COMPANY CONFIDENTIAL
2015 Thomson Reuters Legal Executive Institute Annual Marketing and Business Development Benchmarking Survey
Background, Objectives and Methodology
Background and objectives The Thomson Reuters Legal Executive Institute hosts the annual Marketing
Partner Forum, which targets legal marketing and business development professionals. As part of this forum a presentation is given showing legal industry trends for marketing (MKTG) and business development (BD). The survey aimed to provide content for the industry trends presentation
Methodology • An online survey was conducted in December 2014. 63 survey respondents
that were marketing and/or business development leaders in medium and large firms (80+ attorneys) participated
• For their participation, respondents will receive a copy of the presentation for their participation
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Industry Context
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Demand
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Billing Rates
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Realization
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Profitability
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Respondent Profile
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The majority of respondents were from larger firms (150+ attorneys) with at least five offices
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5%
25%
31%
25%
14%
1
2-4
5-9
10-19
20 or more
# of firm offices
5%
27%
39%
29%
30-79
80-149
150-499
500 or more
# of attorneys
Most respondents had senior roles, reported to the managing partner/chairman, were experienced and earned $100K to $350K
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2%
8%
24%
32%
34%
Practice Group Head
Other MKTG or BD role
Most senior BD officer
Most senior MKTG officer
Most senior MKTG and BD officer
Position
10%
27%
27%
36%
Less than one year
1-2 years
3-4 years
5 or more years
Years in Role
20%
10%
14%
56%
Other (please specify)
MKTG and/or BD partner/committee
COO
MNG Partner/Chairman or most senior lawyer
Report to
3%
5%
73%
10%
7%
2%
$40K to $75K
$75K to $100K
$100K to $350K
$350K to $500K
$500K to $750K
$750K to $1MM
Total Compensation
Marketing/BD Dynamics
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MKTG and BD departments remain largely combined and centrally located
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17%
83%
MKTG and BD structurally distinct departments?
Yes No
10%
17%
29%
44%
Fewer than 25% of in any one office
25-50% in one location
Over 50% in one location
Centralized in one location
Location of MKTG and BD personnel
In the past year, MKTG and BD FTEs have increased – this trend should continue for BD
10.5
12.8
12.8
12 months ago
Currently
2015 planned
Marketing FTEs
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8.2
8.9
9.7
12 months ago
Currently
2015 planned
Business Development FTEs
MKTG and BD budgets have increased and will continue to increase in 2015
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2%
5%
2%
2%
10%
7%
3%
46%
44%
44%
36%
34%
24%
32%
32%
8%
20%
19%
31%
Marketing 2013 to 2014
Marketing 2014 to 2015
BD 2013 to 2014
BD 2014 to 2015
Budget changes – past year and planned Decrease 10% or more Decrease <10% Stay the same Increase <10% Increase 10% or more
Concrete BD activities are thought to be the most effective of MKTG and BD alternatives
4%
20%
21%
23%
38%
60%
38%
52%
61%
71%
75%
80%
81%
94%
Advertising
Marketing programs & lead generation
Sponsorships
CRM & data management
Law firm employee training & education
Lawyer visibility
Sales training
Key client teams – program management/implementation
Sales / business development coaching
Client education
Client interviews
Prospective client visits
Relationship building
Existing client visits
% indicate activity is effective (4 or 5 on a 5 point scale)
(n=21 - 56)
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BD Activities
MKTG Activities
MKTG and BD budgets are concentrated on concrete activities
5%
7%
8%
16%
21%
32%
Law firm employee training & education
CRM & data management
Advertising
Marketing programs & lead generation
Sponsorships
Lawyer visibility (individual/practice area
marketing activities)
% of MKTG budget spent on activities – past year
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3%
4%
6%
7%
12%
12%
19%
26%
Sales Training
Client interviews
Key client teams - program management/implementation
Sales/BD Coaching
Prospective Clients visits
Client education (e.g., hosted seminars)
Existing Client visits
Relationship building (lunches, dinner, etc)
% of BD budget spent on activities – past year
•Lawyer visibility, sponsorship, and marketing programs & lead generation account for 69% of marketing budgets
•Relationship building is the most common BD activity • Comparatively, few firms are investing heavily in key client teams
Organizational Support
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BD and MKTG professionals feel that their function is viewed as important by their firms
22%
22%
24%
25%
31%
36%
39%
39%
42%
44%
44%
48%
49%
75%
Finding effective, experienced associates
Developing new expertise
Finding effective first year associates
Developing new services
Ensuring consistent services across locations
Enhancing management practices
Retaining qualified talent to someday succeed current leadership
Leveraging technology investments that have already been made
Recruiting effective partners
Controlling costs
Leveraging technology to ensure efficient firm management
Leveraging technology to ensure efficient practice of law
Hiring of laterals
Improving business development
% indicated important initiative in their firm (9 or 10 on a 10 point scale)
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86%
27%
25%
17%
27%
29%
7%
12%
34%
10%
10%
5%
3%
2%
% Top three initiative
Most perceive that they are supported by the law firm, with the exception of some specific administrative departments
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43%
53%
57%
59%
63%
70%
79%
81%
82%
Recruiting
Human resources
Information technology group
Practice group and department leaders
Library/Knowledge management group
The main lawyer management/executive committee in your firm
Finance
Managing partner/Chairman
Chief Operating Officer
% indicate receive high level of support (4 or 5 on a 5 point scale)
•COO, managing partner/chairman and finance are providing the highest levels of support
•IT, HR, and recruiting provide much less support
Culture / Lawyer Engagement is a major challenge for both BD and MKTG
10%
3%
3%
8%
31%
44%
Other
Planning
Lack of information
Firm business change
Lack of resources (i.e. budget, time, staff)
Culture / Lawyer engagement
Greatest business development challenge
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5%
7%
8%
10%
10%
29%
31%
Other
Communicating brand attributes
Technology
Lack of resources
Building awareness
Culture / lawyer engagement
Differentiation
Greatest marketing challenge
Many things could be done to enable greater effectiveness, with collaboration as the top action item
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12%
46%
47%
49%
56%
68%
Other
Increase staff dedicated to marketing & business development
Improve marketing and business development processes
Increase priority of marketing & business development
Use metrics or a dashboard
Increase collaboration
What other groups in your firm could do to make you more effective?
Almost universally, the MKTG/BD department is involved with BD training and coaching
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5%
48%
48%
Professional Development Department
Business Development/Marketing Department
Both Professional Development and Business Development/Marketing
Those responsible for BD training/coaching and client team training
•About half (53%) of the time the professional development department is involved in some manner
Measurement
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Volume of activity and additional business are how most measure effectiveness of MKTG/BD
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29%
22%
47%
54%
66%
We don't measure it
Other
Number of new clients
Increase in business
Marketing and business development activities (RFPs, etc)
How MKTG/BD effectiveness is measured
•A notable minority do not measure effectiveness at all
Few explicitly measure ROI
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25%
75%
Measure MKTG/BD ROI
Yes No
•A number of different hard and soft measurements are tracked and reported •Assessing number of new assignments directly related to the BD activities Assessment of turnover by office and Practice Groups
•By counting both activity (touch points through events and pitch opportunities) and new business. •Events Client acquisition RFP win rate •Identify KPIs and measure against them (at least quarterly) throughout the year. •Largely from top line revenue growth •Marketing budget in comparison to Revenue Per Partner and overall revenue •Revenue per dollar spent? Goal is 100:1 on our teams 50:1 on our practice groups •Revenues •There is an expectation on lawyers to complete a review of each investment to ensure that planned goals were met. We track new business where possible to marketing activities. We are beginning to track correlations between individual Business Development/ Relationship expenses and file originations.
•Tracking referral bases, tracking engagements •We list target clients build BD initiative around those clients track BD for each target client track sales for each target client •We tie new business generation to the cost for specific marketing and BD activities. •We track the revenue that results from specific activity minus costs.
What they measure?
Most don’t have data analytics, but plan on implementing them in the future
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29%
10%
19%
22%
20%
Does your firm have established data analytics? Yes No, but we plan to create one in the next 6 months No, but we plan to create one in the next year No, but we plan to create one in the next 2 years No, and we have no plans to create one
Client Teams
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Most have or plan to have client teams. Lack of accountability is a challenge to those with client teams
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44%
32%
24%
Firm has client focused teams?
Yes No, but plan to implement No, don't plan to implement
19%
35%
42%
81%
Lack of training
Lack of effective metrics
Lack of leadership
Lack of accountability
Biggest impediments to client team success
(n=26)
Competitive Advantage
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Most firms have defined their sources of competitive advantage
73%
27%
Partners in firm have defined its competitive advantage?
Yes No
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51%
59%
66%
66%
86%
Research competitive firms to determine their relative strengths and weaknesses
Lead discussions on competitive advantage with partners
Define the firm's distinct competitive advantage internally
Advise management on how to develop a sharper competitive advantage
Communicate the firm's distinct competitive advantage externally
Marketing/BD department’s role in defining & communicating competitive advantage
•Marketing and BD departments are mainly charged with communicating their firms’ competitive advantage
•However, they are also often involved in helping define their firms’ competitive advantage
Expertise in a specific area, relationships, and service are primary differentiators
3%
10%
14%
36%
37%
37%
42%
61%
64%
75%
Other
Related services
Technology
Geography
Brand / Prestige
Price
Firm-wide service strategy
Relationship
Practice area specialization
Industry expertise
Methods firm uses to differentiate itself
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% primary differentiators
24%
14%
20%
17%
10%
8%
3%
0%
3%
0%
Industry expertise and service are thought to be key sources of competitive advantage
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Description of firms competitive advantage *
* Competitive advantage is defined as the unique reason(s) why clients choose your firm over competitors.
Conclusion
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Summary
• Planned growth in MKTG/BD staffing and budgets should lead to opportunity
• MKTG/BD professionals feel largely supported by their firms
• However, measurement of MKTG/BD effectiveness remains simplistic
• This leads to perceptions and spending decisions that may not support the most effective activities
• The biggest challenge to effectiveness is firm culture in terms of measurement of effectiveness and collaboration with Marketing
• The law firm perception of competitive advantage is generally simplistic and does not meet the standard criteria: unique, sustainable and valued.
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Actions
• Implement rigorous measurement of activities
• Redirect investment based on measurement
• Have a positive impact on firm culture in relation to MKTG/BD, and identify collaboration opportunities
• Promote a more rigorous review of firm competitive advantage
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