Infighting on Compensation Costs Law Firms Time and Money

Lately I've been spending a substantial amount of time working with law firm leaders on evaluating and redesigning -- yes, substantially rewriting -- partner compensation plans. As with many other categories of the law firm business, for far too long law firms have operated as if practicing law relies on, and generates, human behavior that is not subject to ordinary rewards and incentives found elsewhere. Incentive compensation is an area of significant study in businesses everywhere, yet most law firms have ignored the available research and developed plans that are simultaneously simplistic (focusing on billable hours as the primary objective), complex (requiring significant manual compilation and exhausting negotiations), and ineffective (too few are specifically linked to the firm's strategic plan). I'll be writing much more on this topic in the days ahead as we unwind and reinvent law firm compensation. I'm interested in your views on law firm compensation plans, so feel free to share insights and observations below or connect with me offline. Your insights, whether I agree or not, may be included in future articles. For now, enjoy the recent conversation I had with Lee Pacchia of Mimesis Law WebTV as we discuss how self-generated distractions of poor compensation plans can impair law firm productivity.

 

 

Timothy B. Corcoran is the immediate past President of the Legal Marketing Association and an elected Fellow of the College of Law Practice Management. He delivers keynote presentations, conducts workshops, and advises leaders of law firms, in-house legal departments, and legal service providers on how to profit in a time of great change.  To inquire about his services, contact him at +1.609.557.7311 or at tim@corcoranconsultinggroup.com.

7 Reasons Why Your Law Firm Has Not Yet Found the Right CMO

A number of law firm leaders have expressed concerns to me regarding what they perceive to be a lack of quality and qualified candidates for the most senior law firm marketing positions, such as chief marketing officer or chief business development officer. It's certainly plausible that some candidates who rose to senior-level law firm positions during times of plenty now face a daunting task of adapting to a much more competitive market. Square Peg in a Round HoleBut it's also clear that many law firm leaders have a poor understanding of the kind of marketing support they need, so they are unable to distinguish between suitable and unsuitable candidates. This, added to the poor processes many pursue to find candidates, means that too often we end up with mixed results. In my roles as both a consultant to law firm leaders and as 2014 president of the international Legal Marketing Association, I've captured the following recommendations to improve the process.

Hire to Support the Vision

Law firm growth plans typically lack specific financial targets and a clear market vision. Like a golfer who studies his swing, law firm leaders should strive to be "consciously competent." Why are we successful, what ingredients have led to our success, what factors have changed, what should do more, what should we stop doing? Marketing is about deeply understanding these issues and then marshaling the necessary resources to pursue a well-designed plan.

How can we possibly find the right champion if we don't know where we are, or where we're going? Be honest and clear about your vision and who will best help you pursue that vision. If you need to generate new business, why are you interviewing candidates whose expertise is in promotions and communications rather than in business development? If you struggle to achieve recognition in a crowded market, seek candidates with experience in branding and differentiation rather than coaching.

Enforce the Vision

In many law firms, there is more than one vision. Different practices, and even different offices, have achieved different levels of brand awareness and credibility. It's extraordinarily unlikely that in all markets, for all practices, your firm is perceived the same by all clients. All diverse businesses face this challenge and a good business strategy recognizes and incorporates these variations. However, if your firm has a disaggregated approach, allowing practices and partners to determine and pursue whatever go-to market strategies and tactics suit them, then your marketing leader needs a very different skill set than the firm with a very rigorous, disciplined and consistent approach.

If the executive committee can't reach agreement on a vision and strategy, let alone what skills and competencies are necessary for a senior marketing leader, and if you also allow partners to independently determine what they expect from marketing, understand that you have already limited your new CMO's effectiveness. Law firm leaders need to be clear and consistent in describing the skills and competencies for their most senior marketing leader.

Avoid Too Many Cooks

The hiring process for a chief marketing officer can be onerous, in part because many firms have too many stakeholders participating in the hiring process. Obviously, any senior marketer will need to interact with a large number of colleagues so it's important to see a cross-section of the firm, but it's unrealistic and impractical—even in the smaller firms—to try to assuage everyone's ego by involving them in a process that wastes time.

Firms should employ a rigorous approach to capturing feedback that maps the necessary skills and competencies to the position description, provides appropriate questions to guide the interviewer to examine these credentials, and provides a scoring tool to ensure consistency in feedback.

But Have Enough Cooks

In some firms, the opposite approach prevails and not enough people are involved in the hiring process. A strong leader, or a small group of leaders, pursues the search in isolation, crafting the position description and conducting all interviews, and sharing the results only when a candidate is hired. The trouble with this process is that it can work ... to a point. But by not including enough stakeholders in the process, the new CMO risks having his or her success rise or fall with that leader's political profile, rather than on individual accomplishments.

It's quite common for a new law firm leader to seek a new chief marketing officer, especially one with whom he or she can find the right chemistry. Chemistry is important, of course, but senior marketing leaders, like any senior business professionals, aren't nearly as effective if their authority comes from aligning with a champion than from their credentials and contributions. Law firms benefit when critical business decisions are shared among the senior executives rather than limited to a select few. It's important to strike the right balance of interviewers, both to secure buy-in and to capture robust feedback.

Avoid Perpetuating a Hero Culture

Some law firms pursue growth, any growth whatsoever, by pursuing new clients and cross-selling existing clients, by expanding the practice mix and adding laterals and acquisitions. With such a broad range of growth options, all deemed equally necessary by the stakeholders involved, it's quite challenging to prioritize when allocating insufficient marketing resources, time, and funds. Hiring more people isn't usually the answer, so instead we recruit heroes to swoop in and save the day with a superhuman effort again and again. These people inevitably burn out.

Heroes spend their days shuffling and then re-shuffling the pool of limited resources to ensure that today's crisis is handled while tomorrow's crisis is held at bay. The team is substantially focused on responding to a barrage of incoming requests, some of which are consistent with the strategic plan, some not so much. Too rarely are these heroes allowed to say no.

Hero culture is what many businesses fall into when they lack sustainable business processes. So when hiring a CMO, law firm leaders should ask candidates how they'd measure not just the ROI of marketing investments, but how they'd collaborate with other firm leaders to better understand and re-prioritize all of the firm's investments. If you rely on heroes to get through every day, your business processes are probably broken.

Choose: Profits or Partner Comfort

Hero cultures often gain prominence in organizations that value independence, as there are few incentives to work across boundaries for the good of the organization. In many law firms, partners are given wide latitude to manage their books of business as they see fit. The prevailing outcome, then, no matter what the strategy document contains, is that the highest purpose of the firm and its professionals support staff is to tend to the needs of the partners. This is a terrible business strategy. The best organizations perform well when everyone is focused on the same outcome, and follows a coordinated plan for achieving the same outcome.

If the spoken or unspoken rule in your firm is that the business professionals must respond to every partner demand without question, then you should either change the culture or be sure to hire a CMO who thrives in this environment. If your primary objective for the marketing function is not to improve the firm's financial performance but instead to hire people who won't "rock the boat," then hire accordingly. But you must also own the results. If the law firm leaders fail to lead, those tasked with execution will also fail.

Incorporate Clients

A recent survey of leading marketing professionals from a variety of fields revealed a surprising number of senior law firm marketers who have little interaction with clients, and no formal client feedback program in place. By contrast, marketing professionals from other industries claim to have a deep understanding of their client's business needs, buying approach and buying personas, and regular interaction and visibility with clients.

If client satisfaction matters to your firm—and it should—then recruit a CMO who has deep experience with your clients, or who has a successful methodology for discovering this. If you claim to be client-focused but won't allow the CMO to interact with clients, then stop pretending that client satisfaction matters.

Actions Speak Louder Than Words

The legal marketplace has changed and there are some senior marketers who struggle with these changes, just as there are junior marketers climbing the ranks or entering the legal profession with excellent new ideas. Too, there are well-credentialed newcomers to legal marketing who struggle adapting to the curious law firm culture, and legal marketing veterans who are skilled at getting things done. It's critical to find the right professional to fit your law firm's needs.

The breadth of skills and competencies among marketing professionals is at least as varied as among lawyers. Different skills and competencies suit different firm cultures, market positions and leadership styles. A marketing professional may introduce ideas and concepts and processes that take some getting used to. But if you make the right hiring choice, foster an environment conducive to success, and then measure results, you're going to like the result.

 

Timothy B. Corcoran is the immediate past President of the Legal Marketing Association and an elected Fellow of the College of Law Practice Management. He delivers keynote presentations, conducts workshops, and advises leaders of law firms, in-house legal departments, and legal service providers on how to profit in a time of great change.  To inquire about his services, contact him at +1.609.557.7311 or at tim@corcoranconsultinggroup.com.

 

Note: A version of this article first appeared in the Legal Intelligencer. Reprinted with permission.

Upcoming Workshops on Process Improvement and Project Management in Chicago and Washington, DC

While many visitors enjoy reading my insights into the changing face of the legal profession, others want more in-depth advice, instruction, and counseling.  Luckily, there's an app for that! In my day job as a management consultant, I work on-site with law firms, law departments, and legal service providers to embed and operationalize new ideas and business improvements into their organizations. To provide a glimpse into some of these ideas, my colleagues with the Legal Lean Sigma Institute, Catherine MacDonagh and Amy Hrehovcik, and I routinely offer open-enrollment workshops where we provide hands-on instruction. Please join us if you can at one of our upcoming events, details below. Process Improvement & Project Management White Belt Certification Course

Today's law firm and law department professionals are faced with continued challenges and opportunities to help maximize efficiencies. In reconnecting legal costs to the value received, we must begin with the voice of the client and then devise and employ strategies that deliver what clients want and competitive advantages for themselves. With process improvement (PI) and project management (PM), there are no tradeoffs – no one loses and everyone wins. This combined Legal Lean Sigma® Process Improvement White Belt Certification course will give you proven, disciplined approaches, tools and skills to take your role (and your firm, group, or department) to a new level of excellence and profitability. It is designed to provide an overview of Lean, Six Sigma and the fundamental drivers of project management and the essential elements of a quality project management initiative.

The workshop instructors have experience providing process improvement and project management courses in academia, training to lawyers in law firms and professional staff and law departments in multiple countries, and have implemented PI projects and LPM pilots within numerous law firms. The instructors also have direct experience managing high-stakes projects in both the corporate sector and in law firms. This certification course is experiential and interactive and requires full participation in order to be effective. Participants will leave with an appreciation for how project management, process improvement, law firm profitability and client satisfaction are inextricably linked. Plus, each attendee is eligible to receive a Certification in Legal Lean Sigma and Legal Project Management from the Legal Lean Sigma® Institute.LLSI

These interactive courses include experiential learning, table work, and discussions. We rely on case studies, examples, and success stories from our client law firms and legal departments to illustrate key learning points and to expose you to Six Sigma, Lean, and the principles of project management in context.  While we offer individual courses in Process Improvement and Project Management, we have found that offering both disciplines together more accurately reflects the realities of today's workplace:  A well-designed project plan can be impaired when impacted by inefficient processes; and the benefits of a well-designed process can be lost when combined with other inefficient processes as part of a larger project. Start with process improvement, start with project management - it almost doesn't matter. Sooner or later, you'll need to address both.

In addition to combining PI and PM, we also combine our own experiences: we have experience inside law firms, inside law departments, and as corporate executives managing the law department and hiring outside counsel. Our programs are practical and based on real-world experience. We balance the necessary academic content with the reality that most practitioners want to do it, not just learn about it.

Sample Process Improvement Agenda

  • Demonstration of a process - Time & Billing simulation
  • Key methodologies: Lean and Six Sigma
  • DMAIC: Define, Measure, Analyze, Improve, Control
  • Define Phase exercise - process mapping
  • Getting Started and Structuring for Success

Sample Project Management Agenda

  • Connecting Project Management and Process Improvement
  • Project Management Fundamentals
  • Getting Started - Project Charter exercise
  • Risk Register
  • Getting Started in your organization

 

Washington, DC

Location: Wiley Rein, 1776 K Street NW, Washington, DC

Date: Thursday, October 2, 2014

Register here

 

Chicago, IL

Produced by The Ark Group

Location: Drinker, Biddle & Reath, 191 North Wacker Drive, Suite 3700, Chicago, IL

Date: Thursday, November 6, 2014

Register here

 

Timothy B. Corcoran is the 2014 President of the Legal Marketing Association and an elected Fellow of the College of Law Practice Management. He delivers keynote presentations, conducts workshops, and advises leaders of law firms, in-house legal departments, and legal service providers on how to profit in a time of great change.  To inquire about his services, contact him at +1.609.557.7311 or at tim@corcoranconsultinggroup.com.

Linking Business Development to Partner Compensation

In recent years, as client fee pressure has increased and client loyalty has decreased, law firms are investing significant time and money in business development programs. Some partners receive training to dust off selling skills that were largely unnecessary during a time of plenty. Other partners receive training, then individualized coaching, then more training, then more coaching, in an often-futile attempt to turn everyone into a capable rainmaker. Mathematically, if every equity and income partner generates just a little bit more, this is far more impactful than demanding even more production from our handful of true rainmakers. Trouble is, this rarely works out as planned. There are logistical, financial and psychological barriers to this plan of turning every partner into a rainmaker, and it's time law firm leaders recognized its ineffectiveness, and instead adopt a more productive approach. It's time to touch the third rail of law firm management: partner compensation. Conventional wisdom suggests that law firm partners are motivated by financial incentives, Partner Compensationand therefore many compensation plans are designed to encourage behavior that generates financial success. Conventional wisdom is often wrong. Many compensation plans overemphasize origination and in so doing fail to recognize the critical contributions of many partners. Furthermore, the plans often fail spectacularly in addressing and rewarding origination. But this is a problem that can be solved.

Different Strokes

The first mistake with most law firm compensation plans is the expectation that partners are, or can become, what baseball enthusiasts call "five-tool players." As noted business development coach Mike O'Horo says, "While there are certainly some superstars who are equally adept at a variety of things, the reality is that most players are exceptional at just a few skills." Compensation plans often fall into this trap by expecting numerous exceptional behaviors such as new matter origination, high leverage, high utilization of billable hours, inbound and outbound cross-selling, mentoring of young lawyers, firm or practice group management, pro bono activities, matter profitability, high billing and collection realization, expense management, marketing and business development activities, and more. In reality, successful teams are composed of players with different and complementary skill sets and a good compensation plan should recognize and reward different contributions. In a well-designed plan, partners are able to maximize compensation by maximizing their particular and unique skill sets.

To be clear, generating new business is challenging in any industry. There's a certain tenacity required to doggedly pursue new opportunities, to network and meet new prospective clients, to understand their business challenges, to devise custom solutions to these challenges, and to overcome objections and negotiate prices to win the business. Done well, it involves significant rejection, and significant time—time that quite obviously cannot be billed or recaptured. So, origination should be a key driver of compensation.

But too many plans stop there. First of all, the partner who excels at networking may lack the deep subject-matter expertise necessary to craft a custom legal solution. He or she may lack the financial acumen necessary to devise a creative fee arrangement that both meets the client's budget and generates profits for the firm. And so begins the arduous negotiating process of determining the relative contribution of other partners who helped advance an opportunity to a close. Treating this as a solo effort fails to acknowledge the contributions of others, and relying on the largesse of partners to divvy up their spoils fairly, or even consistently, is a recipe for unrest. This is why most other businesses provide some sort of team compensation when multiple parties are routinely involved in closing a sale. In fact, many companies willingly "double pay" commissions, or, in law firm parlance, award greater than 100 percent origination credit, when it's demonstrated that doing so nets more wins and higher revenue. Companies, and law firms, that do this poorly incentivize the hoarding of opportunities: "I would likely win more engagements if I collaborated with others, but it's not in my economic self-interest to do so, so I'll act alone."

And let's not overdo origination credit. Too many plans treat origination of a single matter as a perpetual annuity, crowding out any incentive to cross-sell, or for older partners to transition key client relationships to up-and-coming younger partners. Other plans allow partners to stake a claim on all future business from clients they initially generate, whether or not that partner is ever again involved in winning another engagement.

Most businesses recognize that "hunters" are best deployed at hunting, whereas "farming" involves cultivating relationships to yield more results over time. Generating new business from existing clients is far more likely to involve other lawyers, particularly those billing time to a matter. There is a clear link between the quality of the work product and client retention, but the definition of quality has evolved to include the manner in which the legal services are delivered, not merely the outcome, and certainly not merely the cost. A partner could put forth significant effort to win a matter, and then poor communication, poor budgeting and poor project management can impair the client's satisfaction, even when the matter's outcome is favorable. Accordingly, retention is a common factor in corporate compensation plans but is glaringly missing from most law firm partner compensation plans. The short-term thinking that leads law firm leaders to view business in one-year increments, tidying up financials at year-end and distributing profits to shareholders, creates the illusion that financial performance can be effectively measured one matter at a time rather than by measuring a myriad of variables over an extended period.

Retention is a powerful financial driver. Incorporating a retention incentive moves client satisfaction from a subjective aspiration to a concrete goal. A focus on retention solidifies client relationships and insulates the firm from the potential financial devastation caused by lateral departures. Retention incentives recognize multiple contributors, from those who generate the work, to those who deliver the work, to those who manage the relationship. Retention is also a significant factor in measuring profitability. In a typical law firm compensation scheme, a matter that earns premium fees and generates significant hours may produce significant revenue and therefore significant compensation to the originating partners and/or billing timekeepers even as it generates minimal profits. However, a matter that is priced strategically, thereby lowering the cost of sales, that maximizes leverage by pushing the work down to the lowest-cost resource capable of delivering quality work product, that generates high client satisfaction and therefore repeat work across numerous practice areas, and that results in significantly higher profits, might generate minimal financial rewards for the partners involved. Profit cannot be fully measured in the short term, and retention is a key factor in measuring profitability over the long term.

Change Management

A successful compensation plan meets three primary requirements:

  • It furthers the firm's strategic objectives
  • It's easy to understand and therefore helps manage partner expectations
  • It's easy to administer

It's a rare law firm compensation plan that meets these requirements.

In many cases, law firms have no strategic objectives beyond growth, or perhaps profitable growth. There is no stated retention target, or cross-selling target, or a bottom-up financial forecast reflecting the realistic growth trajectory of each practice and sub-practice and the timekeepers associated with each. Vaguely aspiring to "grow the business" year-in and year-out isn't a strategy so much as an aspiration. When law firms delineate specific objectives, the actions required to achieve the objectives become more obvious. And just as importantly, the actions inconsistent with achieving the objectives become more obvious.

A compensation plan that is readily understood and clearly defines which actions will generate what income is much more effective and less distracting than a vague plan that places a premium on origination or billing credit, and then incorporates a mystical subjective analysis to address all other behaviors and outcomes. Despite the many shortcomings of today's plans, there are two primary reasons partners resist change: it may be a terrible plan, but they've grown comfortable with it and change begets uncertainty; and everyone fears that a new formula will lead to decreased compensation.

It is true that new formulas will lead to changed compensation for some. But that partner whose compensation varies significantly from year to year is likely to embrace more certainty, even if the new target is lower than an earlier high point. The partner who dreads networking on the cocktail circuit but does it out of a sense of obligation might serve everyone's needs better if she participated in—and helps win—far more pitches at her colleagues' invitation than trying to drum up a new matter or two on her own. And the rainmakers today will remain the rainmakers tomorrow, and are more adept than most at adjusting their selling parameters to incorporate new compensation measures. And, yes, there may be a partner here or there who's found a way to game the system—hoarding origination credit, minimizing leverage, keeping key clients close to the vest, periodically threatening to leave—who will refuse to change, and for good reason. Under a more effective plan, these behaviors will be recognized for the profit-dilutive actions they are, and a partner adhering to such models will need to accept that doing so comes at a price.

Designing the new compensation scheme is only half the battle. As great a challenge as it is to define a firm's strategic objectives and design incentives that drive and reward behavior consistent with these objectives, it's just as challenging to migrate from where we are today. This is why compensation plan changes need to take place over time, in phases. An abrupt shift, even to a plan that everyone agrees has the potential to be more effective, can be just as disruptive and distracting as a poorly designed plan. Rolling out a new plan has as much to do with strategic planning and financial analysis as it does with organizational psychology. Success comes from staging changes in increments, accompanied by detailed financial analysis and a comprehensive communication plan.

Law firm partners want to be rewarded for their efforts, they want certainty in a time of great unrest. Law firm leaders want profitable growth. Clients want quality legal services at market rates delivered in innovative new ways. We can't afford to wait until all of this takes place and then design new compensation plans. By designing the compensation plans first, we can design the future we want and need.

 

Timothy B. Corcoran is the 2014 President of the Legal Marketing Association and an elected Fellow of the College of Law Practice Management. He delivers keynote presentations, conducts workshops, and advises leaders of law firms, in-house legal departments, and legal service providers on how to profit in a time of great change.  To inquire about his services, contact him at +1.609.557.7311 or at tim@corcoranconsultinggroup.com.

 

A version of this article first appeared in The Legal Intelligencer, an ALM publication, and is reprinted with permission.

Demystifiying Law Firm Marketing, Part 1: What is it?

In my consulting practice I work with many sophisticated lawyers and experienced businesspeople. I also work with professionals, lawyers and businesspeople alike, who are exposed for the first time to new disciplines outside their comfort zone -- marketing, finance, pricing, project management, process improvement, and so on. Increasingly I've faced a number of questions on topics that some would argue have been long-settled.  But one refreshing and challenging aspect of the dynamic legal marketplace is that there is a constant learning curve - and not everyone on that path is a fresh-faced graduate. So this series will address law firm marketing - what is it, how to do it, who should do it, how to hire and compensate marketing professionals, how to measure success, and much more. Readers with deep experience are welcome to offer insights or alternative views in the comments. Readers on the learning curve are invited to ask questions, in the comments or privately, to be addressed in future articles.  

Recently I had lunch with a recruiter who specializes in placing senior marketing officers in prominent law firms. We had a wide-ranging discussion about the evolution of the law firm marketing function, the refreshing influx of new talent, the growth of pricing as a discipline, and much more.

Dilbert on Marketing

When I asked him how this new climate had impacted the way he conducts searches, his disappointing reply was, “Not much at all.”  He went on to add, “I often have a progressive discussion like this at the start of a new assignment, but too often what the partners demand, and what the law firm leaders settle on, are safe choices.” He explained that while some law firm leaders seek an innovative marketer to help drive the firm’s efforts, the partners by and large want someone who’s worked at several law firms, who will “keep the trains running on time,” and who won’t offend partners by creating distractions to their demanding billable hour focus.  Oh how far we have… not… come!

Refreshingly, I work with more than a few law firms whose marketing function is by any measure progressive, innovative, comprehensive, and grounded in financials and analytics. But there are far fewer of these examplars than the size of the legal market would otherwise suggest. Why is this? Why do so many law firms, and law firm partners, continue to struggle with understanding the role and impact of professional marketing? Why, when faced with declining financial fortunes, or at least the clear and unambiguous risk of increased competition and price pressure, do law firm leaders double down on what they’ve always done rather than seek new ways of doing business? The answer is nuanced, but at its core I suggest it boils down to this: lawyers don’t understand what marketing is, and they don’t understand the skills necessary to do it well.

When I advise law firms on improving the Marketing function, I find it helpful to start first by defining terms. We can quibble over the textbook definitions, but the practical reality is that there is a difference between marketing and business development, and each of these is distinct from activities in which some law firms engage that might best be characterized as “community involvement.” Let’s break these down.

Marketing

Marketing is about creating visibility and awareness of the firm’s and the lawyers’ credentials and capabilities, with the ultimate objective to be included in the “consideration set” when a prospective client needs outside counsel to address a business issue. And while law firms have produced a lot of marketing activity over time, some of it – and depending on your perspective, perhaps much of it – hasn’t been all that helpful in generating leads or winning work, even if it has won awards for creativity. This isn’t necessarily the fault of the chosen marketing tactics. It may very well be that the firm directed its marketing message to the wrong audience, or invested in tactics that didn’t expose the firm to potential buyers. This tends happens when the profession believes that “all revenue is good revenue” and “first let’s win the work and then we’ll figure out how to do the work.” How do you know who to target, and what to say, and how to say it, and who you’re competing with?

Business Development

Business Development is about advancing an opportunity from “who should we talk to?” to “we may be able to help” to “and here’s how we’ll do it” to winning the work and generating fees from a new matter. And unlike traditional marketing, much of which can be delegated to competent professionals to address, business development relies heavily on direct lawyer involvement and not solely on the shoulders of experienced BD professionals. After all, Business Development is essentially sales. This means identifying which clients or industries to pursue, being clear about what problems we solve, understanding a potential client’s needs, establishing alternatives for addressing the needs, quantifying the impact of proposed solutions, and quantifying the costs and risks of doing nothing. Some of this is handled by lawyers; some of this can be addressed by BD professionals. But none of it happens without a plan. Or at least it’s not typically very effective without a plan. Yet few law firms, and even fewer individual partners, have a well-designed and thoughtful plan for growing their practice.

Instead, some law firms invest time and energy into programs that are, at best, tangentially helpful to exposing the brand to potential buyers. These “random acts of marketing” sometimes work, and sometimes the prospective client hires a lawyer in spite of ineffective marketing tactics. And this reinforces poor behavior. To be clear, it’s not the tactic itself that may be wanting. It’s not knowing whether the tactic is effective or not.  What works for one may not work for another; there is no universal “best practices” and certainly little to be gained by parroting what other firms in dissimilar markets with dissimilar practices and with dissimilar clients do to market their services. For some firms, purchasing a luxury suite at a sports arena is a well-designed tactic used effectively to foster new relationships or cement existing ones. For others, it’s an expensive investment in the wrong audience. Some lawyers will sit on charity boards and access a network of like-minded professionals; others donate time to an endeavor that has a one in a million chance of exposing the firm to qualified potential buyers. Some partners participate in practice-specific bar meetings, interacting with rivals who are unlikely to refer business. Yet other partners may derive great benefits from referrals from other members of the Bar, even from rivals facing a conflict. If you aren’t measuring the impact of your marketing and business development, how do you know if it’s working?

Many firms confuse volume with effectiveness. So filling a large hotel ballroom for a seminar on some new regulatory changes has better optics than a hosting a handful of clients in a small, corner conference room in the firm, even when the small room consists of senior decision makers and the large room is filled with juniors. Or a newsletter pushed to 10,000 names on our mailing list with only a 5% bounce rate is considered more successful than a blog post with only a few hundred views, irrespective of which approach provokes an inquiry to the lawyer who authored the piece. Securing a lucrative and expensive sponsorship at a notable client industry black tie dinner is deemed a coup, until none of the partners confirmed to attend actually show up and the firm’s table sits empty and forlorn.

Community Involvement

Many firms confuse community involvement with marketing. There’s nothing wrong with sponsoring a local charity’s 5k race, but the partner who participates in the run, whose clients are primarily sovereign wealth fund bankers based overseas, shouldn’t consider this as an effective business development tactic for his practice. Law firms should invest in their communities, and there’s a certain amount of brand building that is expected. But at a certain point, we have to shift from general awareness to specific targeting, specific messages, specific solutions, and specific tactics. And we must measure, analyze, and adjust to stay on top of new developments.

The overriding challenge is to first understand the fundamental differences between marketing, business development, and community involvement.  After that we’re in a better position to hire the right professionals with the right experience who can advise, plan, and help execute the firm’s marketing and business development plan. The partners must hold themselves accountable to pursuing the plan and not sitting back and hoping others grow the firm. And we must all measure the effectiveness of our actions, and adjust our approach as needed.

 

Timothy B. Corcoran is the 2014 President of the Legal Marketing Association and an elected Fellow of the College of Law Practice Management. He delivers keynote presentations, conducts workshops, and advises leaders of law firms, in-house legal departments, and legal service providers on how to profit in a time of great change.  To inquire about his services, contact him at +1.609.557.7311 or at tim@corcoranconsultinggroup.com.