January 30, 2014
Attendees of the 2014 Marketing Partner Forum in Naples, Florida last week had the opportunity to listen to Silvia Coulter, Principal Consultant of LawVision Group LLC, and Mark Medice, Senior Director of Peer Monitor, present the results of the 2014 LawVision Group/Peer Monitor Survey.
The results show a continued increase in the sophistication of marketing and business development strategies among law firms, but ample room for growth and, as always, an increase in new challenges to success.
Here are the highlights of that presentation:
Competition Has Grown And Diversified
Law firms are competing more than ever before for business, and not just with their peers. More work is going to smaller firms or is being kept in-house, and an increasing share is being sent to ‘legal practice outsourcing’ (LPO) or ‘managed legal services’ companies. Forecasting shows that this trend is expected to become more pronounced going forward. With the aid of technology, smaller firms have the ability to compete with larger firms in a global market and companies like Axiom are becoming more formidable competitors. Current LPO market represents only a fraction of potential market, but future market growth of 30 percent is expected through 2015. Lastly, the retention of litigation of work in-house continues to expand. Historically, certain specialties, like litigation, tax, and mergers and acquisition transactions, have been the domain of outside counsel, but even these traditionally outsourced areas are now staying in-house. This is because general counsels are increasingly reluctant to spend the resource needed to retain outside help.
Bright Spots Shine Through
Coulter and Medice said while the information about increasingly stiff competition may seems bleak, there are bright spots in the survey results. Work in areas like intellectual property, real estate, litigation and, especially, transactional law is growing and is expected to continue to grow. This suggests that firms may need to alter and shift their approaches in order to access the pockets of law that clients need help addressing.
Differentiation: Innovate, Don’t Imitate
For law firms, differentiation continues to be a challenge. The survey shows three interesting things:
- Many firms plan to increase their marketing budgets, or at least keep them stable, for the foreseeable future.
- All survey respondents reported a plan to maintain or increase their marketing headcount for 2014.
- The median “attorney per full-time business development staff” ratio has increased to 25:1 in 2013 from 35:1 only two years ago. The rate of change in this percentage shows a big emphasis on growth. Across the board, business development budgets are increasing as much as 10 percent.
- Another interesting area of growth is in the number of firms with dedicated social media staff. Seventy-two percent of the respondents said they have at least one dedicated social media staff member. Only two percent reported that they have no social media strategy.
All of this speaks to the challenge facing marketing and business development departments, which will have to continue to create sophisticated marketing strategies to distinguish their firm from competitors.
Overall, the theme of Coulter and Medice’s report on the survey was that the legal market is very dynamic, full of challenges but also full of opportunity. Thank you to everyone who made the 2014 Marketing Partner Forum a success. We will see you next year!