2015 Thomson Reuters Legal Executive Institute Annual ......Marketing 2013 to 2014 Marketing 2014 to 2015 BD 2013 to 2014 BD 2014 to 2015 . Budget changes – past year and planned

COMPANY CONFIDENTIAL

2015 Thomson Reuters Legal Executive Institute Annual Marketing and Business Development Benchmarking Survey

Background, Objectives and Methodology

Background and objectives The Thomson Reuters Legal Executive Institute hosts the annual Marketing

Partner Forum, which targets legal marketing and business development professionals. As part of this forum a presentation is given showing legal industry trends for marketing (MKTG) and business development (BD). The survey aimed to provide content for the industry trends presentation

Methodology • An online survey was conducted in December 2014. 63 survey respondents

that were marketing and/or business development leaders in medium and large firms (80+ attorneys) participated

• For their participation, respondents will receive a copy of the presentation for their participation

COMPANY CONFIDENTIAL 2

Industry Context


Demand


Billing Rates


Realization


Profitability


Respondent Profile


The majority of respondents were from larger firms (150+ attorneys) with at least five offices


5%

25%

31%

25%

14%

1

2-4

5-9

10-19

20 or more

# of firm offices

5%

27%

39%

29%

30-79

80-149

150-499

500 or more

# of attorneys

Most respondents had senior roles, reported to the managing partner/chairman, were experienced and earned $100K to $350K


2%

8%

24%

32%

34%

Practice Group Head

Other MKTG or BD role

Most senior BD officer

Most senior MKTG officer

Most senior MKTG and BD officer

Position

10%

27%

27%

36%

Less than one year

1-2 years

3-4 years

5 or more years

Years in Role

20%

10%

14%

56%

Other (please specify)

MKTG and/or BD partner/committee

COO

MNG Partner/Chairman or most senior lawyer

Report to

3%

5%

73%

10%

7%

2%

$40K to $75K

$75K to $100K

$100K to $350K

$350K to $500K

$500K to $750K

$750K to $1MM

Total Compensation

Marketing/BD Dynamics


MKTG and BD departments remain largely combined and centrally located


17%

83%

MKTG and BD structurally distinct departments?

Yes No

10%

17%

29%

44%

Fewer than 25% of in any one office

25-50% in one location

Over 50% in one location

Centralized in one location

Location of MKTG and BD personnel

In the past year, MKTG and BD FTEs have increased – this trend should continue for BD

10.5

12.8

12.8

12 months ago

Currently

2015 planned

Marketing FTEs


8.2

8.9

9.7

12 months ago

Currently

2015 planned

Business Development FTEs

MKTG and BD budgets have increased and will continue to increase in 2015


2%

5%

2%

2%

10%

7%

3%

46%

44%

44%

36%

34%

24%

32%

32%

8%

20%

19%

31%

Marketing 2013 to 2014

Marketing 2014 to 2015

BD 2013 to 2014

BD 2014 to 2015

Budget changes – past year and planned Decrease 10% or more Decrease <10% Stay the same Increase <10% Increase 10% or more

Concrete BD activities are thought to be the most effective of MKTG and BD alternatives

4%

20%

21%

23%

38%

60%

38%

52%

61%

71%

75%

80%

81%

94%

Advertising

Marketing programs & lead generation

Sponsorships

CRM & data management

Law firm employee training & education

Lawyer visibility

Sales training

Key client teams – program management/implementation

Sales / business development coaching

Client education

Client interviews

Prospective client visits

Relationship building

Existing client visits

% indicate activity is effective (4 or 5 on a 5 point scale)

(n=21 - 56)


BD Activities

MKTG Activities

MKTG and BD budgets are concentrated on concrete activities

5%

7%

8%

16%

21%

32%

Law firm employee training & education

CRM & data management

Advertising

Marketing programs & lead generation

Sponsorships

Lawyer visibility (individual/practice area

marketing activities)

% of MKTG budget spent on activities – past year


3%

4%

6%

7%

12%

12%

19%

26%

Sales Training

Client interviews

Key client teams - program management/implementation

Sales/BD Coaching

Prospective Clients visits

Client education (e.g., hosted seminars)

Existing Client visits

Relationship building (lunches, dinner, etc)

% of BD budget spent on activities – past year

•Lawyer visibility, sponsorship, and marketing programs & lead generation account for 69% of marketing budgets

•Relationship building is the most common BD activity • Comparatively, few firms are investing heavily in key client teams

Organizational Support


BD and MKTG professionals feel that their function is viewed as important by their firms

22%

22%

24%

25%

31%

36%

39%

39%

42%

44%

44%

48%

49%

75%

Finding effective, experienced associates

Developing new expertise

Finding effective first year associates

Developing new services

Ensuring consistent services across locations

Enhancing management practices

Retaining qualified talent to someday succeed current leadership

Leveraging technology investments that have already been made

Recruiting effective partners

Controlling costs

Leveraging technology to ensure efficient firm management

Leveraging technology to ensure efficient practice of law

Hiring of laterals

Improving business development

% indicated important initiative in their firm (9 or 10 on a 10 point scale)


86%

27%

25%

17%

27%

29%

7%

12%

34%

10%

10%

5%

3%

2%

% Top three initiative

Most perceive that they are supported by the law firm, with the exception of some specific administrative departments


43%

53%

57%

59%

63%

70%

79%

81%

82%

Recruiting

Human resources

Information technology group

Practice group and department leaders

Library/Knowledge management group

The main lawyer management/executive committee in your firm

Finance

Managing partner/Chairman

Chief Operating Officer

% indicate receive high level of support (4 or 5 on a 5 point scale)

•COO, managing partner/chairman and finance are providing the highest levels of support

•IT, HR, and recruiting provide much less support

Culture / Lawyer Engagement is a major challenge for both BD and MKTG

10%

3%

3%

8%

31%

44%

Other

Planning

Lack of information

Firm business change

Lack of resources (i.e. budget, time, staff)

Culture / Lawyer engagement

Greatest business development challenge


5%

7%

8%

10%

10%

29%

31%

Other

Communicating brand attributes

Technology

Lack of resources

Building awareness

Culture / lawyer engagement

Differentiation

Greatest marketing challenge

Many things could be done to enable greater effectiveness, with collaboration as the top action item


12%

46%

47%

49%

56%

68%

Other

Increase staff dedicated to marketing & business development

Improve marketing and business development processes

Increase priority of marketing & business development

Use metrics or a dashboard

Increase collaboration

What other groups in your firm could do to make you more effective?

Almost universally, the MKTG/BD department is involved with BD training and coaching


5%

48%

48%

Professional Development Department

Business Development/Marketing Department

Both Professional Development and Business Development/Marketing

Those responsible for BD training/coaching and client team training

•About half (53%) of the time the professional development department is involved in some manner

Measurement


Volume of activity and additional business are how most measure effectiveness of MKTG/BD


29%

22%

47%

54%

66%

We don't measure it

Other

Number of new clients

Increase in business

Marketing and business development activities (RFPs, etc)

How MKTG/BD effectiveness is measured

•A notable minority do not measure effectiveness at all

Few explicitly measure ROI


25%

75%

Measure MKTG/BD ROI

Yes No

•A number of different hard and soft measurements are tracked and reported •Assessing number of new assignments directly related to the BD activities Assessment of turnover by office and Practice Groups

•By counting both activity (touch points through events and pitch opportunities) and new business. •Events Client acquisition RFP win rate •Identify KPIs and measure against them (at least quarterly) throughout the year. •Largely from top line revenue growth •Marketing budget in comparison to Revenue Per Partner and overall revenue •Revenue per dollar spent? Goal is 100:1 on our teams 50:1 on our practice groups •Revenues •There is an expectation on lawyers to complete a review of each investment to ensure that planned goals were met. We track new business where possible to marketing activities. We are beginning to track correlations between individual Business Development/ Relationship expenses and file originations.

•Tracking referral bases, tracking engagements •We list target clients build BD initiative around those clients track BD for each target client track sales for each target client •We tie new business generation to the cost for specific marketing and BD activities. •We track the revenue that results from specific activity minus costs.

What they measure?

Most don’t have data analytics, but plan on implementing them in the future


29%

10%

19%

22%

20%

Does your firm have established data analytics? Yes No, but we plan to create one in the next 6 months No, but we plan to create one in the next year No, but we plan to create one in the next 2 years No, and we have no plans to create one

Client Teams


Most have or plan to have client teams. Lack of accountability is a challenge to those with client teams


44%

32%

24%

Firm has client focused teams?

Yes No, but plan to implement No, don't plan to implement

19%

35%

42%

81%

Lack of training

Lack of effective metrics

Lack of leadership

Lack of accountability

Biggest impediments to client team success

(n=26)

Competitive Advantage


Most firms have defined their sources of competitive advantage

73%

27%

Partners in firm have defined its competitive advantage?

Yes No


51%

59%

66%

66%

86%

Research competitive firms to determine their relative strengths and weaknesses

Lead discussions on competitive advantage with partners

Define the firm's distinct competitive advantage internally

Advise management on how to develop a sharper competitive advantage

Communicate the firm's distinct competitive advantage externally

Marketing/BD department’s role in defining & communicating competitive advantage

•Marketing and BD departments are mainly charged with communicating their firms’ competitive advantage

•However, they are also often involved in helping define their firms’ competitive advantage

Expertise in a specific area, relationships, and service are primary differentiators

3%

10%

14%

36%

37%

37%

42%

61%

64%

75%

Other

Related services

Technology

Geography

Brand / Prestige

Price

Firm-wide service strategy

Relationship

Practice area specialization

Industry expertise

Methods firm uses to differentiate itself


% primary differentiators

24%

14%

20%

17%

10%

8%

3%

0%

3%

0%

Industry expertise and service are thought to be key sources of competitive advantage


Description of firms competitive advantage *

* Competitive advantage is defined as the unique reason(s) why clients choose your firm over competitors.

Conclusion


Summary

• Planned growth in MKTG/BD staffing and budgets should lead to opportunity

• MKTG/BD professionals feel largely supported by their firms

• However, measurement of MKTG/BD effectiveness remains simplistic

• This leads to perceptions and spending decisions that may not support the most effective activities

• The biggest challenge to effectiveness is firm culture in terms of measurement of effectiveness and collaboration with Marketing

• The law firm perception of competitive advantage is generally simplistic and does not meet the standard criteria: unique, sustainable and valued.


Actions

• Implement rigorous measurement of activities

• Redirect investment based on measurement

• Have a positive impact on firm culture in relation to MKTG/BD, and identify collaboration opportunities

• Promote a more rigorous review of firm competitive advantage


Documents

2015 Thomson Reuters Legal Executive Institute Annual ......Marketing 2013 to 2014 Marketing 2014 to 2015 BD 2013 to 2014 BD 2014 to 2015 . Budget changes – past year and planned