1/3 of Law Firms Up Their Marketing and BD Spending

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33% of law firms are increasing their Marketing and Business Development (MBD) budgets. This is 3 times more firms than last year—making this the largest number of firms increasing their MBD spending in 9 years. This increased investment in MBD may just give these firms an unprecedented edge in 2019.

New money means new programs or beefing up old ones. These CMOs put the following programs at the top of their to-do list:

  • Client feedback

  • Client service

  • Industry programs

On average, these lucky CMOs will have 5.13% more to invest in MBD than they did in 2018.

Which Firms Will Be at a Disadvantage?

Fully 64% of law firms are keeping their budgets the same as last year—again, as measured by percent of revenue. Firms experiencing bottom-line growth will throw more actual dollars at MBD, but not as much as the firms increasing the percent of revenue committed to MBD. The firms with no growth will be facing the same budgets as last year.

Small Increases Go a Long Way

Overall, the typical law firm (the largest 500 firms) are targeting 2.76% of their revenue for marketing and business development in 2019—up from 2.63% this year. The Am Law 100 is targeting 2.67% of revenue, while the Am Law 101-200 targets 2.71%. Law firms outside the Am Law 200 are planning to spend 2.86% of their revenue on MBD. The differences are woefully small to sound meaningful—but, can be the difference between 1 and 5 full time BD equivalents, funding a new client team, or creating one more industry group. All of which are proven to drive new business.

Why Increased Budgets Will Bring the Biggest Returns Ever

Clients are moving a giant chunk of their legal budget back to outside counsel for the second year in a row in Litigation—we will see the same increases across most legal spending when we release our BTI Practice Outlook 2019 next week. This increase in spending is a gift. The law firms able to capture this new spending put themselves in a position to reap the benefits for years.

In addition to increasing their spending, clients are making big decisions about which law firms to use and how to reduce their rosters. This means much more business for the law firms able to snag a spot on clients’ shrinking roster of legal providers. The amount of new client spending dwarfs the increases firms are making to their MBD budgets—making a compelling argument to boost those MBD budgets for 2019. One-third of law firms have already figured this out.

There’s still time to rethink your firm’s budget.

MBR

*Based on in-depth interviews BTI conducted with more than 136 law firm marketing leaders between July 13, 2018 and November 5, 2018.

 

 

 

7 Questions to Ask Every Client Before August 15

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Let’s play word association.

I say: “July or August

You say: “Vacations, people out, summertime” 

Top legal officers say: “Next year’s budgets, end of year results, and adjust for the 2nd half of the year”

Large clients are thinking about next year’s budget right now. Many have submitted their first drafts to management. Your clients are learning how their company’s 4th quarter will play out—and any changes in plans/priorities which may result. They are integrating the unplanned events which popped up earlier this year while predicting surprises yet to come. All in addition to their day jobs.

This is your chance.

Engage your clients by asking questions and providing answers. Offer perspective on the budget trends you see at other clients—are they flat, headed up, or headed down? These insights are valued and hard to come by. Clients use your insight to manage their management and their budgets. Here are the questions we find most effective: 

1.       When do you submit your 2019 budget?
2.       Are you working on your 2019 budget? (If already submitted—how was it received, do you need to make any changes?)
3.       How is your budget performance looking for this year?
4.       What were the big surprises this year?
5.       What do you think they will be next year?  
6.       Are there any changes in management pressures or goals for the second half of the year?
7.       What can I do to help you meet your year-end goal?  

And maybe don’t ask the last question—act instead. Offer the following:

-        Help triage priorities for the year
-        A 2nd-year associate to help with leg work
-        Perspective on changes your clients are making to headcount, AFAs, technology, and training

The really bold can offer up some fixed fees for specified portions of your client’s caseload or work in the new year.

Summer is one of the best times to start locking in future work and help where clients need it now.

MBR