Law firms must free up their marketing and business development teams to take advantage of important opportunities in the post-pandemic legal environment.
2022 will be a rollercoaster year for most law firms as firms continue their strong performance in the first half of the year, leading to a record year in 2021. But by mid-2022, law firm demand and profits are down and costs are on the rise. By the end of last year, many firms had successfully adjusted the relationship between staffing, costs and revenue, stabilizing a lawyer's income growth. But now, 2023 presents unique challenges for most businesses, and their chief marketing officers (CMOs) have an equally unique role to play in meeting them.
Although 2023 looks like it's off to a good start this year, the collapse of many regional banks, the ongoing war in Ukraine and the uncertainty of rising interest rates have left clients and law firms somewhat uncertain about the direction of economic trends. It is not clear where the overall demand will come from in the first quarter. And the cost is going up, it is partially offset by the higher rates the company charges. This volatile mix makes continuous revenue growth even more important.
The client expects that legal service requirements will be met. 41% of consumers say they expect legal costs to increase this year, and only 20% expect legal costs to decrease. Clients seek critical industry and sector expertise as well as legal advice, noting that advice given in a business context is more valuable than the same advice given in a vacuum.
Of course, a law firm's marketing and business development teams play a critical role in turning these projections into actual revenue. But much of the marketing and commercial development has been knocked out by the pandemic. With the temporary demise of in-person marketing channels like events, many marketing and business development teams have been forced to experiment with new forms of digital communication and are now better able to measure their effectiveness.
On average, law firms allocate 1-2% of their revenue to marketing and business development budgets. CMOs think that's enough. These budgets come with caveats to being creative , and of course doing a bit more , although live events, often expensive, are added to the marketing mix.
Short run and long run equilibrium
To accomplish this mission, OMOs must focus on initiatives that are directly aligned with their company's strategic goals. These goals must reflect the client's priorities; Start with the type of work clients need, how they want to recommend it, and the most active geographies.
The company's strategic goals should also be informed by market intelligence. A data-driven approach, or data-driven approach, can help reduce internal debate. Powerful and reliable data directly from customers helps teams focus and move forward. Just as important, it prevents them from using resources on initiatives that may not have much impact.
A two-tiered approach is required to meet clients' legal needs. First, immediate client needs, which identify our data as the most pressing in regulatory, legal, and employment and litigation areas.
Since the practice deals with the immediate needs of the clients, they need to lay the foundation to meet the future needs of the clients. That way, when customers are ready to deal with data privacy, for example, companies will already have the right legal team with the right contacts. Today, consumers' long-term interests seem to revolve around regulation, data privacy, cyber security risks and environmental, social and governance (ESG) issues.
Balancing short-term and long-term customer priorities requires a balanced approach from CMOs, who often know they can't do it all at once. However, no matter how urgent or hectic the short-term needs may seem, it is important to consider the client's long-term priorities.
Growing Profile of Marketing & Business development
Other members of company leadership seem better positioned than ever to help CMOs pull off this balancing act. Those in senior marketing and business development roles report that company management is working better than ever, making it easier for managers to support other functions, including marketing and business development.
Also, CMOs say the value of marketing and business development is now better understood by law firm leaders. CMOs spend time convincing lawyers about a brand name, for example, or explaining the importance of marketing to law firms.
CMOs are starting to think about their data strategy, or lack thereof. They understand the importance of customer data, especially customer feedback, customer insights and priorities within their customer horizons. CMOs believe that their company's data sets can contain valuable insights. But they also recognize that their organization may not have the expertise to unlock this information. Obviously, they don't have the ability to analyze data. And without the ability to use the most important insights, they fear being stuck in data without taking actionable action – the dreaded analysis paralysis .
CMOs, like their customers, are asked to do two things at once: grow current business and shift their efforts to better attract new business indefinitely. However, growth and transformation require different skills. Growth often requires expanding existing efforts to achieve better results, and everything is faster, bigger, more. Conversion is a whole different animal that requires thought and iteration.
Law firm marketing managers seem well-equipped to do both, and importantly, corporate management seems to understand the importance of supporting them in this critical effort.
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