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Martindale-Hubbell ® Small Law Firm Marketing Index September 2005.

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Presentation on theme: "Martindale-Hubbell ® Small Law Firm Marketing Index September 2005."— Presentation transcript:

1 Martindale-Hubbell ® Small Law Firm Marketing Index September 2005

2 2 Executive Summary In the summer of 2005, LexisNexis Martindale-Hubbell commissioned a benchmarking study of how small law firms in the U.S. market their practices to prospective clients in an attempt to grow their business. The Martindale-Hubbell Small Law Firm Marketing Index, conducted by Harris Interactive, surveyed nearly 1,000 small law firms nationwide (firms with 20 or fewer attorneys). Below are some of the highlights from the study: Law firms are placing increased importance on marketing their practices as reflected in their budgets. The percentage of small firms spending 5% or more of their revenue on marketing doubled in the last three years, from 11% of firms in 2002 to 22% of firms in 2005; Marketing is one of the top “non-law” activities that take place in an average week. On average, practicing law takes up 63% of a lawyer’s week, managing their business accounts for 14% of the week, and marketing-related activities are next, responsible for 8% of the week; The firm Web site is perceived to be the most valuable marketing tactic for growing a small firm practice, with 80% of all firms reporting they have a Web site and 89% finding it valuable. The goal of the study was to document key marketing initiatives, marketing spend and the most valued tactics in small firms. Read on to learn more about how firms market their practices today.

3 3 Goal: Establish a series of benchmarks to document small law firm marketing efforts, including an assessment of the types of marketing tactics they find to be most successful. Methodology: –Harris Interactive conducted an online study among employees of small law firms (defined as having 20 or fewer attorneys). –The self-administered, online questionnaire was conducted using proprietary, Web-assisted interviewing software and took approximately 15 minutes to complete. –All qualified respondents were either solely or partially responsible for the decision-making process of marketing their firm. –Sample of current subscribers, past and non-subscribers used. –A total of 967 surveys were completed. Overview

4 4 Only responses of 5% or more are shown. Main Area of PracticeSize of Firm GenderAgeRegion Demographics of Respondents

5 5 Marketing Responsibility

6 6 The majority of marketing responsibility in law firms lies with a partner. In over two-thirds (68%) of firms, partners have primary responsibility for planning and executing marketing plans. Members/associates/paralegals (17%) or office managers/assistants/secretaries (11%) are next most likely to have this responsibility. In 9% of firms, outside sources (marketing consultant, outside agency, marketing service provider) have primary responsibility. 4% of firms have a marketing manager/director/officer with primary marketing responsibility. Partner Member/associate/paralegal Office manager/assistant/ secretary Marketing consultant/ Marketing service provider/ Outside agency Marketing manager/ director/officer Other None Partners Drive Marketing Decisions

7 7 Partner Member/associate/paralegal Office manager/assistant/ secretary Marketing consultant/ Marketing service provider/ Outside agency Marketing manager/ director/officer Other None Solo practitioners, by nature, are more likely than larger firms (2-20 attorneys) to have no one in particular in a position of primary responsibility when it comes to planning and executing marketing for their firms. Larger firms (11-20 attorneys) rely more heavily on other members of staff for marketing responsibility, with 28% of firms reporting an office manager, assistant, or secretary having primary responsibility and 13% of firms reporting a marketing manager, director or officer. Marketing Responsibility By Size

8 8 Marketing Spend

9 9 Law firms place increased importance on marketing their practice as reflected in their budgets. –Half of law firms report spending over $5K on firm marketing. –Firms spending 5% or more of their revenue on marketing doubled from three years ago from 11% to 22%. –Firms spending $5K or more of their revenue jumped from 33% to 50%. Marketing Spend

10 10 ►Firms are spending a greater percentage of their revenue on marketing than they did three years ago. % of Revenue Spend on Marketing % of Firms % of Revenue Upswing in Marketing Spend – Total

11 11 $ Spend on Marketing ►Firms are spending a greater dollar amount on marketing than they did three years ago. % of Firms $ Spent on Marketing Upswing in Marketing Spend – Total

12 12 Spending among all segments has increased significantly over the past three years (see charts on following pages). Solo practitioners:  More than doubled in their spending of 5% or more (12% to 26%).  Increased their spending of $20-50K by 300% (1% to 4%). 2-5 attorney firms:  Nearly doubled in their spending of 5% or more (12% to 22%).  Increased their spending of over $10K from 20% to 33%. 6-10 attorney firms:  Doubled in their spending of 5% or more (6% to 12%).  Increased their spending of over $50K from 9% to 13%. 11-20 attorney firms:  The percentage of those spending 5% or more quadrupled from 5% to 20%.  More than doubled their spending of over $50K from 5% to 13%. Marketing Spend

13 13 % of Revenue Spend on Marketing by Solo Practitioners % of Firms % of Revenue % Revenue Spend Among Solos

14 14 $ Spend on Marketing by Solo Practitioners % of Firms $ Spent on Marketing $ Spend Among Solos

15 15 % of Revenue Spend on Marketing by 2-5 Attorney Firms % of Firms % of Revenue % Revenue Spend Among 2-5 Attorney Firms

16 16 $ Spend on Marketing by 2-5 Attorney Firms % of Firms $ Spent on Marketing $ Revenue Spend Among 2-5 Attorney Firms

17 17 % of Revenue Spend on Marketing by 6-10 Attorney Firms % of Firms % of Revenue % Revenue Spend Among 6-10 Attorney Firms

18 18 $ Spend on Marketing by 6-10 Attorney Firms % of Firms $ Spent on Marketing $ Revenue Spend Among 6-10 Attorney Firms

19 19 % of Revenue Spend on Marketing by 11-20 Attorney Firms % of Firms % of Revenue % Revenue Spend Among 11-20 Attorney Firms

20 20 $ Spend on Marketing by 11-20 Attorney Firms % of Firms $ Spent on Marketing $ Revenue Spend Among 11-20 Attorney Firms

21 21 Time Spent on Firm Marketing

22 22 Aside from practicing law and managing their practice, law firms spend much of their week engaged in marketing/ business development activities (8%): –Same amount of time is spent on conducting research (8%). –Lesser percentage of time is spent on professional development (6%). Marketing is an integral part of a lawyer’s time at work. Marketing is Among the Top “Non-Law” Activities

23 23 As compared to respondents in smaller firms (1-10 attorneys), respondents in larger firms (11-20 attorneys) tend to spend less time actually practicing law, and more time in marketing/business development. These larger firm respondents (11- 20 attorneys): –spend a greater percentage of their time in an average week than smaller firms (1-10 attorneys) on marketing/business development (12% vs. 7%) –spend a lesser percentage of time than smaller firms (1-10 attorneys) on practicing law (58% vs. 63%) 11-20 Attorney Firms 1-10 Attorney Firms Law Firm Activities Marketing/Business development Practicing law Managing the practice Conducting research Professional/Personal development Other Marketing is Among the Top “Non-Law” Activities

24 24 Marketing is Among the Top “Non-Law” Activities

25 25 Utilization of Marketing Tactics

26 26 %Spend on Marketing Tactics Yellow pages Client entertainment Legal directory listings Firm Web sites Event sponsorships Giving/ hosting seminars PR/ writing articles Referral services Local outdoor ads Paid-per-click placements Sponsorships on legal Web sites ►Law firms spend a smaller percentage of their revenue on print or online yellow pages today than they did three years ago (22% vs. 25%). Yellow pages, client entertainment and legal listings are the top three most utilized marketing tactics among law firms. Directory Listings and Client Interaction Are Preferred

27 27 While law firms devote their marketing budgets to similar tactics, size tends to dictate the percentage of their budgets allocated to certain tactics. Larger firms (6-20 attorneys) Larger firms allocate more of their budget to client meals and entertainment than smaller firms (30% vs. 18%). Larger firms tend to spend almost twice as much on event sponsorships (11% vs. 6%) and giving/hosting seminars (11% vs. 5%) than smaller firms. Smaller firms (1-5 attorneys) Smaller firms spend twice as much of their budget on print/online yellow pages than larger firms (24% vs. 13%). Solo practitioners spend more on referral services than firms with more than 1 attorney (5% vs. 3%). How Size Affects Choice of Marketing Tactics

28 28 Current % Spending On Marketing Tactics Client entertainment Legal directory listings Firm websites Event sponsorships Giving/ hosting seminars PR/ writing articles Referral services Local outdoor ads Paid-per-click placements Sponsorships on legal Web sites Yellow pages Current % Spending on Marketing Tactics

29 29 Web sites are considered a primary marketing tool for growing a firm’s practice. The most valuable marketing tools small firms use to grow their practice include: –Law firm Web sites –Printed/online legal directory listings –Public/media relations/writing articles –Giving/hosting seminars Yellow pages as a valuable tactic is rated a distant 6th at 68%. Of law firms surveyed, the law firm Web site was deemed as the most valuable tactic to growing their practice. 89% of firms find value in a firm Web site. Law firm Web sites Printed/online legal directory/listings Giving/hosting seminars Client meals/entertainment Print/online yellow pages Event sponsorships/community events Referral services Public/media relations/writing articles Sponsorship/placement on legal Web sites Paid-per-click placements on search engines Local outdoor advertising *Top 3 box score (Very Valuable, Valuable, Somewhat Valuable) Perceived Value of Marketing Tactics % Respondents that Indicated Tactic as Valuable*

30 30 ► In general, younger respondents tend to value law firm Web sites, referral services, paid-per-click placements, and sponsorships on legal Web sites more than older respondents. ► Generation gap is closed by tactics like print/online legal directory listings and client entertainment. Perceived value of marketing tactics often varies by age of respondent.* Firm Web sites Client entertainment Legal directory listings Event sponsorships Giving/ hosting seminars PR/ writing articles Referral services Local outdoor ads Paid-per-click placements Sponsorships on legal Web sites Yellow pages *Top 3 box score (Very Valuable, Valuable, Somewhat Valuable) Perceived Value of Marketing Tactics

31 31 Significance of Internet Marketing

32 32 Law firms are embracing the Internet to promote their practice, and are using the latest techniques to attract potential clients. 89% of firms perceive value to promoting their practice via a firm Web site (28% very valuable, 31% valuable, 30% somewhat valuable). Web sites are more prevalent among firms that spend more than $5K, compared to those that spend less (88% vs. 69%). Significance of Internet Marketing 20% of firms do not have a Web site ►50% use search engine optimization ►25% use paid placement on search engines ►12% use online advertising Base: Have firm Web site (n=770) 80% of firms have a Web site 20% of firms do not have a Web site ►6% use listings on Legal sites such as Martindale-Hubbell, FindLaw, etc. ►3% use blogs

33 33 Successful Marketing Tactics

34 34 Networking and word-of-mouth are still key to building a law practice, however, emerging activities are also prevalent in integrated marketing campaigns. Marketing Tactic % Respondents that Indicated Tactic as Valuable* % Mktg Budget Spent on Tactics Law Firm Web site89%13% Printed or Online Legal Directory Listings85%19% Public/Media Relations/Writing Articles79%5% Giving or Hosting Seminars78%6% Client Meals and Entertainment75%20% Print or Online Yellow Pages68%22% Events Sponsorships/Community Events68%7% Referral Services51%3% Sponsorships/Placements on Legal Web sites46%1% Local Outdoor Advertising30%3% Paid-per-click Placement on Search Engines37%2% What’s Working? * Top 3 box score (Very Valuable, Valuable, Somewhat Valuable)

35 35 Detailed Methodology

36 36 A study of small law firms was conducted by Harris Interactive on behalf of Martindale-Hubbell. A total of 967 interviews were conducted via an online survey between May 31 - June 27, 2005 among employees of small law firms (defined as having 20 or fewer employees). The length of the questionnaire was approximately 15 minutes. SAMPLE SELECTION Sample of current subscribers, past subscribers and non-subscribers was provided by Martindale-Hubbell. Qualified respondents for this study identified themselves as working as a sole practitioner or in a law firm with 20 or fewer lawyers and were either solely or partially responsible for the decision-making process of marketing their firm. ONLINE INTERVIEWING PROCEDURES Interviews were conducted using a self-administered, online questionnaire, via proprietary, Web-assisted interviewing software. The HPOL interviewing system permitted online data entry of interviews by the respondents. Questionnaires were programmed into the system with the following checks: 1. Question and response series 2. Skip pattern 3. Question rotation 4. Range checks 5. Mathematical checks 6. Consistency checks 7. Special edit procedures Detailed Methodology

37 37 Detailed Methodology (cont.) ONLINE INTERVIEWING PROCEDURES (cont’d) To maintain the reliability and integrity in the sample, each invitation contained a password that is uniquely assigned to that e-mail address. A respondent was required to enter the password at the beginning of the survey to gain access into the survey. Password protection ensured that a respondent completed the survey only one time. To increase the number of respondents in the survey and to improve overall response rates, up to two additional reminder invitations are typically mailed at 2-4 day intervals to those respondents who have not yet participated in the survey. To increase the number of respondents in the survey and to improve overall response rates, respondents were provided with a summary of some of the survey responses. This too was done via the Internet. Respondents were sent an email that provided them access to a Web site that contained the survey findings. As with the survey itself, this was a password protected site that was accessible for a limited period (1-2 weeks). All data were then tabulated, checked for internal consistency and processed by computer. A series of computer- generated tables were produced for each of the key sample groups that showed the results of each survey question, both by the total number of respondents and by the key subgroups.


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