The Evolution of Marketing and Business Development Departments to Meet New Challenges: p p gA Hildebrandt Institute Survey

S C SSilvia L. Coulter, MPSLisa H. Rohrer, PhD

Sponsored by:

MPF 2012: New approaches to meeting changing demands

Today’s Agenda• The economic context

• The law firm response– Competitive advantage– Marketing headcounts and budgets– Organization structure and roles and responsibilities

Th l f i l di• The role of social media

• Measuring effectiveness

• Challenges facing marketing and BD senior managers

THE ECONOMIC CONTEXT

P M it E i I d (PMI)Peer Monitor Economic Index (PMI)

80

Q3 PMI Score: 56

70

75

80

C dit C i i

55

60

65 Credit Crisis

40

45

50

30

35

40

Q1 Q2 Q3 Q4 Q1 Q2 Q3 Q4 Q1 Q2 Q3 Q4 Q1 Q2 Q3 Q4 Q1 Q2 Q3 Q4 Q1 Q2 Q3Q1 Q2 Q3 Q4 Q1 Q2 Q3 Q4 Q1 Q2 Q3 Q4 Q1 Q2 Q3 Q4 Q1 Q2 Q3 Q4 Q1 Q2 Q3

2006 2007 2008 2009 2010 2011

Key Performance Measures: All Segments

6%Period over Period Growth

3%

0%

Gro

wth

Rat

e

-3%

G

-6%Demand Worked

RatesFees

WorkedProductivity Lawyer

Growth

2011 v 2010 Q4'11 v Q4'10 Dec '11 v Dec '10

Demand Growth by Practice

10%Period over Period Growth

5%

10%

0%

Gro

wth

Rat

e

-5%

G

Proportion of overall market

-10%IP- Lit L&E Litigation Real

EstateCapitalMarkets

GeneralCorp

M&A Tax Bankruptcy

5%Proportion of overall market

8% 33% 6% 6% 11% 3% 3% 3%

2011 v 2010 Q4'11 v Q4'10 Dec '11 v Dec '10

Average Daily Demand: All Segments+10%

Avg.

J F b M A M J J l A S O t N D

-10%

Jan Feb Mar Apr May Jun Jul Aug Sep Oct Nov Dec

2007 2008 2009 2010 2011

Rate Progression: All Segments$525

$475

$500

$425

$450

$400

$425

$375Q4'08

Q1'09

Q2 Q3 Q4 Q1'10

Q2 Q3 Q4 Q1'11

Q2 Q3 Q4

Standard Worked Billed Collected

Realization against Standard: All Segments92%

90%

91%

87%

88%

89%

85%

86%

87%

84%Q4'08

Q1'09

Q2 Q3 Q4 Q1'10

Q2 Q3 Q4 Q1'11

Q2 Q3 Q4

Billing Collection

18%Rolling 12 YOY Change

Expense Reductions Losing Steam

12%

15%

3%

6%

9%

-3%

0%

-9%

-6%

Q42008

Q12009

Q2 Q3 Q4 Q12010

Q2 Q3 Q4 Q12011

Q2 Q32008 2009 2010 2011

Direct Indirect

Challenges

Sluggish demand Rising expenses

Alignment of internal and te a a d

external strategy

Pricing pressure Mature and transforming industry

LAW FIRM RESPONSE

P i iti f L Fi L dPriorities of Law Firm Leaders

75%Increasing cross selling to existing clients

53%

75%

75%

Lateral hiring at partner level

Increasing profits per partner

Increasing cross selling to existing clients

49%

49%

53%

Improving realization rates

Greater use of client teams

Lateral hiring at partner level

46%

49%

Increasing average billable hours per attorney

Taking steps to further enumerate in a clear, concrete manner the value your firm delivers …

p g

42%

0% 50% 100%

Increasing use of alternative fee arrangements (e.g., fixed fees, success fees, etc)

Below is a list of topics you may or may not be thinking about as part of operating your firm in 2011. For each, please select the response that best reflects the priority level your management team will assign to each over the next 12-24 months..

Source: Thomson Reuters Executive Briefing Survey 2011

Hildebrandt Institute Marketing and Business Development Survey• Internet-based survey targeted at chief marketing

and business development officers

• 77 firms participated

• All participants receive copy of results

• Survey fielded in December 2011

Survey Participants

SeniorOther9% Senior

business development

officer28%

9%

Senior marketing and

business d l t

S i

development officer33%

Senior marketing

officer30%

Participating Firms

Number of attorneys Number of officesA 499 11Average 499 11Median 250 7

Competitive Advantage: Why do clients choose your firm over competitors?

Themes of Creating Competitive gAdvantage

26C t/ l 2619

13

Cost/valueService

Coverage

1088

ExpertiseIndustry

One-firm approach 87

6

One-firm approachPractice area

Geography

555

Understand businessInnovation

Efficient

Competitive Advantage In Their Own Words…

Structuring Marketing and Business Development in the Firm

Organization Structure of Marketing/BDOrganization of Designated

Marketing and BDStructurally distinct Integrated

Marketing Partner?Yes No

11%

30%

70%89%

70%

Reporting StructureMarketing and/or BD Other

13%

Chief Operating Officer

34%

partner/ committee

11%

13%

Managing • Executive committee ti thPartner/

Chairman42%

sometimes oversees the marketing and BD department as well

Centralization of Departments250 attorneys and fewer Over 250 attorneys

69%

21%

38% 38%

21%10%

0%10% 10%

All marketing/BD personnel are centralized in one location

Over 50% are in one location

25-50% are in one location

Fewer than 25% in any one office

one location

Median Attorneys per Department FTE

125 0125.0

Integrated departmentsAverage: 32.0Min: 11.9Max: 90

50.0

28.5

Marketing Depts BD Depts Integrated DeptsMarketing Depts BD Depts Integrated Depts

Expectations for 2012: Integrated Departments

250 attorneys and fewer Over 250 attorneys

67%

30%

45%

18% 15%

0% 0%

15%6% 3%

Increase headcount

10% or more

Increase headcount less than

10%

Keep headcount relatively

stable

Decrease headcount less than

10%

Decrease headcount

10% or more10% stable 10%

Budget changes 2011 vs. 2010250 attorneys and fewer More than 250 attorneys

44%

52%

31% 30%

13%8%

5%

15%

0%3%

0%

Increased 10% or more

Increased less than 10%

Stayed approximately

the same

Decreased less than 10%

Decreased 10% or more

the same

Peer Monitor Data: Overhead Expense Growth

Rolling 12-Month Trend

15%

20%

25%

5%

10%

Gro

wth

Rat

e

-10%

-5%

0%G

Proportionality:

-15%

Sta

ffC

omp

Ben

efits

cupa

ncy

Offi

ce

chno

logy

arke

ting

& BD Libr

ary

Out

side

Serv

ices

ecru

iting

essi

onal

29% 15% 25% 9% 8% 4% 4% 3% 1% 0.5%

Occ

Tec M O S Re

Pro

fe

Q3 2010 Q3 2011

Expectations for 2012 vs. 2011

42%

250 attorneys and fewer More than 250 attorneys

34%32%

30%

42%

21% 21%

8%5%

3% 3%

Increase 10% or more

Increase less than 10%

Stay approximately

the same

Decrease less than 10%

Decrease 10% or more

the same

Most Common Marketing and BD Roles• Event management

H t t f li t d t ti l li t 100%– Host events for clients and potential clients 100%– Approach partners with ideas for events 98.6%

• Marketing communications– Design and produce marketing materials 98.6%– Facilitate newsletters 98.6%– PR/media relations 98.6%– Directories/surveys 98.6%– Advertising 94.3%

• Research and analysis– Conduct research on potential clients 94.3%– Conduct research on current clients 91.4%

• Planningg– Assist PGLs with developing marketing plans 95.7%

Other Common Marketing and BD Roles• Training

P id t i i t i t BD 90 0%– Provide training to associates on BD 90.0%– Provide training to partners on BD 87.1%

• Research & Analysis– Conduct research on competitors 84.3%– Conduct market and industry analysis 81.4%

• Misc– Lead dev’t of firm-wide process for RFP response 88.6%– Managing social media for business development 87.1%– Maintain client database 82.9%– Develop marketing plans for all the practices 72.9%

Less Common Marketing and BD Roles• Working with laterals

L t l i t ti 65 7%– Lateral integration 65.7%– Lateral hiring 25.7%

• Client relations– Managing key client program 58.6%– Visit with current clients 57.1%– Visit with potential clients 42.9%– Gain access to new potential clients for partners 40.0%

• Misc– Pricing strategy 52.9%– Pipeline reporting 37.1%– Provide training on RFP writing 24.3%– Legal work re-engineering 12.9%

Use of Client Teams250 attorneys and fewer More than 250 attorneys

82%

45%

32%32%22%

8% 11%

Yes No, we have no plans to implement client

t

No, but we are planning to implement

li t tteams client teams

Number of Attorneys on Client Teams250 attorneys and fewer More than 250 attorneys

44%42%

35%31%

35%

19% 19%

6%3%

3 or fewer 4 5 6 10 Greater than 103 or fewer 4-5 6-10 Greater than 10

Data Suggesting Client Teams Have Measureable Impact on Business?

• Revenues

• Profitability

• New matters Yes31%

originating from client team initiatives

No69%

• Increased collections

• Cross marketing

• Client feedback

Client Teams and Attorney Compensation

Yes Unsure19%

18%16%

Yes Unsure

6%

250 attorneys and fewer Over 250 attorneys

Trends in Compensation and Client Teams• Firms are starting to experiment….

– Bonus• “Money available for successful client relationship-building

activity ”activity.• “A minor consideration in comp; possible bonus for leadership

or outstanding contribution”

Origination credit– Origination credit• “If you’re on the team, you have the potential to share in

origination.”

– Subjective input• “Part of review, but currently not measureable, more

subjective”

THE ROLE OF SOCIAL MEDIA

Dedicated Staff to Social Media47% • Graphic design/technology

liaisonliaison

• Communications & PR manager

28% • Online marketing manager

• Manager of social media

• Marketing managerMarketing manager

• Marketing coordinator

• Webmaster

250 attorneys and fewer

Over 250 attorneys

• Interactive marketing specialist

• Marketing assistantand fewer attorneys

Social Media Policies250 attorneys and fewer Over 250 attorneys

68%

84%

24%

9%12% 9%3%

Yes No, but we're working on one

No, and we're not working on oneon one working on one

What Kind of Social Media?250 attorneys and fewer Over 250 attorneys

100.0%

85 0%88% 84%85.0%79.0%

56.0%

84%72%

59%

LinkedIn Twitter Blogs FacebookLinkedIn Twitter Blogs Facebook

Trends in Social Media Use (Last 12 Months)

Increased Stayed the same Decreased85% 85%

74% 72%

15% 15%

26%20%

15% 15%

0% 0% 0%8%

LinkedIn Twitter Facebook BlogsLinkedIn Twitter Facebook Blogs

Social Media Effectiveness

Extremely effective Somewhat effective Somewhat ineffective Not at all effective

24% 60% 16% 0%Blogs

Extremely effective Somewhat effective Somewhat ineffective Not at all effective

2%75% 18% 5%LinkedIn

2%66% 27% 5%Twitter

2%43% 35% 20%Facebook

The Care and Feeding of Social MediaFrequency of Updating Content

38%

31%

LinkedIn Facebook Twitter

23%19% 18%

15% 16%

29%

16%13%

16%13%

0%

10%11%13%

3%

13%

6%11%

2% 0% 2%

At least once a day

A few times a week

About once a week

A few times a month

Once a month

Every few months

We don't regularly update contentcontent

Use of LinkedIn vs. FacebookLinkedIn Facebook

84%Last year, 23% used LinkedIn and L t

31%

42%

31%

44%

16% used Facebook

Last year, 19% used LinkedIn and 6% used Facebook

24%31%

19%27%31%

17%22%

Recruiting entry level associates

Recruiting lateral

associates

Recruiting lateral

partners

Finding potential clients

BD for individual attorneysassociates associates partners clients attorneys

Other Uses of LinkedIn and Facebook

LinkedIn FacebookLinkedIn• Alumni relations

• Client and prospect research

Facebook• Announce civic/community

events

• Internal firm working groups

• Search engine optimization

• Alumni relations

• Public relations

C di ib i• Promotion of events

• Recruitment of staff

• Content distribution

• Following clients

Comments on Effectiveness of LinkedIn• Some partners find it extremely effective, but its effectiveness is dependent

upon: (1) the attorney’s understanding of their target market and their uniqueupon: (1) the attorney s understanding of their target market and their unique advantage to their potential customers; (2) Their willingness to connect regularly with those they encounter via LinkedIn; and (3) Their willingness and availability to update status and share thoughts on industry news, articles, etc.articles, etc.

• LinkedIn is the most appropriate social platform for professional services firms. The integrated traffic increases our brand awareness and improves the first step of BD process.

• LinkedIn is valuable as a research tool and can have value for distributing marketing content (which we are exploring, but not urgently). For actual networking and business development (making “official” contact with clients/potential clients, referral sources etc.) it is a weak tool compared to p , ) pother available options. I teach attorneys to build relationships offline.

Comments on Effectiveness of Facebook• We have raised visibility of the firm and our attorneys and staff. We

post company “team” outings seminar and event photos and havepost company team outings, seminar and event photos and have had great interaction with clients and members of the media.

• Facebook is a platform where we can engage people. I can post from the firm’s FB page and that information can easily befrom the firm s FB page, and that information can easily be redistributed to our attorneys’ individual pages.

Comments on Effectiveness of Twitter• It has directly led to several media hits, as well as direct feedback

from clientsfrom clients.

• I can’t believe that in-house counsel sit around reading tweets. We do it to ‘keep up with the Joneses’ and to make it clear that we’re not a bunch of Ludditesa bunch of Luddites.

• It remains to be seen what kind of impact Twitter can really have.

Comments on Effectiveness of Blogs• Great exposure for our attorneys. We have three blogs….It was a hard sell to

get our first blog, but now the attorneys are saying we need more in eachget our first blog, but now the attorneys are saying we need more in each practice area – they realize the benefits from blogging and raising their credibility.

• Our blog postings are picked up by many traditional media and other bl S f tt h d t ll t d ttibloggers. Some of our attorneys have anecdotally reported getting new contacts as a result of their blog postings. In a couple of instances this has led to business. It’s still slow, but we are getting real traction.

• We use knowledge management attorneys to do all blog work…12 attorneysWe use knowledge management attorneys to do all blog work…12 attorneys who do nothing but evaluate and write on employment-related litigation and legislation.

• It seems like attorneys want to be on the forefront of all the new, popular t h l Y t d it l f k ti f i l h th ttechnology. Yet, despite pleas from marketing professionals who warn that their active participation will fall off after a few weeks (which could look bad for the firm), the attorneys march forward…and their participation eventually does fall off.

What’s Next in Social Media?

MEASURING EFFECTIVENESS

Tracking Social Media Results36.4% • “We have systems in place to track

all new information. Successes are30.9%

18.2%

all new information. Successes are reported at management committee and partner meetings.”

• “Every month I submit a ‘Social M di D hb d’ hi h i l d

3.6%

Media Dashboard’ which includes followers, likes, blog subscribers and track all traffic via Google Analytics. Last three months, we h h d d t ffi th h llhave had record traffic through all web marketing combined. It has amazed our managing partner when they see hard numbers.”

Job Security!Assessing Effectiveness of the Function

76%250 attorneys and fewer Over 250 attorneys

59%51%

76%

50%51%

36% 33%

50%

32%

21%

Marketing and BD activities

Increase in business from existing clients

Number of new clients

We don't measure it

existing clients

Measuring ROIPercent measuring • “I try to tie back revenue to

every investment we make I

16%

ROI every investment we make. I track revenue when possible, other metrics when not.”

• “While it is hard to measure by

8%

While it is hard to measure by dollar out vs. dollar in, we are very good at capturing marketing & business d l d8% development successes and measuring those successes against real dollars.”

250 attorneys and fewer

Over 250 attorneysand fewer attorneys

CHALLENGES FACING MARKETING AND BD SENIOR MANAGERSMANAGERS

Support From Other Departments% Somewhat High Support % Very High Support

25.0%

22.5%

43.8%

62.5%

COO

Managing partner/Chair

48.8%

34.6%

32.5%

33.3%

Practice group and dept leaders

Mgmt committee

30 0%

26.9%

39.2%

26 3%

14.1%

17.7%

Human Resources

Knowledge Mgmt

Information Technology

31.3%

27.5%

30.0%

28.7%

17.5%

26.3%

Finance

Recruiting

Human Resources

What Else Can Other Departments Do?• More collaboration more commonly mentioned

“Vi h th b i th t i t f th– “View each other as being on the same team in support of the attorneys.”

– “Get me more involved in strategy from the onset.”– “Work as a more integrated team.”Work as a more integrated team.

• More resources and support also commonly mentioned– “Understand better that to make money you need to spend money.”– “Visible vocal support from Chairman and leadership ”Visible, vocal support from Chairman and leadership.– “Our IT and Marketing are very separate departments. It would be

helpful to have their support on hard ware issues regarding the Website (i.e., servers, etc.)

• More respect/understanding also a theme– “Consider us a client, as they do the attorneys, and not put our work ‘off’”– “Have a better understanding of what our department does, our areas of

ti h t l h lt k th fiexpertise, what our goals are, how our results make the firm more successful.”

Most Effective Use of Time

53%C hi 53%

28%

Coaching

Strategy and planning

14%Working with clients

14%

10%

Managing the marketing and BD team

Collaboration/integration 10%

3%

Collaboration/integration

Improving processes

An Unexpected Benefit?

Senior marketing and BD executives can serve in an

• “A roaming integrator of ideas information and

gintegrating role, bringing the firm closer together.

• A roaming integrator of ideas, information and opportunities.”

• “Facilitating communication among partners ”Facilitating communication among partners.

• “Face time with partners discussing how to growth their practice, making connections to other p , gpartners, practices and offices in the firm.”

Change One Thing About Role?

Higher level work/ Less admin/ 30%

26%

Higher level work/ Less admin/ More time with clients

More resources/more time 26%

12%

More resources/more time

More leadership support

11%

p pp

More cooperation/support from attorneys

11%

y

Better allocation of resources

Examples of Desire for Higher Level Work– “Spend less time managing my team and keeping the

department running and spend more time on clientdepartment running, and spend more time on client interviews and highest level strategy, including lateral partner interviewing and regional growth strategies in emerging markets ”emerging markets.

– “Getting involved in so many details that require time away from the important issues Dealing with “Urgent”away from the important issues. Dealing with Urgent matters from the same lawyers who send us RFPs the day after they are due and who repeatedly rework copy, plans and other materials until they are no longerplans and other materials until they are no longer relevant.”

Examples of Desire for More Leadership Support

– Having to spend so much time explaining to management about how the marketing world has changed I feel that Iabout how the marketing world has changed. I feel that I need to come up with the next great idea that will help my firm implement it on top of everything else and then explain it to my management It would be great ifexplain it to my management. It would be great if management would be more clued into marketing so that I didn’t have to “sell” the “extra” stuff we’re doing.Lack of direction and leadership from management as it– Lack of direction and leadership from management as it pertains to the marketing and business development initiatives.Centralize marketing more and give the department more– Centralize marketing more and give the department more authority to make decisions and require people to abide by our plans.

Examples of Desire for More Attorney Support and Cooperation

– “Convince people that trying and failing is better than not trying at all ”trying at all.

– “Try to get attorneys to focus on their strengths instead of focusing on brilliant marketing ideas for which have no h f il bl t i l t ”chance of success nor available resources to implement.”

– “More input from partners”– “Stop having the attorneys resist every single thing and p g y y g g

just accept the fact that I’ve been doing this successfully for 25 years.”

Key Takeaways• Manage and plan for your own professional

d l tdevelopment

• Align your department’s goals with that of the firm

f f• Hire the best and brightest—they are a reflection of you/your department

• Work with peer colleagues on large scale initiativesWork with peer colleagues on large scale initiatives

• Approach proactively, firm leadership and seek input/ideas

• Delegate where possible

• Seek opportunities to make connections across the firmpp

Thank You!Silvia L. Coulter, MPSPrincipal

Lisa Rohrer, PhDDirector of Executive Education and

LawVision Groupscoulter@lawvisiongroup.com978-526-8316

Research FellowCenter for the Study of the Legal Profession Georgetown University Law Centerlr590@law.georgetown.edu