical every five years. This requires teamwork so that the client isn’t sidelined and develops relationships with different people at the firm. In terms of succession planning, you also want to ensure that your clients have a voice in whom they’re going to be working with, rather than simply being passed on to another lawyer.
Succession planning requires a long time horizon and is essential to continuity of client relationships. Perhaps for that second reason more than any other, it’s essential to the long-term financial health of any firm.
III. Marketing Partner Forum Survey
|Silvia L. Coulter, Principal, LawVision Group, LLC||Steven R. Petrie, Chief Strategy Officer, Faegre Baker Daniels LLP|
The Marketing Partner Forum Survey, an annual data drive dive on legal marketing and business development across the legal industry, reveals a lot about priorities and business practices across the legal industry. What did it include this year? Below, we discuss the key takeaways.
In a rapidly changing marketplace, it’s not necessarily the strongest or the smartest that survive, but the most adaptable. The legal industry has seen increasing client pushback on rates; therefore more discounts are being offered, and according to survey results, patent litigation is the only practice area that experienced growth in 2017. So how do firms need to adapt to stay competitive and valuable?
Growing prevalence of law firms with marketing departments
Of survey respondents, 78% reported that they did not have marketing and business development departments, including sales teams. That said, the number of law firms with sales teams doubled from 2016 to 2017. On average, firms spent 2.2% of gross revenue on business development. Firms with exceptionally high marketing budgets reported that number at 4.6%. Keep in mind, however, that different firms lump different expenses, such as sponsorships and client outings under marketing and some do not, focusing instead on traditional and content marketing expenses related to website development, webinars, etc.
Nearly 75% of firms reported that they’re focusing on improving business development and marketing, while 52% are trying to control marketing costs. Getting lawyers engaged in business development is a challenge across the industry and a discussion in itself.
Related to focus, website management and public relations are the most outsourced functions in the legal industry. This makes sense from the standpoint of both direct and opportunity costs. If your firm is doing these things in-house, do the cost savings (if any) justify the distraction?
Return on investment
Approximately 65% of firms reported that they’re measuring the effectiveness of their marketing efforts; however, they’re not all using the same metrics. Some are simply looking at the number of RFPs they are being asked to respond to. Just over half are looking at a corresponding increase in business, while a little over one-third are monitoring the number of new clients.
Only a quarter of respondents, however, reported looking into the return on investment (ROI) of specific campaigns, such as social media ads, pay per click advertising and podcast series. It is not easy to track ROI for every type of marketing, but with new software and platforms such as AdWords, it’s increasingly practical. This shouldn’t be overlooked as it helps you identify where your marketing dollars pack the most punch.
A couple important metrics that are sometimes overlooked are lead generation and the portion of qualified leads that convert. The weakness in your business development pipeline might not be marketing, which is about generating leads; it may be that your salespeople or lawyers aren’t converting them. Ignoring this may lead you to the false conclusion that your marketing budget is being misspent.
IV. The Market Settling: Assessing Strategic and Profitability Measures in Practice Specialization and Segmentation
Moderator: Jan Anne Dubin, Principal, Jan Anne Dubin Consulting
|Nathan A. Darling, Chief Business Development and Market Officer, Beveridge & Diamond, P.C.||Dan Harper, General Counsel, GEA Farm Technologies, Inc.|
|Tim Mohan, Chief Executive Partner, Chapman and Cutler, LLP||Mark Klender, Principal, Strategy and Operations and Service Delivery Transformation, Deloitte Consulting|
|Jaimala K. Pai, Principal Legal Counsel in New Business Models Health Law, Medtronic|
If there’s any magic bullet of marketing, it’s focus.
The benefits of specialization include less of a need to prospect for clients as you become the go-to person for a particular area. Additionally, you increase your potential for profitability when you specialize because you’re continuously building on prior knowledge, networks and experience—not reinventing the wheel. This also makes scaling easier, and because you’re able to get more and better-quality work done in less time, you can justifiably charge a premium.
We were intrigued enough by this panel discussion to treat it as its own entry. Here’s the link:
V. Combined Sessions: Branding, Analytics, Social Media and Artificial Intelligence
Moderator: Nadia Rahman, Associate Vice President & Senior Digital Analyst, Finn Partners
|Jennifer Mir, Practice Development Director, Munger, Tolles & Olson LLP||Greg Fleischmann, Chief Marketing Officer, Lowenstein Sandler LLP|
|Michael J. Mellor, Director of Marketing & Business Development, Pryor Cashman LLP|
Nearly 33% of consumers start their search for a lawyer online, and more tellingly, 40% of law firms responding to a recent survey have retained clients because of their blogs. A good digital marketing strategy is becoming paramount to law firms, and analytics can’t be ignored.
Here are a few things to consider in your firm’s digital marketing efforts:
Analytics: an overview
How does a firm gather and act on analytics? Monitoring traffic to specific pages on a firm’s site, how search engine queries or ad campaigns are driving that traffic and what types of traffic are actually driving conversions is straightforward with Google Analytics and other tools. Build upon successful campaigns that are delivering clients (conversions) and discontinue campaigns with unsatisfactory returns.
Analytics eliminates guesswork. If you’re not doing it in-house, outsource it and act on the data. This will pay in spades.
Social media strategy
Regarding social media marketing, formulate a strategy, identify your assumptions and stick with that strategy for at least long enough to learn from it. Redirect as necessary, but don’t get distracted by shiny objects.
For instance, an associate or marketing manager may want to start an Instagram account, but before acting on that, management needs to ask some questions. First, do the kind of clients in need of our services use Instagram? What are their demographics? Can we create or curate relevant, visual content that attracts business? Finally, does this complement our overall content marketing strategy?
You get the point. Avoiding shiny objects means having a coherent strategy and asking the right questions.
Social media best practices
Adrian Dayton, Founder & Chief Innovation Officer, ClearView Social
Adrian pointed out that lawyers and marketers have overlapping, complementary objectives that they view through different lenses. Lawyers don’t want to be burdened with tasks that conflict with billable hours, and marketers want solutions that save time, effort and resources.
Adrian also noted that while most professionals regard LinkedIn as the best place to share your content, Facebook and Twitter are also great ways for lawyers to drive traffic. Your audience is just as likely to be getting business articles through those channels, and you should really be posting to all three.
On social media, you should be posting your content three times, one day apart, to reduce the likelihood that it will be lost in the noise and create a snowball effect of sorts. Combining these best practices and a sound overall social media strategy can make you a marketing machine.
Robert Algeri, Partner & Co-Founder, Great Jakes
When it comes to attracting people to your site and keeping them there, text alone no longer cuts it. High-quality visuals are essential to good search engine rankings and keeping people on-page. Artificial intelligence (AI) can increase your site’s relevance by matching visual themes to the user’s IP address. For instance, someone visiting your site from Southern California will have visuals tailored to that region, while a visitor from Ohio will have a different user experience.
One debate about blogs is whether they should fit within your website domain. Readers may experience a disconnect between your blog and your firm’s suite of services if they aren’t located under the same domain, so the recommendation is to keep them together.
Well-written blogs create credibility and trust, so they’re important. They’re useful as content teasers to draw people deeper into your website. Finally, blogs are great for directing people to your site because people researching legal issues will typically search for the kind of timely, specific things that are best addressed in blogs.
Whether online marketing excites you or not, a good digital strategy is no longer something law firms can afford to sideline. The internet is how today’s clients are shopping for legal services, and your online presence is often a litmus test for credibility and trustworthiness. Whether your firm has the wherewithal to do its marketing in-house or opts to outsource it, legal marketing is a high priority for anyone wishing to remain competitive.
We hope to see you at the 26th Annual Marketing Partner Forum from January 23-25, 2019, at the Ritz-Carlton in Laguna Niguel.