Marketing for Attorneys and Law Firms

William Winston

• Publisher: Routledge
• Year: 2013
• ISBN:
  9781135022938
• Edition: 1
• Topic: Business
• Subtopic: Business General
• Index: Business

Marketing for Attorneys and Law Firms presents timely topics which are well-researched and written by a fine array of authors from around the country. As attorneys are becoming more interested in marketing and how it can benefit their practices, this book is an important tool. It aids attorneys as they evaluate and improve old marketing strategies and create new marketing strategies where such advertising was neglected. It is an ideal readings text for today's attorney and legal consultants who wish to obtain a better insight into select aspects of marketing the law firm.This is the only readings book that focuses on these areas: applications of marketing planning, attorney selection by consumers, and client and provider attitudes toward legal services. Part Two thoroughly examines various aspects of how clients select and evaluate the performance of legal services. Today's attorneys must first fully understand what their clients perceive about their services before jumping into marketing their services. This section provides insight that most attorneys would normally not investigate and lays the groundwork for the development of marketing programs. Part Three addresses the wide use of legal advertising, and again provides insight into what clients and attorneys think and perceive about various forms of advertising the law firm. This provides a base from which attorneys who are planning to advertise may be able to prevent failure and promote a greater level of success for the advertising program.Applied mainly to private legal practices and clinics, some of the specific topics covered in the three sections include consumers'perceptions of attorneys and legal advertising; attorneys'perceptions of marketing and advertising; perceived risk in selecting an attorney and how consumers actually select attorneys; customer/client service attributes for attorneys; measuring the effectiveness of legal advertising; market planning and strategies for today's legal practice; promoting the legal practice; and developing referral and networking systems in legal practice.For attorneys in private practice, law firm libraries and administrators, law professors who specialize in practice development, consultants who concentrate in legal practice marketing, law school libraries, and marketing professors and consultants who teach or consult in the professional service sectors should read this invaluable reference book.

PART ONE: THE IMPORTANCE OF MARKETING PLANNING AND STRATEGY DEVELOPMENT FOR ATTORNEYS

Practice Enhancement and Marketing Strategies for Law Firms

William J. Winston

INTRODUCTION

The attorney in today’s marketplace faces a major dilemma between constantly needing to retain existing clients and attracting new clients while not resorting to image-cheapening self-promotion. The balancing act makes many existing attorneys feel very uncomfortable when discussing marketing. This is especially true when they start exploring marketing strategies beyond the historical practice-building techniques of nurturing personal contacts and referral networks. The term “marketing” has various degrees of understanding by professionals. It is not unusual to experience these various definitions of marketing by physicians, accountants, architects, and all types of service professionals. In other words, the educational process of learning a new area such as marketing, which was never learned in professional education, is common through all professional disciplines. Attorneys are not alone in this learning process. However, the majority of practicing attorneys deal with clients and issues that, for the most part, are business related in some way. Attorneys come into contact with many more business related issues and situations than most other professions.

The use of marketing in the legal profession has only come into its own during this last decade and still is only at the beginning of its potential. Many attorneys have avoided the word “marketing” by using such terms as “practice-building,” “practice-development,” “practice-enhancement,” and sometimes even the term “practice-promotion.” The reasoning is evidently (a) a lack of understanding of the broad definition of marketing and (b) the desire to again walk that fine line so that their professional image is not tarnished. The majority of attorneys were never taught about marketing in law school, but they were marginally instructed about the need for developing a practice. These concepts are actually all synonymous with the true meaning of marketing.

The real purpose of marketing is to communicate an idea, image, and information to your current or potential client. A considerable amount of marketing strategies are related to achieving the following:

• Informing clients about your services,

• Educating the community about specific issues,

• Attracting specific new clients,

• Retaining existing clients,

• Nurturing professional networks, and

• Enhancing the professional image of the attorney or firm.

Based on these goals it is evident that the purposes of marketing are informational, educational, practice-development, and image-building. Marketing encompasses and provides all of these professional benefits for the attorney.

MARKETPLACE TRENDS

During the last 15 years the marketplace for practicing law has changed significantly. First of all, we are at a point in history where we now have more practicing attorneys than ever before in the market and large amounts of graduates constantly coming out of school. This has created a swing toward a supply-driven market. In other words, the demand for legal services has plateaued while the supply side continues to increase at rapid rates. Second, there has been a tremendous profit squeeze on existing practices. Overhead expenses per attorney have, in select cases, tripled and even quadrupled while gross receipts have approximately doubled. Back in the late 1970s and early 1980s revenue far outpaced operating expenses. Firms expanded considerably during that time, added large numbers of attorneys, promoted even larger numbers to partnership levels, and moved into relatively high-priced and prestigious office locations. This profit squeeze has forced significant changes in the way attorneys operate their practices. Third, the consumer for legal services has gradually become more aware and educated in “shopping around” for an attorney. Whereas most people rarely changed attorneys for long periods of time in the past, today’s consumer is questioning more about the cost-effectiveness of legal resources. This has led to the consumer being more selective in the purchase of these services and more willing to change attorneys in a shorter time frame. In addition, the consumer’s expectations have risen to expect quality legal work and a considerable amount of positive service and provider interaction. In fact, the human relations aspect of providing legal services has become one of the most important areas of having a successful law practice today. In conclusion, the result of all of these trends has been the emergence of a fiercely competitive marketplace. In response to this competitive marketplace, law firms have started to (a) be more selective and plan out professional hiring and attrition, (b) develop improved cost analysis and control mechanisms in their practices, and (c) explore and plan out the market development aspects for practice enhancement. This has led to a greater acceptance of marketing as a practice management tool, in conjunction with other tools such as finance, human resources, and general management.

A great example of how the legal marketplace has changed is the alterations in the century-old tradition of job securities for attorneys. The more recent business cycles of prosperity-recession-prosperity makes this change clearly obvious. For example, partnerships at law firms were akin to tenure at university for faculty. Barring extreme misconduct, attorneys were partners for life. A law firm typically took care of its own through personal problems related to alcoholism, divorce, financial, and other calamities. As law firms mushroomed and faced a more competitive marketplace, this level of cohesiveness and tenure eroded. For example, in the early 1990s, it has been estimated that several thousand junior attorneys and a couple of hundred partners have been asked to leave their positions due to economic conditions. Legal recruiters have also been validating this trend toward a tighter job market during recent years. Many attorneys, in fact, are now working in firms on a part-time and temporary basis. With the need for a more market-driven organization, the most attractive future partners and practicing attorneys will be those individuals who can bring a significant dollar amount of business in a very short time frame to the firm. Of course, legal specialties also have business cycles to them. For example, the demand for attorneys who specialize in real estate is directly related to the prosperity of the real estate industry. Another example would be those attorneys who specialize in mergers and acquisitions. They prospered in the 1980s when firms were merging at an all-time rate whereas the 1990s have witnessed a much reduced level of corporate mergers. The future of being an attorney will be more a matter of “what have you done for me lately?” This trend requires a significant understanding and ability to apply marketing as a practice enhancement strategy.

In the 1980s, nationwide there was approximately a seventy-five percent (75%) increase in the number of attorneys and the trend continues so that within a few years it is estimated there will be over one million attorneys in the United States. This is the highest number of attorneys per population in the entire world. The legal industry will be passing an estimated level of one hundred billion dollars in revenue. This growth rate financed the huge growth of the legal market. However, much of the growth of the 1980s was related to mergers, acquisitions, and corporate buy-outs, which have slowed significantly so far in the 1990s. In the early 1990s we see, for example, a strong demand for attorneys who specialize in bankruptcies and debt negotiations. There are some “recession-proof” areas such as environmental law and overall general litigation. Unfortunately, whenever we go through strong business cycles and come out of recessions, there is usually a major increase in personal and corporate suits. This is especially true as companies and individuals default more on debt payments and contracts.

In the 1990s it is not good enough to be a competent attorney. One must also possess excellent business skills in order to organize oneself to effectively react to market changes and aggressively nurture new client bases. For example, you see a large number of firms implementing more strategic planning than ever before. In addition, a number of firms have restructured themselves to be able to make business decisions which make them more market driven. However, the success of firms is not completely linked to the economy. Many large firms are overstaffed at a level that has become impossible to maintain. Many observers of the legal profession say firms are using recessions as an excuse to get rid of unproductive partners and expensive young associates. Many firms, for instance, were paying as much as $80-90,000 per year as starting salaries in the 1980s and early 1990s. In many instances a third- or fourth-year associate is nothing but overhead for a firm, especially if they have not started to bring in new clients by themselves.

The legal profession is now perceived as a business that just happens to have professional attributes. The practice of law is nothing like it was fifteen years ago. It has less to do today with the lawyer’s intellect and technical abilities than it does with performance, and service and client retention and attraction. The firms who appear to have the most economic pressures are those with more than a hundred attorneys that have senior associates charging more than $200 an hour and partners charging in the $400-500 an hour range. Their clients are becoming much more cost conscious in evaluating these rates and are looking for significant ways to reduce their overall legal bills.

There is a concern that a lot of the excess associates, layoffs, and future graduates are women and minorities. Unfortunately, women are considered more expensive because they have a tendency statistically to bring in less dollar business and may incur more expenses due to maternity leave. Women and minorities have become the newest casualty of this very competitive climate, that, many are stipulating, is a subtle form of sex discrimination. The pressure on partners and associates today is to bring in new business and many perceive this direction as being much more difficult for a female attorney. Women are indicating that they are hard-pressed to bring in the same number of clients as the male attorneys from a male-dominated corporate world in which executives in many cases are still not comfortable turning their legal business over to a woman. Law firms argue that it is purely a matter of mathematics, but many women call it discrimination. It is also evident that there is a major pay difference between female and male partners. Business development still has “gender-related” problems. For example, the majority of senior partners, administrators and business development committee members in law firms are male. As mentioned before, the people handing out the business in corporations, by and large, are men. Opportunities for advancement and promotion appear less available to women than to men.

Another interesting trend is the time eligibility in becoming a co-owner of a firm. Some firms are putting pressure on associates to bring in new business earlier in their careers and are using shorter cut-off timelines for promotion. This also is making life much harder for female attorneys as opposed to male attorneys. It is not likely that anyone wants to drive women out of the legal profession, but the way the marketplace is working, women will have less opportunity because they are not in an equal position to succeed the way the firm has organized promotion. While it is has gotten tougher to advance in firms, women continue to make up a larger proportion of new attorneys coming out of schools. For example, they now make up an excess of twenty percent (20%) of the practicing attorneys, compared to only three percent (3%) twenty years ago. However, women comprise just a little over six percent (6%) of the law partners in the country, representing an increase of only one percent (1%) per year.

The bottom line is that many law firms are now reconsidering how they are going to compete, pay partnership salaries, and bring in enough profits to survive and prosper. The profession is in a state of transition and law firms are reacting in different ways. The major emphasis is on bringing in new clients and maintaining old ones. In the legal profession they usually associate and call this ...

Table of contents

• Cover
• Halftitle
• Title
• Copyright
• Contents
• About the Editor
• Contributors
• Preface
• Part One: The Importance of Marketing Planning and Strategy Development for Attorneys
• Part Two: Client Selection and Evaluation of Legal Services
• Part Three: Client and Provider Attitudes and Implications for Legal Advertising
• Index