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The Evolution of Marketing and Business Development Departments to Meet New Challenges: p p gA Hildebrandt Institute Survey
S C SSilvia L. Coulter, MPSLisa H. Rohrer, PhD
Sponsored by:
MPF 2012: New approaches to meeting changing demands
Today’s Agenda• The economic context
• The law firm response– Competitive advantage– Marketing headcounts and budgets– Organization structure and roles and responsibilities
Th l f i l di• The role of social media
• Measuring effectiveness
• Challenges facing marketing and BD senior managers
THE ECONOMIC CONTEXT
P M it E i I d (PMI)Peer Monitor Economic Index (PMI)
80
Q3 PMI Score: 56
70
75
80
C dit C i i
55
60
65 Credit Crisis
40
45
50
30
35
40
Q1 Q2 Q3 Q4 Q1 Q2 Q3 Q4 Q1 Q2 Q3 Q4 Q1 Q2 Q3 Q4 Q1 Q2 Q3 Q4 Q1 Q2 Q3Q1 Q2 Q3 Q4 Q1 Q2 Q3 Q4 Q1 Q2 Q3 Q4 Q1 Q2 Q3 Q4 Q1 Q2 Q3 Q4 Q1 Q2 Q3
2006 2007 2008 2009 2010 2011
Key Performance Measures: All Segments
6%Period over Period Growth
3%
0%
Gro
wth
Rat
e
-3%
G
-6%Demand Worked
RatesFees
WorkedProductivity Lawyer
Growth
2011 v 2010 Q4'11 v Q4'10 Dec '11 v Dec '10
Demand Growth by Practice
10%Period over Period Growth
5%
10%
0%
Gro
wth
Rat
e
-5%
G
Proportion of overall market
-10%IP- Lit L&E Litigation Real
EstateCapitalMarkets
GeneralCorp
M&A Tax Bankruptcy
5%Proportion of overall market
8% 33% 6% 6% 11% 3% 3% 3%
2011 v 2010 Q4'11 v Q4'10 Dec '11 v Dec '10
Average Daily Demand: All Segments+10%
Avg.
J F b M A M J J l A S O t N D
-10%
Jan Feb Mar Apr May Jun Jul Aug Sep Oct Nov Dec
2007 2008 2009 2010 2011
Rate Progression: All Segments$525
$475
$500
$425
$450
$400
$425
$375Q4'08
Q1'09
Q2 Q3 Q4 Q1'10
Q2 Q3 Q4 Q1'11
Q2 Q3 Q4
Standard Worked Billed Collected
Realization against Standard: All Segments92%
90%
91%
87%
88%
89%
85%
86%
87%
84%Q4'08
Q1'09
Q2 Q3 Q4 Q1'10
Q2 Q3 Q4 Q1'11
Q2 Q3 Q4
Billing Collection
18%Rolling 12 YOY Change
Expense Reductions Losing Steam
12%
15%
3%
6%
9%
-3%
0%
-9%
-6%
Q42008
Q12009
Q2 Q3 Q4 Q12010
Q2 Q3 Q4 Q12011
Q2 Q32008 2009 2010 2011
Direct Indirect
Challenges
Sluggish demand Rising expenses
Alignment of internal and te a a d
external strategy
Pricing pressure Mature and transforming industry
LAW FIRM RESPONSE
P i iti f L Fi L dPriorities of Law Firm Leaders
75%Increasing cross selling to existing clients
53%
75%
75%
Lateral hiring at partner level
Increasing profits per partner
Increasing cross selling to existing clients
49%
49%
53%
Improving realization rates
Greater use of client teams
Lateral hiring at partner level
46%
49%
Increasing average billable hours per attorney
Taking steps to further enumerate in a clear, concrete manner the value your firm delivers …
p g
42%
0% 50% 100%
Increasing use of alternative fee arrangements (e.g., fixed fees, success fees, etc)
Below is a list of topics you may or may not be thinking about as part of operating your firm in 2011. For each, please select the response that best reflects the priority level your management team will assign to each over the next 12-24 months..
Source: Thomson Reuters Executive Briefing Survey 2011
Hildebrandt Institute Marketing and Business Development Survey• Internet-based survey targeted at chief marketing
and business development officers
• 77 firms participated
• All participants receive copy of results
• Survey fielded in December 2011
Survey Participants
SeniorOther9% Senior
business development
officer28%
9%
Senior marketing and
business d l t
S i
development officer33%
Senior marketing
officer30%
Participating Firms
Number of attorneys Number of officesA 499 11Average 499 11Median 250 7
Competitive Advantage: Why do clients choose your firm over competitors?
Themes of Creating Competitive gAdvantage
26C t/ l 2619
13
Cost/valueService
Coverage
1088
ExpertiseIndustry
One-firm approach 87
6
One-firm approachPractice area
Geography
555
Understand businessInnovation
Efficient
Competitive Advantage In Their Own Words…
Structuring Marketing and Business Development in the Firm
Organization Structure of Marketing/BDOrganization of Designated
Marketing and BDStructurally distinct Integrated
Marketing Partner?Yes No
11%
30%
70%89%
70%
Reporting StructureMarketing and/or BD Other
13%
Chief Operating Officer
34%
partner/ committee
11%
13%
Managing • Executive committee ti thPartner/
Chairman42%
sometimes oversees the marketing and BD department as well
Centralization of Departments250 attorneys and fewer Over 250 attorneys
69%
21%
38% 38%
21%10%
0%10% 10%
All marketing/BD personnel are centralized in one location
Over 50% are in one location
25-50% are in one location
Fewer than 25% in any one office
one location
Median Attorneys per Department FTE
125 0125.0
Integrated departmentsAverage: 32.0Min: 11.9Max: 90
50.0
28.5
Marketing Depts BD Depts Integrated DeptsMarketing Depts BD Depts Integrated Depts
Expectations for 2012: Integrated Departments
250 attorneys and fewer Over 250 attorneys
67%
30%
45%
18% 15%
0% 0%
15%6% 3%
Increase headcount
10% or more
Increase headcount less than
10%
Keep headcount relatively
stable
Decrease headcount less than
10%
Decrease headcount
10% or more10% stable 10%
Budget changes 2011 vs. 2010250 attorneys and fewer More than 250 attorneys
44%
52%
31% 30%
13%8%
5%
15%
0%3%
0%
Increased 10% or more
Increased less than 10%
Stayed approximately
the same
Decreased less than 10%
Decreased 10% or more
the same
Peer Monitor Data: Overhead Expense Growth
Rolling 12-Month Trend
15%
20%
25%
5%
10%
Gro
wth
Rat
e
-10%
-5%
0%G
Proportionality:
-15%
Sta
ffC
omp
Ben
efits
cupa
ncy
Offi
ce
chno
logy
arke
ting
& BD Libr
ary
Out
side
Serv
ices
ecru
iting
essi
onal
29% 15% 25% 9% 8% 4% 4% 3% 1% 0.5%
Occ
Tec M O S Re
Pro
fe
Q3 2010 Q3 2011
Expectations for 2012 vs. 2011
42%
250 attorneys and fewer More than 250 attorneys
34%32%
30%
42%
21% 21%
8%5%
3% 3%
Increase 10% or more
Increase less than 10%
Stay approximately
the same
Decrease less than 10%
Decrease 10% or more
the same
Most Common Marketing and BD Roles• Event management
H t t f li t d t ti l li t 100%– Host events for clients and potential clients 100%– Approach partners with ideas for events 98.6%
• Marketing communications– Design and produce marketing materials 98.6%– Facilitate newsletters 98.6%– PR/media relations 98.6%– Directories/surveys 98.6%– Advertising 94.3%
• Research and analysis– Conduct research on potential clients 94.3%– Conduct research on current clients 91.4%
• Planningg– Assist PGLs with developing marketing plans 95.7%
Other Common Marketing and BD Roles• Training
P id t i i t i t BD 90 0%– Provide training to associates on BD 90.0%– Provide training to partners on BD 87.1%
• Research & Analysis– Conduct research on competitors 84.3%– Conduct market and industry analysis 81.4%
• Misc– Lead dev’t of firm-wide process for RFP response 88.6%– Managing social media for business development 87.1%– Maintain client database 82.9%– Develop marketing plans for all the practices 72.9%
Less Common Marketing and BD Roles• Working with laterals
L t l i t ti 65 7%– Lateral integration 65.7%– Lateral hiring 25.7%
• Client relations– Managing key client program 58.6%– Visit with current clients 57.1%– Visit with potential clients 42.9%– Gain access to new potential clients for partners 40.0%
• Misc– Pricing strategy 52.9%– Pipeline reporting 37.1%– Provide training on RFP writing 24.3%– Legal work re-engineering 12.9%
Use of Client Teams250 attorneys and fewer More than 250 attorneys
82%
45%
32%32%22%
8% 11%
Yes No, we have no plans to implement client
t
No, but we are planning to implement
li t tteams client teams
Number of Attorneys on Client Teams250 attorneys and fewer More than 250 attorneys
44%42%
35%31%
35%
19% 19%
6%3%
3 or fewer 4 5 6 10 Greater than 103 or fewer 4-5 6-10 Greater than 10
Data Suggesting Client Teams Have Measureable Impact on Business?
• Revenues
• Profitability
• New matters Yes31%
originating from client team initiatives
No69%
• Increased collections
• Cross marketing
• Client feedback
Client Teams and Attorney Compensation
Yes Unsure19%
18%16%
Yes Unsure
6%
250 attorneys and fewer Over 250 attorneys
Trends in Compensation and Client Teams• Firms are starting to experiment….
– Bonus• “Money available for successful client relationship-building
activity ”activity.• “A minor consideration in comp; possible bonus for leadership
or outstanding contribution”
Origination credit– Origination credit• “If you’re on the team, you have the potential to share in
origination.”
– Subjective input• “Part of review, but currently not measureable, more
subjective”
THE ROLE OF SOCIAL MEDIA
Dedicated Staff to Social Media47% • Graphic design/technology
liaisonliaison
• Communications & PR manager
28% • Online marketing manager
• Manager of social media
• Marketing managerMarketing manager
• Marketing coordinator
• Webmaster
250 attorneys and fewer
Over 250 attorneys
• Interactive marketing specialist
• Marketing assistantand fewer attorneys
Social Media Policies250 attorneys and fewer Over 250 attorneys
68%
84%
24%
9%12% 9%3%
Yes No, but we're working on one
No, and we're not working on oneon one working on one
What Kind of Social Media?250 attorneys and fewer Over 250 attorneys
100.0%
85 0%88% 84%85.0%79.0%
56.0%
84%72%
59%
LinkedIn Twitter Blogs FacebookLinkedIn Twitter Blogs Facebook
Trends in Social Media Use (Last 12 Months)
Increased Stayed the same Decreased85% 85%
74% 72%
15% 15%
26%20%
15% 15%
0% 0% 0%8%
LinkedIn Twitter Facebook BlogsLinkedIn Twitter Facebook Blogs
Social Media Effectiveness
Extremely effective Somewhat effective Somewhat ineffective Not at all effective
24% 60% 16% 0%Blogs
Extremely effective Somewhat effective Somewhat ineffective Not at all effective
2%75% 18% 5%LinkedIn
2%66% 27% 5%Twitter
2%43% 35% 20%Facebook
The Care and Feeding of Social MediaFrequency of Updating Content
38%
31%
LinkedIn Facebook Twitter
23%19% 18%
15% 16%
29%
16%13%
16%13%
0%
10%11%13%
3%
13%
6%11%
2% 0% 2%
At least once a day
A few times a week
About once a week
A few times a month
Once a month
Every few months
We don't regularly update contentcontent
Use of LinkedIn vs. FacebookLinkedIn Facebook
84%Last year, 23% used LinkedIn and L t
31%
42%
31%
44%
16% used Facebook
Last year, 19% used LinkedIn and 6% used Facebook
24%31%
19%27%31%
17%22%
Recruiting entry level associates
Recruiting lateral
associates
Recruiting lateral
partners
Finding potential clients
BD for individual attorneysassociates associates partners clients attorneys
Other Uses of LinkedIn and Facebook
LinkedIn FacebookLinkedIn• Alumni relations
• Client and prospect research
Facebook• Announce civic/community
events
• Internal firm working groups
• Search engine optimization
• Alumni relations
• Public relations
C di ib i• Promotion of events
• Recruitment of staff
• Content distribution
• Following clients
Comments on Effectiveness of LinkedIn• Some partners find it extremely effective, but its effectiveness is dependent
upon: (1) the attorney’s understanding of their target market and their uniqueupon: (1) the attorney s understanding of their target market and their unique advantage to their potential customers; (2) Their willingness to connect regularly with those they encounter via LinkedIn; and (3) Their willingness and availability to update status and share thoughts on industry news, articles, etc.articles, etc.
• LinkedIn is the most appropriate social platform for professional services firms. The integrated traffic increases our brand awareness and improves the first step of BD process.
• LinkedIn is valuable as a research tool and can have value for distributing marketing content (which we are exploring, but not urgently). For actual networking and business development (making “official” contact with clients/potential clients, referral sources etc.) it is a weak tool compared to p , ) pother available options. I teach attorneys to build relationships offline.
Comments on Effectiveness of Facebook• We have raised visibility of the firm and our attorneys and staff. We
post company “team” outings seminar and event photos and havepost company team outings, seminar and event photos and have had great interaction with clients and members of the media.
• Facebook is a platform where we can engage people. I can post from the firm’s FB page and that information can easily befrom the firm s FB page, and that information can easily be redistributed to our attorneys’ individual pages.
Comments on Effectiveness of Twitter• It has directly led to several media hits, as well as direct feedback
from clientsfrom clients.
• I can’t believe that in-house counsel sit around reading tweets. We do it to ‘keep up with the Joneses’ and to make it clear that we’re not a bunch of Ludditesa bunch of Luddites.
• It remains to be seen what kind of impact Twitter can really have.
Comments on Effectiveness of Blogs• Great exposure for our attorneys. We have three blogs….It was a hard sell to
get our first blog, but now the attorneys are saying we need more in eachget our first blog, but now the attorneys are saying we need more in each practice area – they realize the benefits from blogging and raising their credibility.
• Our blog postings are picked up by many traditional media and other bl S f tt h d t ll t d ttibloggers. Some of our attorneys have anecdotally reported getting new contacts as a result of their blog postings. In a couple of instances this has led to business. It’s still slow, but we are getting real traction.
• We use knowledge management attorneys to do all blog work…12 attorneysWe use knowledge management attorneys to do all blog work…12 attorneys who do nothing but evaluate and write on employment-related litigation and legislation.
• It seems like attorneys want to be on the forefront of all the new, popular t h l Y t d it l f k ti f i l h th ttechnology. Yet, despite pleas from marketing professionals who warn that their active participation will fall off after a few weeks (which could look bad for the firm), the attorneys march forward…and their participation eventually does fall off.
What’s Next in Social Media?
MEASURING EFFECTIVENESS
Tracking Social Media Results36.4% • “We have systems in place to track
all new information. Successes are30.9%
18.2%
all new information. Successes are reported at management committee and partner meetings.”
• “Every month I submit a ‘Social M di D hb d’ hi h i l d
3.6%
Media Dashboard’ which includes followers, likes, blog subscribers and track all traffic via Google Analytics. Last three months, we h h d d t ffi th h llhave had record traffic through all web marketing combined. It has amazed our managing partner when they see hard numbers.”
Job Security!Assessing Effectiveness of the Function
76%250 attorneys and fewer Over 250 attorneys
59%51%
76%
50%51%
36% 33%
50%
32%
21%
Marketing and BD activities
Increase in business from existing clients
Number of new clients
We don't measure it
existing clients
Measuring ROIPercent measuring • “I try to tie back revenue to
every investment we make I
16%
ROI every investment we make. I track revenue when possible, other metrics when not.”
• “While it is hard to measure by
8%
While it is hard to measure by dollar out vs. dollar in, we are very good at capturing marketing & business d l d8% development successes and measuring those successes against real dollars.”
250 attorneys and fewer
Over 250 attorneysand fewer attorneys
CHALLENGES FACING MARKETING AND BD SENIOR MANAGERSMANAGERS
Support From Other Departments% Somewhat High Support % Very High Support
25.0%
22.5%
43.8%
62.5%
COO
Managing partner/Chair
48.8%
34.6%
32.5%
33.3%
Practice group and dept leaders
Mgmt committee
30 0%
26.9%
39.2%
26 3%
14.1%
17.7%
Human Resources
Knowledge Mgmt
Information Technology
31.3%
27.5%
30.0%
28.7%
17.5%
26.3%
Finance
Recruiting
Human Resources
What Else Can Other Departments Do?• More collaboration more commonly mentioned
“Vi h th b i th t i t f th– “View each other as being on the same team in support of the attorneys.”
– “Get me more involved in strategy from the onset.”– “Work as a more integrated team.”Work as a more integrated team.
• More resources and support also commonly mentioned– “Understand better that to make money you need to spend money.”– “Visible vocal support from Chairman and leadership ”Visible, vocal support from Chairman and leadership.– “Our IT and Marketing are very separate departments. It would be
helpful to have their support on hard ware issues regarding the Website (i.e., servers, etc.)
• More respect/understanding also a theme– “Consider us a client, as they do the attorneys, and not put our work ‘off’”– “Have a better understanding of what our department does, our areas of
ti h t l h lt k th fiexpertise, what our goals are, how our results make the firm more successful.”
Most Effective Use of Time
53%C hi 53%
28%
Coaching
Strategy and planning
14%Working with clients
14%
10%
Managing the marketing and BD team
Collaboration/integration 10%
3%
Collaboration/integration
Improving processes
An Unexpected Benefit?
Senior marketing and BD executives can serve in an
• “A roaming integrator of ideas information and
gintegrating role, bringing the firm closer together.
• A roaming integrator of ideas, information and opportunities.”
• “Facilitating communication among partners ”Facilitating communication among partners.
• “Face time with partners discussing how to growth their practice, making connections to other p , gpartners, practices and offices in the firm.”
Change One Thing About Role?
Higher level work/ Less admin/ 30%
26%
Higher level work/ Less admin/ More time with clients
More resources/more time 26%
12%
More resources/more time
More leadership support
11%
p pp
More cooperation/support from attorneys
11%
y
Better allocation of resources
Examples of Desire for Higher Level Work– “Spend less time managing my team and keeping the
department running and spend more time on clientdepartment running, and spend more time on client interviews and highest level strategy, including lateral partner interviewing and regional growth strategies in emerging markets ”emerging markets.
– “Getting involved in so many details that require time away from the important issues Dealing with “Urgent”away from the important issues. Dealing with Urgent matters from the same lawyers who send us RFPs the day after they are due and who repeatedly rework copy, plans and other materials until they are no longerplans and other materials until they are no longer relevant.”
Examples of Desire for More Leadership Support
– Having to spend so much time explaining to management about how the marketing world has changed I feel that Iabout how the marketing world has changed. I feel that I need to come up with the next great idea that will help my firm implement it on top of everything else and then explain it to my management It would be great ifexplain it to my management. It would be great if management would be more clued into marketing so that I didn’t have to “sell” the “extra” stuff we’re doing.Lack of direction and leadership from management as it– Lack of direction and leadership from management as it pertains to the marketing and business development initiatives.Centralize marketing more and give the department more– Centralize marketing more and give the department more authority to make decisions and require people to abide by our plans.
Examples of Desire for More Attorney Support and Cooperation
– “Convince people that trying and failing is better than not trying at all ”trying at all.
– “Try to get attorneys to focus on their strengths instead of focusing on brilliant marketing ideas for which have no h f il bl t i l t ”chance of success nor available resources to implement.”
– “More input from partners”– “Stop having the attorneys resist every single thing and p g y y g g
just accept the fact that I’ve been doing this successfully for 25 years.”
Key Takeaways• Manage and plan for your own professional
d l tdevelopment
• Align your department’s goals with that of the firm
f f• Hire the best and brightest—they are a reflection of you/your department
• Work with peer colleagues on large scale initiativesWork with peer colleagues on large scale initiatives
• Approach proactively, firm leadership and seek input/ideas
• Delegate where possible
• Seek opportunities to make connections across the firmpp
Thank You!Silvia L. Coulter, MPSPrincipal
Lisa Rohrer, PhDDirector of Executive Education and
LawVision [email protected]
Research FellowCenter for the Study of the Legal Profession Georgetown University Law [email protected]