Law firm marketing spend approx half that of other industries
Law firms spend on average less than half the amount on marketing than other industries. This is one of the key findings of a new pan-European survey of senior marketers and business development (BD) managers in leading law firms just published by Hubbard One (part of Thomson Reuters). The survey reveals that legal marketing is a rapidly evolving market and, contrary to some expectations, the results show that marketing and BD budgets held steady (45% of respondents) in 2010-11 – or even increased in many cases (39%) – as boards have recognised that effective marketing is instrumental in the preservation of a firm’s competitive position in the post-recession era.
Hubbard One’s survey reveals that, despite positive news on the state of budgets, marketing spend at law firms as a percentage of turnover remains low when compared with other industries. Over half of respondents (53%) reported that marketing spend (excluding salaries) equated to less than 2% of turnover. And 36% of those surveyed spent between 3-5% of turnover on marketing, whilst only 11% spent more than 6% of turnover. The Chartered Institute of Marketing estimates that average marketing spend (without salaries), as a percentage of turnover across all industries in the UK is 7%.
Other headline findings of the survey include:
· Marketing moves up the value chain. Of the respondents surveyed, 96% believe their marketing team’s contribution to the firm is either “very important” or “fairly important” – indicating the changing perception of marketing and BD within law firms. One respondent stated, “we are now instrumental to business change rather than ‘last to know’”.
· Increasing revenue is the key priority for marketers in 2011. Respondents note the development of sales-focused cultures within firms, and believe the legal sector remains “generally less forward-thinking” than corporate firms when it comes to recognising the value of marketing. Partners regularly struggle with the idea of “selling products”, finding it “too commercial, too much like commodities”.
· Firms intend to increase revenue by nurturing current clients. Improving communication and delivering an enhanced service to key clients are both seen as crucial ways to retain and nurture current clients, and also increase cross-selling. And 94% of respondents consider CRM software to be “very” or “fairly” important, with 36% of firms planning to implement new CRM solutions in 2011.
· Technology is viewed as key to delivering initiatives on time by marketing departments. When asked what benefits technology brought to the table, the majority of respondents cited the ability to increase and measure efficiency, including the opportunity to “spend less time on routine administrative tasks” and “better track return on investment on marketing and BD campaigns” (each selected by more than 60% of respondents).
· Website innovation is at the top of legal marketers’ to-do lists this year. Legal marketing departments will be implementing an average of three to four technological solutions in the coming year, whilst 47% of those surveyed are planning a website re-design. Email remains an important marketing communications tool at law firms, with 45% of respondents saying they intend to implement a new email marketing solution within the next 12 months.
· The jury is still out on social media. Despite over half of those surveyed (55%) planning to implement new social media initiatives in 2011, social media is still not considered to be as important as other technology tools – with around 50% of firms doubting the importance of Twitter and blogs. Facebook was rated the least popular social media channel, while LinkedIn was rated as important by over three-quarters of respondents.
· Mobile technologies, cloud computing and Twitter are set to be the next big technology trends for law firms. Just under 40% of respondents stated that mobile technologies would be the next big trend to affect legal marketing, whilst 21% selected cloud computing. However, none of those interviewed had developed clear strategies in these areas as yet. Despite the survey showing a current lack of importance placed on Twitter, 29% of respondents see Twitter as the next big social media trend, with many believing that Twitter will become more accepted in the future, and that specifically, lawyers will learn to “communicate more succinctly and in layman’s terms”.
A white paper on the findings can be downloaded here www.hubbardone.co.uk/legalmarketing2011 – the survey was conducted in April 2011.