CMOs Stress Levels Surge

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CMO Stress Levels Surge

Business is good. The best it’s been in recent memory. So, what’s the worry?

2019 marks the first time a large number of CMOs tell us the external factors are just as stressful as the internal issues. These law firm marketing leaders see outside threats and opportunities as being equal to the challenges within their firms.

My 30 years’ experience shows strategic changes are afoot when external and internal issues equalize. Let’s start with the newest and fastest growing stressors:

The Stress of the Future Soars

Perceived threats from The Big 4 moving into law (EY, PwC), legal technology, AI, and retaining clients caused an 8-fold increase in worries about the future. In fact, the future has become the top stressor. 24% of CMOs, up from only 3% last year, say the stress comes from their law firms’ apparent lack of concern about these issues. These CMOs don’t see a plan or anyone working on a plan with any sense of urgency. They see clear and exposed threats, and feel as if they, alone, are concerned about these issues.

CMO Workload

Just over 23% of law firm CMOs say workload is growing faster than their staff can scale. This is up from 20% last year. It seems business growth is driving new demands and needs—causing clients to hire new law firms. This brings more RFPs—especially in the Am Law 100. And, almost all law firms are changing their approach to marketing. The added coaching, staff training, and planning for new strategies are additive to the everyday job responsibilities for a CMO—pushing stress levels higher.

And Those Empty CMO Slots Are Causing Undue Stress

A number of high-profile law firms are operating without CMOs, Kirkland and Debevoise to name a couple. While it doesn’t impact current CMOs directly, it raises the open question of the need for CMOs in law firms. This is causing stress as it strikes at the existential need for such a role.

Some law firms like to give the impression they don’t have a CMO, but somebody is running the Marketing and BD show. These firms attract some good press and in an odd twist, attract a large number of good CMO candidates who want roles at firms with empty slots. Expect these roles to be filled—and a few more to open up.

Show Them the Money

15% of CMOs feel serious pressure to show their value. These CMOs are often forced to rely on murky metrics and face partners who take credit for any marketing wins. An over-focus on results leads to demoralization, stress, and burnout. It also prevents strategic thinking. Not good for these CMOs or their firms.

Not Worrying Causes CMOs to Worry

Complacency is the leading cause of sleepless nights for 20% of CMOs. They see lack of urgency spreading as their firms enjoy increases in business. Profits are strong, so there is little motivation to make things better. These CMOs tell us their firms believe strong profits cure all ills and prevent future problems—or at least underpin a lack of concern for future problems. 

CMOs give advice on how to deal with stress and pursue opportunity here. It’s worth another read and helps put things into context. And as any stress management teacher will tell you, stress is a sign you recognize something has to change—and can be helpful to our firms and ourselves when managed well. It’s not always easy to frame it this way—but it helps to remember.

MBR

Based on our survey of more than 160 marketing leaders, conducted between November 2018 and June 2019.

Only 7 Things Drive Law Firm CMOs Crazy

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CMOs are quick to point out how the attorneys are the best part of the job. But, some attorneys do a good job of driving them absolutely crazy.

4 of the 7 sources of CMO frustration start with attorneys—a small number of attorneys, but attorneys none the less. Attorneys don’t have an exclusive on driving CMOs to the brink—daily life and strategic issues play their role too.

Let’s talk about the attorneys first.

4 types of attorneys are driving CMOs crazy. They break down into the following groups:

Marketing and Business Development Skeptics

About 10% of attorneys are true Marketing and Business Development (MBD) skeptics. These attorneys don’t see how CMOs can help them—and show no interest in learning. Some are loud and vocal, and openly question your plans and attempts to help. Other MBD skeptics question CMOs in private because they are in the clear minority—but take up too much air time in the CMO world—and drive them crazy.

The Apathetic

Worse than MBD skeptics, these attorneys just don’t care about MBD initiatives. They go along as if the MBD department isn’t there. They interact only when they absolutely have to—and sometimes even then they ask not to be included.

The Jerks

They still exist—and do a great job of driving CMOs crazy. The jerks bring unpleasant, and sometimes nasty comments. They are more troublesome than the 2 groups above because they are loud, active, and go out of their way to share their thinking. The best CMOs learn to let this water run off their back and move on. Fortunately, the number of jerks has decreased to less than 5% of all partners, but their impact is much larger than their footprint suggests.

Distracted Attorneys

Attorneys can have short attention spans. But the distracted attorneys bring new meaning. These often well-meaning attorneys, move from one topic to another with lightening speed. They don’t stay in place long enough to get any traction—and they request individualized help to support their ongoing stream of ideas.

Moving away from attorneys, CMOs point to the following 3 issues as driving them crazy:

Directories and Rankings

The workload and high attorney demand drive CMOs crazy. Attorneys bring a high emotional investment in making the rankings—but most of the workload falls squarely in MBD department. This can be a double whammy because a small but measurable number of the attorneys not making the rankings become jerks and skeptics.

No Strategy

These CMOs are working hard but are not sure where they are going. They see no sign of a firm strategy or vision. This not only dilutes the CMOs’ efforts but takes away guiding light. These CMOs are among the few who have a bird’s eye seat to multiple strategies and wasted resources. These same CMOs see the power of using the resources for a limited number of strategically coordinated initiatives.

Workload

Think of it as a form of job security. Demand exceeds marketing supply. CMOs face a continuing stream of RFPs before adding in all the daily tasks of running the department—mentoring, partner requests, events, web updates, PR, special projects, and a string of strategic initiatives like client teams, client feedback, and industry teams. Simply put, the CMO cup runneth over.

BTI’’s exclusive research shows the largest firms (think Am Law 30) are adding staff, as are the Am Law 31 to 100, and the Am Law second 100. This is not enough staff to fuel the demand. But the resource-short departments learn to prioritize and manage expectations to deliver what their firms need and expect.

The Good News

Successful CMOs know how to successfully navigate these frustrations—and they would do it all again. They know what experience counts and what’s worth caring about. As we discussed a few weeks ago, the most successful CMOs also shared 7 lessons they learned to make sure they don’t let their responsibilities or people they deal with drive them crazy. You can’t read this advice too many times.

MBR

98% of CMOs Would Do It All Again

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Successful CMOs know how to navigate the people and culture of their firm. They know what experience counts and what’s worth caring about. The most successful CMOs have 7 lessons they wish they had known earlier. 

What Advice Would You Give Yourself When You Were Just Starting Out?
We asked more than 150 law firm marketing leaders this very question. The messages are pretty compelling:

  1. Don’t take it personally. Everyone questions new ideas. The questioners are not attacking you, they are trying to get their head around your ideas. Their approach may be hard and gruff, and they may not be believers—but it comes with the territory.

  2. Persistence. Don’t give up the ship. People won’t really understand what you are saying until they hear it 7 times. This means the initial resistance and indifference are part of the process. Very few ideas get off the ground without at least 7 clear messaging events to the right audience(s).

  3. Adapt. Learn from all the feedback you get. Rejection, resistance, and lack of enthusiasm all tell you the message or approach you are proposing may not be on target. Change your approach to play to the issues and concerns you hear.

  4.  Don’t make the job bigger than you. Don’t care more about the job than the firm cares. There will always be a few law firms who fundamentally don’t respect or care about the marketing and business development function. These law firm marketing leaders advise a new CMO to jump ship and go to a place where marketing and business development is an accepted part of the firm.

  5.  Really get to know the attorneys. Attorneys have their priorities and preferences. Marketing leaders recommend taking the time to understand these people and their personalities. You are there to make the firm and the attorneys more successful. Your knowledge of the attorneys’ personas, and how they conduct business, helps you develop your roadmap—and helps you make sure you get to know the partners most likely to make you successful.

  6.  Dial down the website. New websites are a visible success—but they take time. And, attorneys have many opinions about the website. In retrospect, these CMOs would have taken on the task, but given it a lower profile and spent more time with leadership talking about business development than web pages.

  7.  Do It! Only 2% of law firm marketing leaders tell aspiring CMOs to go elsewhere with their careers. In short, CMOs like being CMOs.

Hindsight is a wonderful thing. Advice for the new may also apply to the most seasoned CMOs. Let’s all keep learning and getting better. Use these insights as a start.

Any lessons we left out? Let us know. mrynowecer@bticonsulting.com

MBR

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.

 

 

 

Complacency Epidemic Hits Law Firms as Growth Returns

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Wishes do come true. Legal spending is up. The existential crisis is over. And, urgency is retreating as success is just a little easier to come by. One year of renewed growth is bringing complacency back to law firms.

Complacency Makes a Comeback

Complacency now stands as the number-one source of insomnia for law firm CMOs, at 24.9%*. This rate rivals 2005 complacency levels when demand started to exceed supply. The current number of complacent law firms has virtually doubled last year when it was 13.6%.  

These CMOs at complacent law firms see their firms happy about their new-found wealth but are unhappy and deeply concerned about their firm’s lack of action to make sure growth continues—or in some cases—returns.

The worry comes from 3 main complacency related threats:

          1. Prey for Aggressive Firms

The most aggressive firms are scooping up new business from complacent firm clients: Latham; Kirkland; Paul, Weiss; Greenberg Traurig; Quinn Emanuel; Dechert; Jones Day, and the rest of the BTI Business Development Badasses, who all are making big moves to carve out new business and not just ride the wave.

2. Failure to Engage

Most partners in the complacent firms have no real interest in client teams, client development, industry groups or other proven programs to build, strengthen, and keep client relationships. They don’t show up for training, don’t consult with the CMO on pitches except to make the PowerPoint, and otherwise keep their distance from marketing and business development.

3. No Strategy

These sleepless CMOs say their complacent firm has no strategy and doesn’t want one. The firms don’t engage in planning beyond the budget. Partners are largely left to define their plans with little specificity about how. They have no defensive strategy (keeping rainmakers, keeping clients) or offensive strategies (grow clients, target new clients).

Complacent firms are likely to be victims of both market changes and the more aggressive firms who are on the prowl for clients—and laterals.

By Contrast, Other CMOs Less Stressed than Last Year

Last year, almost half of all CMOs were on the road to burn out. Thankfully, this number is shrinking.

CMOs losing sleep over getting all the work done shrank to 20.69% from 25.3% last year. At the same time, more CMOs stay up worrying about performance—at 18.82% from 14.9%—suggesting a shift to more strategic initiatives.

Urgency Retreats While Success Creeps Back into the Market

Relentless and aggressive firms are using new demand to expand business with current clients and grab new ones. They are also spending more than ever on these efforts. All law firms, complacent or not, are off the aggressive firms – whether they want to or not.

Complacency just makes it easier for everyone else.

MBR

*Based on in-depth interviews BTI conducted with more than 160 law firm marketing leaders between September 2016 and May of 2017.