A few weeks ago, senior business development professionals from some of the largest firms in Boston gathered for the quarterly meeting of the Boston Roundtable on Legal Business Development. Our topic this time was “Developing new business in a down economy: Challenges and opportunities.”
Most people agreed that things are still getting worse. As one put it: “The cataclysm is coming... Big firms are reaching down for more clients and small firms are reaching up.” In this economy, every client is looking for greater value and “we all need to have a better understanding of what is in clients’ heads.” (As in previous posts about the Boston Roundtable, all quotes have been checked by participants to insure accuracy. However, names have been omitted to protect confidentiality and assure a frank discussion.)
The silver lining in the recessionary cloud is that it forces law firms back to basics, and makes them consider whether each item in the marketing budget is a solid investment in new business.
“At a time like this,” said one person, “you shake out the things that are not important and the places where people hide.” Said another: “I’m certainly not enjoying this, but it’s a natural part of the business cycle.”
“The economy puts a new urgency on proving your worth, every day,” said a third participant. She had recently switched roles within her firm, and now spends more time helping key practice groups to bring in new business in the short term. The change will be good for her firm, and good for her job security.
There’s also more emphasis on measuring results. One firm is adding a dashboard to its CRM to make it easier to keep track of the sales pipeline. Another has begun circulating a spreadsheet listing every lawyer in the firm, and their deadlines for marketing action items. This type of transparency increases both accountability and results.
The firm with the spreadsheet also requires lawyers to “sign a contract” whenever a marketing expense is approved. For example, lawyers who want marketing funds to pay for a trip to a conference must commit to what they will do before, during and after the conference to maximize the chances of bringing in new business. Another firm holds coaching sessions with lawyers who plan to attend a conference, to help them figure out how to follow up, and to insure that they do. “It’s a huge cultural shift to question lawyers’ participation in any conference,” said a third participant. “But for the first time I am able to get lawyers to commit to specific steps to use conferences to build relationships.”
If a particular lawyer won’t agree to follow up, or doesn’t have a good marketing reason for traveling to a particular conference, the down economy has put the marketing people in a stronger position to refuse to pay for it.
Sponsorships are also being evaluated more carefully than in the past. When one lawyer wanted to use $10,000 from the marketing budget to sponsor a conference, the marketing person from our group said to him, in the nicest possible way: “You should expect me to scrutinize requests like this. It’s my job to save the firm money. Would your partners agree to pay for something like this? Would you write a personal check?”
She did not say it out loud to the lawyer, but admitted in our meeting that she thought that sponsoring this particular program was a waste of money last year too. But when the economy was strong, expenses like this were routinely approved. The new, more competitive environment has forced law firms to look harder at expenses, and weed out the ones with the lowest return on investment.
One participant summed it up this way: “We are in a process of behavior modification. To some extent, we created the monster by not fighting harder when the economy was strong and lawyers wanted to spend marketing money on the wrong things. Now everyone expects to make a business case for every expense.”
The transition to hard-headed analysis may be painful, but in the long run it will be better for marketing departments, and better for law firms.
Comments