Marketing principles for law firms: have we entered a new era?

Law firm marketing has only existed as a concept for a relatively short period of time, but has gone through significant changes. In this article, Jolene Overbeck, Head of Marketing and Corporate Communications at global law firm Latham & Watkins, examines just how far law firm marketing has shifted from its humble beginnings, and reveals the reasons for this shift.

Moving up the agenda

In the current highly competitive market, law firms have put marketing at the heart of their strategic business endeavours. In the constant struggle to achieve a dominant position (or simply maintain market share), deepen client loyalty, and attract and retain leading talent, law firms have created increasingly sophisticated marketing programmes.

Law firm marketing in the UK and US has only really existed for twenty years, since the early 1980s in the States, and the late ‘80s in Britain, with the much-heralded relaxation of Law Society rules for law firm publicity. Now, with some individual country exceptions, Continental Europe is following their lead.

Early development of law firm marketing was slow and tentative. Marketing professionals struggled to implement their ideas with traditionally reserved professionals who for the most part scoffed at the need to market their services. Retention of talented executive level marketing personnel was low as firms whipsawed in their marketing objectives from an initial desire for high-level, sophisticated programmes to retrenchment to a basic support function. The regression occurred as lawyers confronted the need to change their own behaviour and pressured firm management to maintain a cautious, conservative stance. There were those firms however that were quick to see the importance of marketing as a tool to protect and enhance reputation and defend market share against competitors.

Many early adapters gained profile in some measure by being first to market with a particular type of marketing activity. Other firms followed, often merely reproducing the precedent initiatives. The early emphasis in marketing programming was on public relations and other promotional activities with the premise that if the marketplace knew the firm name, potential clients would perceive the benefits of hiring the firm over another.

The last two or three years have seen a sea change in the methods, priorities and significance of legal marketing. Many firms have embraced aggressive, “need to be first” marketing as a basis for maintaining or advancing their market position. These firms have created a “Chief Marketing Officer” role carrying greater responsibilities and the opportunity to offer high level strategic input. Even the most aggressive marketing tool, advertising, is widely used.

The major changes, and the reasons for them, which have taken place in the last couple of years to radically alter the face of law firm marketing can be divided into three principal areas:

Marketplace dynamics
Technological developments
Changing attitudes

Marketplace dynamics

The legal services marketplace has undergone major restructuring in the last few years. The gap between the firms who offer high level services world-wide and smaller, regional firms targeting the same business has widened considerably. The reason for this march across the globe by many firms is the demand by international clients for consistent, first class service in every jurisdiction in which they do business, with an integrated cross-border approach.

The competitive dynamic for top-tier global work is also changing. Until recently the UK firms, especially the Magic Circle, have dominated the European market. The US firms that are now firmly established in Europe however have entered the ring with the Magic Circle, creating a “New Global Elite” category of firms. The US heritage firms’ new strength on the Continent buttresses their strength in New York and the increasingly important technology centres, especially California’s Silicon Valley. Latham & Watkins, for example, combines a highly successful New York and Silicon Valley practice, with seven European offices. One the other side of the equation, it remains to be seen how the UK firms will succeed in penetrating these critical US markets. Clifford Chance made the most recent attempt in a failed endeavour to carve off 35 lawyers from the West Coast based Brobeck Hale & Dorr. Had this been successful, Clifford Chance would have been the first UK firm with significant presence in New York and Silicon Valley.

The heightened competition among top law firms comes on top of increased competition from the vastly bigger accountancy firms. For years these organisations have been mobilising their enormous resources on the marketing front and, as a result, they have become increasingly viable competitors for high-end work in Europe. Although the threat posed by multi-disciplinary partnerships (MDPs) has abated temporarily, the galvanising effect on law firms has left its mark.

Increased competition has brought about a revisitation of basic marketing principles. Firms have augmented their emphasis on client care and creating added-value programs, looking to maximise the business they receive from existing clients. Strategically involved marketing directors advise that marketing efforts directed at current clients are a great deal more cost effective than those aimed at ‘prospects’. Clients have also made it clear that they want lawyers who understand their business rather than simply the relevant legal field. Firms have responded by recruiting or forming specialised teams with focussed skill sets and specific industry knowledge. This in turn has created a need for marketing specialists with sector experience to complement and work closely with their lawyer teams. Many firms now have marketing professionals in every major office as well as “Strategic Area Coordinators” who are attached to a particular practice group or department.

As globalisation and consolidation continue, law firms need to ensure clarity of strategic vision and values across their network. Client care and the maximisation of existing business opportunities are the new imperatives. As a result, internal communications are critical. Driven by client preferences, practice area specialisation has created a need for specialised marketing support. Co-ordination of all marketing resources will ensure they all drive toward fulfilling the firm’s strategic objectives.

Technological developments

Few would dispute the profound effect that the last decade’s technological advances have had on the way law firms do business, in particular the advent of the Internet. These technological quantum leaps have had no less an effect on law firm marketing. Some firms have invested heavily in technology based marketing becoming virtual firms offering advice exclusively on the web. At the other end of the spectrum are firms content to use the web merely as an additional communications and promotional channel.

But perhaps the most interesting use of technology in law firms is as a tool to enhance client relationship management. Firms have established sophisticated and integrated contact management systems enabling the firm’s lawyers to leverage relationships held by other lawyers in the firm. Lawyers are also offered a 360 degree view of the client, its relationship with the law firm across practice lines and of other clients in the industry sector. Revenues tied to the client as well as a view of all transactions and cases for the client might complete the snapshot. All of these information nuggets enhance the lawyer’s ability to identify potential client concerns and opportunities and thus market more effectively.

Creation of these systems has effected a further change in lawyer attitudes toward marketing. In the past, many firms allowed lawyers to squirrel away contact information for private use only. The future demands a team-oriented approach with shared contact information viewed as a strategic firm asset.

Finally, the need to populate these integrated contact management systems with current, correct data has created the need for a new member of the marketing team – the data steward. A data steward’s responsibilities include ensuring data integrity and creating practice specific portals where contact information is viewed alongside other relevant data such as trade journal and top client website links. The data steward is also tasked with extracting information from the system about the use of certain client marketing activities that will help the marketing director draw conclusions about the efficacy of particular marketing initiatives. Thus, the data steward plays a crucial role in achieving the constant goal of firms to leverage their most important asset, client relationships.

Active client relationship management entails far more than the installation of contact management systems. Firms must create “added-value” programs for clients, monitor the satisfaction of key accounts and leverage all of the firm’s knowledge about its client relationships. Changing lawyer attitudes about sharing contact information is critical.

Changing attitudes

Lawyers have historically been hostile towards marketing as a practice, regarding it at best as a necessary evil. That mindset is changing as lawyers in the younger ranks openly embrace marketing and as firms significantly reward individual lawyer marketing efforts. In spite of the findings of last year’s UK survey by PricewaterhouseCoopers, which revealed that over two thirds of the equity partners at respondent firms spent less than ten percent of their time on marketing, the attitudes of senior lawyers have changed dramatically.

Correspondent with the change in lawyer attitudes about marketing has come the elevation of the marketing director to the “C” suite as “Chief Marketing Officer.” This increase in rank mirrors the corporate world, where the marketing function receives high priority. While some firms continue to mouth a desire for effective marketing while at the same time constraining the effectiveness of the marketing director by limiting their input at a high level within the firm, many law firm marketing directors do play key management roles. They are included in strategic planning committees, and some firms have given the marketing leader partner-level status to reflect the growing influence that the role undoubtedly carries.

An important consequence of this increased influence (and corresponding increase in resources allocated to marketing activity) will be significantly higher expectations on the part of lawyers for proof that marketing expenditures have contributed to the bottom line. There are obvious problems to be addressed in terms of managing such expectations. Results in the way of new or increased business may not be easily tied to a single marketing activity. However, law firm marketing professionals can and should present summaries of results in areas such as public relations, new business presentations, targeted client development activities, and seminars or sponsorships.

Finally, law firms are beginning to appreciate the impact of marketing on the recruitment effort. In the increasingly competitive market for top quality legal talent, partners are looking to the marketing team to establish an edge in the pursuit and retention of that talent. Marketing executives will need to use research tools to ensure communications that are on-point and well received by the target audience as the communications pieces can be vastly different to those used for developing client business.

With the welcome change in lawyers’ attitudes to marketing, there comes a greater requirement to account for a measurable return on investment. The necessity of not merely improving the numbers, but also husbanding the firm’s most important asset (its intellectual capital) has added yet another facet to the expanding marketing role.

Brave new world?

Against the background of growth and consolidation, globalisation and technological innovation, new-found faith and greater responsibility, marketing directors are carving a broader and deeper niche for themselves at the heart of legal business. The twin pillars of market forces and the growing sophistication of marketing practice provide the gateway to the new era.

Jolene Overbeck is head of marketing and corporate communications at Latham & Watkins. She can be contacted at Jolene.overbeck@lw.com