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Amid a competitive environment and tepid recovery, law firms must shift their growth strategies from a traditional marketing focus to one of business development. That was the key lesson we heard during a webinar presented today on how to grow a law firm in a tight economy.
Presenters Doug Johnson of Catapult Growth Partners and Mo Bunnell of the Bunnell Idea Group presented the first in a series of hour long webinars dedicated to law firm business development called – Moving Along the Arc.
When the second and third webinars open up for registration we’ll be sure to post that information here. In the meantime, here are three takeaways we found insightful.
1. Legal: A Seller’s Market to a Buyer’s Market.
Since the downturn in 2008, the legal industry has shifted from a seller’s market to a buyer’s market. Mr. Johnson says law firms were able to raise rates over minimal objection or resistance for 25 years…but that’s no longer true.
He said lawyers are capable business people, but they’re experience stems from a “model that has worked exceedingly well for a long time” and now it’s changed. It’s a resistance to that change, as opposed to business acumen, that tends to hold law firms back.
Mr. Johnson cited research from the book Think Like a Freak (from the authors of Freakonomics) which found that highly educated people tend to take very strong positions and are not easily persuaded to change.
2. Strategy is fundamentally about change.
Strategy is about addressing changes that are either prompted or imposed. There are four broad sources for change in law firms which are:
- Change prompted by aspirations (such as to grow a practice)
- Change prompted by weakness (perceived or realized)
- Changed imposed by competitors
- Change imposed by clients
Law firms are typically slow to adapt to change according to Mr. Johnson and therefore the changes that drive business development strategies usually are imposed by competition or clients. For example, new entrants such that perform work more efficiently or increased client bargaining power.
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3. For the law firm CMO, it’s all about revenue.
Law firm leaders are realizing they can’t simply keep cutting. Certainly holding expenses in check is a good thing, but at “some point we’ve got to grow the top line.” To grow the top line, law firm leaders are looking to the law firm chief marketing officer (CMO).
Mr. Johnson believes CMOs must transition from the “2P’s” of law firm marketing, of “parties and proposals” to leveraging big data – such as that found in law firm CRM – and competitive intelligence and implementing digital strategies. In a modern environment, law firm marketing, including business development, is more work than any one person can handle.
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Do you agree that law firms need to shift from a traditional marketing mind set to one focused on business development? What would you add? What questions would you like to ask of Mr. Johnson or Mr. Bunnell?
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