Law firms on average firms spent 3.4 percent of their annual collected fees on marketing and business development activities in 2013 -- up from a previous level of only 2.3 percent in 2012.
Legal marketing spending has rebounded to pre-recession levels according to a new national survey of local and regional business law firms by Alyn-Weiss & Associates, Inc., a Denver-based legal marketing consultancy.
The percentage does not include expenses for salaries, consulting, agency fees or charitable contributions.
Another key finding was that law practices must effectively embrace digital promotion or they will miss being considered for desirable cases they are qualified to handle.
The drop in 2012 was the first spending decline recorded by Alyn-Weiss since the consultancy started conducting its bi-annual survey of local and regional corporate, transactional and defense firms in 1990. In its initial 1990 survey firms reported spending just 1.45 percent of annual fees on marketing, said founder and president Bob Weiss.
6 Most effective marketing tactics
Analyzing the new 2014 survey results, Weiss said the data makes clear that law firms that fail to employ six tactics are simply missing out on desirable work:
- Effective websites
- Online rankings
- Ratings directories
“The data also makes clear that you can still be successful running a firm based solely on the traditional relationship tactics used for decades-- the word-of-mouth model that includes seminars, client entertainment, trade and community group presence,” Weiss said.
“However, the data makes it equally clear that some work firms are receiving comes completely as a result of online rankings, client reviews, LinkedIn, blogging and a firm’s website.” In other words, the word-of-mouth model has competition, the online model, said Alyn-Weiss partner Amber Vincent.
Employing a combination of the two is the most effective way to market, the survey reveals.
Finding a lawyer absent a personal recommendation
“For years we have said the practice of law has always been a relationship business and will always be a relationship business,” Vincent said. “The data now reveals cases come to firms whose new clients identify and vet them online completely absent a personal recommendation from a friend, colleague or other lawyer.”
“Millennials understand this communication model works for a portion of the market, but it can be a leap of faith for mid-career and senior practitioners,” Vincent said. “That’s true even though the lawyers I work with tell me they or their partner recently got a case from a new client who said they found their colleague online and checked their ratings and rankings before emailing them about their matter and negotiating a fee agreement.”
In that process, Vincent said, websites are a critical. And the single most effective tactic firms employ according to the survey are firm websites, Vincent said.
Asked what tactics have brought worked to their firm directly and by referral over the past 18-24 months:✓70 percent of the 117 firms in the survey said their website generated new matters.✓51 percent of firms reported seminars/presentations brought in cases, followed by:✓ Law firm networks for 46 percent.✓Trade and community groups 42 percent✓Entertainment for 31 percent of firms.✓Right behind those tactics came search engine optimization, emailed alerts and newsletters, LinkedIn and blogging as being most effective.
The overall firm spending percentages do not include the cost of outside marketing consultants or in-house marketers, Weiss said. “We ask firms specifically exclude marketing personnel and consulting fees because they vary so much from city to city compared to the cost of the other tactics.”
Alyn-Weiss surveyed firms of less than 100 lawyers. The survey included responses from 117 local and regional law firms and was completed this fall. All responding firms practiced corporate, transactional and defense litigation and the average size firm had 37 lawyers.