Increase Marketing Department Credibility: Focus on Marketing Metrics

By Deborah McMurray
Published in Strategies: The Journal of Legal Marketing

It’s a perfect time to focus your firm’s strategy and its spending. Law firms from coast to coast are reacting to their clients’ business losses, stock price tailspins and employee lay-offs by engaging in one or more of the following: hiring freezes, across-the-board-cost-cutting, lawyer and staff lay-offs and delaying or canceling growth plans.

Boom times always create organizational fat. It’s predictable that firms who arguably over-hired and spent with little or no controls or purpose would feel the downturn’s sting sooner than their more conservative competitors. The same firms that engaged in conscience-free spending in the last five years are the same ones that, in lean times, support wholesale cost-cutting. Neither makes sense for the long-term health and growth of your law firm.

Take ego out of the equation

Ego drives most of the ineffective law firm spending. In a popular business book by Robert Kriegel and David Brandt, “Sacred Cows Make the Best Burgers”, the authors focus on developing change-ready people and organizations. Chapter 16, entitled “Cow Hunting,” discusses the sacred cows that roam hallways, offices and conference rooms in corporate America. Law firm sacred cows also lurk in the minds of lawyers, long-time staff and inside every stick of furniture in the offices.

Marketing directors, marketing partners and managing partners can start addressing the ego issue by going cow hunting. The most vulnerable “cows” might be ones that are near and dear to your law firm’s leadership – club dues, a Guinness Book record-length listing in Martindale-Hubbell, the luxury suites at ballgames, client nights’ out at The Palm, the business development “allowances” each partner receives.

Ego almost never supports law firm strategy

If your firm has a strategic plan, chances are it isn’t tied to the individual egos of lawyers. (If it is - change it. Now.) If your firm hired a strategic planning consultant to assist you in the planning process, it is likely that the consultant pushed the planning committee to focus the firm’s time, money and talent on the firm’s clients and the institutional health and growth of the firm. During good times and bad, let your strategic plan drive the investments your firm makes in marketing. If your strategy is focused, your spending can be focused. While your direction may need adjustment during an economic or industry downturn, if it’s well conceived, it shouldn’t need a complete overhaul.

Marketing budgets in 2002

According to an October 2001 online survey conducted by Jaffe Associates and sent to more than 600 potential respondents, law firm marketers are “bearish” about the future of their marketing budgets. When asked about the short-term future of their marketing budgets, the majority of those responding believe that their budgets will be cut, many said their budgets already have been cut and some believe that their budgets will be eliminated entirely. “Image advertising,” according to the survey, is likely to be the target of the biggest cuts, with Web sites and brochures being safe. When asked if their organizations are looking at the downturn as an opportunity to increase marketing efforts and capitalize on vulnerable markets, only a handful of the respondents answered in the affirmative.

This is short-sighted at best. If a firm’s strategic plans include a firm vision that is clear, elevating and rings true to its internal and external audiences, every marketing dollar should support the goals detailed in these plans. Cut the marketing spending that doesn’t support the defined goals, but increase your investment in areas that get you closer to your aspirations.

Cutting spending “across-the-board” or “by percentages” is arbitrary, reactionary and death to a thoughtful strategic vision. Stick to the plans you’ve spent good money to create. If you don’t have a firm strategic plan, invest in one.

Couch Money®

Couch Money® is terminology for the money your firm is squandering. It’s a combination of sacred cow spending and the money lost in your firm’s couch cushions that isn’t giving you any return on your investment. The key to Couch Money® cost recovery is tying your firm’s spending to its strategy and NOT spending on things that don’t directly support the firm’s strategic plan, vision and mission. This makes your investment and your ROI measurable.

The purpose of this analysis is not to reduce spending, although this frequently is a by-product. The motivation is to identify spending that isn’t tied to investing in your firm’s future, free up that money and reallocate it more strategically.

The following is a list of typical budgetary Couch Money targets:

  • Charitable and civic
  • Client gifts
  • Club dues
  • Consultants
  • Directories
  • Individual lawyer spending accounts
  • Law firm networks
  • Lawyer business development travel
  • Library
  • Meals and entertainment
  • Multiple vendors in the same category – PR agencies, graphic designers, printers
  • One-off advertisements
  • Printing
  • Sponsorships
  • Staff overtime
  • Tickets and suites

The objective isn’t to eliminate all of these things (just most of them; or at least to significantly reduce them). Rather, the objective is to analyze how each expenditure is supporting firm strategy. Using individual lawyer spending accounts as an example, firms with 200 or more lawyers can lose as much as $1 million per year in ineffective, untrackable “marketing” expenditures. It’s lost because there is no responsibility or accountability for how the money is spent. Eliminate these “ego accounts” and add a portion or all this money to the marketing budget so the funds can be better managed and allocated to support institutional goals.

Focus on Marketing Metrics

In order for a marketing director to be an integral asset to the law firm, s/he must have access to the same information as the other firm leaders:

  • gross revenues by firm, practice area, office and client
  • profitability by practice area, office, lawyer and client
  • profit goals by firm and office
  • revenue growth goals by firm, practice area, office and client
  • firm merger and acquisition targets and how their data compares and contrasts with your firm numbers.

If your firm does not regularly track this information, it needs to start. Even for those law firms that do track it, very few effectively use it as a foundation for business planning.

If an analysis highlights that your insurance defense or mezzanine finance practice is “unprofitable,” no matter the level of revenue, are you prepared as a law firm leader to, at the least, stop investing in those practices and preferably, divest those practices and clients? When such action is recommended, a common comeback is, “These practices are good training for young lawyers. They get a lot of trial and client experience.”

Perhaps. But, what’s the cost of this education to the firm year after year? Aren’t there better and cheaper ways to educate your associates than training them to work with clients that consistently hammer on fees, are confrontational and view them and your firm as a fungible commodity?

For instance, many law firms with an insurance defense history have 20+ year partners who dedicate the majority of their time to this practice – because this is the business they have. These clients are paying them $150-175 per hour at the upper end. First year associates in major-market law firms start billing at $125-130 per hour. Now calculate the senior partners’ job satisfaction and the cost to your law firm of maintaining this practice for training purposes.

Your marketing leadership should be involved in analyzing these numbers and developing plans to (a) reduce/divest unprofitable or shrinking practices; (b) help lawyers retool to fit in other parts of the firm; (c) communicate with clients about the shift in practice focus; and (d) seek new markets and clients that better support firm strategy.

More Marketing Math – Track Track Track

Most law firm marketers inherit major categories of expenses that they can’t control. Business development travel and meals/entertainment are two of the largest pots of spending in the law firm. Tracking the effectiveness of these expenditures is next to impossible – any evidence of success is anecdotal at best. One way of tracking the spending after the fact is to work with your accounting department to create monthly reports that detail the following:

Lawyer & Practice Area Client Company Person(s) Entertained Business Discussed Date Dollar Amount

The marketing director can flag over- and under-spending on individuals and companies, compare the spending to client revenues (the cost of getting and keeping the client v. the benefit to the firm), know how much is spent on the firm’s top 25 clients (and how much isn’t) and know how the spending by a practice group’s lawyers supports that group’s strategic marketing plan.

A way to ensure that these pots of money are used more effectively is to create policies that support the appropriate spending behaviors in your lawyers. A team approach works best in establishing and enforcing these policies, with the marketing partner, marketing director and section heads ensuring that the money spent is, in fact, moving the firm closer to its best clients and its goals.

Call to action

Study the data you are collecting and know how and where your marketing dollars are directed. Do it now – do it often. Is your spending focused? Cost cutting alone will never increase your firm’s revenue, nor will it dramatically improve your bottom-line over the long-term. However, finding the “lost” money that isn’t being wisely invested and reallocating it to more strategic marketing programs will increase your firm’s revenue and profits year after year after year.

Deborah McMurray is a strategic marketing consultant to the legal industry. She can be reached at 214.351.9690 or


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