Marketing Among Small Law Firms May 2008

Marketing Among Small Law Firms May 2008

Table of Contents Objectives and Methodology 3 Executive Summary 4
Key Findings Marketing Responsibility 10 Marketing Spend 13 Time Spent on Firm Marketing 24 Utilization of Marketing Tactics 27 Significance of Internet Marketing 35 Detailed Methodology and Demographics 41

Objectives and Methodology
In conducting this research, LexisNexis seeks to understand the marketing that small law firms undertake. This study is a duplicate of a previous study conducted by Harris Interactive in 2005 for comparative purposes. Harris Interactive conducted an online study among employees of small law firms (defined as having 20 or fewer attorneys) between August 30 and September 27, 2007. Twenty-eight respondents who are employed by firms with attorneys were removed for analytic purposes. All qualified respondents were either solely or partially responsible for the decision-making process of marketing their firms. Sample of current subscribers, past subscribers and non-subscribers was provided by LexisNexis. A total of 908 interviews were completed The survey was approximately 15 minutes in length. Percentages may not add to 100% due to rounding, or because “don’t know/not sure” responses are not shown.

Executive Summary 4 H A R R I S I N T E R A C T I V E
©2007, Harris Interactive Inc. H A R R I S I N T E R A C T I V E

Executive Summary Responsibility for Marketing the Firm
Partners continue to have primary responsibility for planning and executing marketing plans. More office managers and assistants are taking an active role in marketing decisions. In 9% of firms, outside sources (marketing consultant, marketing service provider, outside agency) have primary marketing responsibility, unchanged from 2005. Solo practitioners have increased the use of outside consultants by 29% and staff members other than a partner by 60% from 2005. Mid-size firms (2-5 attorneys) increased their reliance on other staff members by 17% from 2005. Larger firms (6+ attorneys) tend to rely less on a marketing consultant and more on other staff members, including marketing managers, in 2007 than they did in 2005.

Executive Summary (cont.)
Marketing Spend Percentage revenue allocated to marketing activities has increased slightly over the past two years. Overall, firms are spending at a consistent dollar level between 2005 and 2007. Solo practitioners: Increased their spending of 5% or more of revenue from 2005 (39% vs. 26%), and more than tripled their spending of 5% or more from 2002 (39% vs. 12%). Are spending at a consistent dollar level as compared to 2005. 2-5 attorney firms: More than doubled in their spending of 5% or more of revenue over the past five years (27% vs. 12%). Decreased their spending of over $10K (30% vs. 33%) since 2005. 6-10 attorney firms: Slightly increased their spending of 5% or more (14% vs. 12%) from 2005 and more than doubled from 2002 (14% vs. 6%). Decreased their spending of over $10K (39% vs. 46%) since 2005. 11-20 attorney firms: Followed the same pattern in allocating revenue to marketing activities in 2007 as in 2005. Increased their spending of over $50K (19% vs. 13%) since 2005.

Time Spent on Firm Marketing There have been no significant changes in 2007, as practicing law remains the primary activity of the firm, while marketing remains an important “non-law” activity. Firms with fewer than 10 attorneys report no change from 2005 as to how much time they spend on marketing activities. Firms with attorneys report a slight decrease from 2005 in the percentage of time they spend per week on marketing. This may be due to assigning these duties to others within the firm, thereby freeing up their time to focus on practicing law. Utilization of Marketing Tactics While firms still utilize proven marketing tactics such as yellow pages, legal listings, and client entertainment, they are increasing the use of firm Web sites and are embracing emerging technologies, such as blogs and paid placements on search engines to grow their practice. The size of the firm determines to what degree various marketing tactics are utilized. Smaller firms are most likely to use yellow pages and legal listings, whereas larger firms utilize client entertainment to a greater extent. However, while client entertainment is still the leading choice among firms with attorneys, it shows a significant drop from (23% vs. 32%). The perceived value of Web sites as the highest valued marketing tactic, regardless of firm size, has not changed over time.

Significance of Internet Marketing Law firms continue to use the Internet to promote their practice, and are using the latest techniques to attract potential clients. Search engine optimization has increased from 2005 (55% vs. 50%), and slightly more firms in 2007 use online legal sites to attract clients (14% vs. 12%). Four times as many firms report the use of blogs in 2007 as compared to 2005 (8% vs. 2%), indicating the desire to explore new methods in addition to traditional tactics to attract potential clients. Perceived Value of Marketing Tactics Networking and word-of-mouth continue to be integral to building a law practice; however, online activities are also prevalent in integrated marketing campaigns. Web sites are still considered a primary marketing tool for growing a firm’s practice, and more money is allocated towards this tactic than in 2005. Blogs are beginning to demonstrate value in attracting clients; however, it should be noted that very little revenue is allocated towards this activity (1%). While face-to-face interaction with potential clients is still important, client entertainment is decreasing in its value to attract potential clients, and less money is being allocated towards it from 2005.

Key Findings 9 H A R R I S I N T E R A C T I V E
©2007, Harris Interactive Inc. H A R R I S I N T E R A C T I V E

Marketing Responsibility

Partners Drive Marketing Decisions
Partners continue to have primary responsibility for planning and executing marketing plans. More office managers and assistants are taking an active role in marketing decisions, an increase of 27% from (14% vs. 11%). In 9% of firms, outside sources (marketing consultant, marketing service provider, outside agency) have primary marketing responsibility, unchanged from 2005. 2007 2005 Partner Member/associate/paralegal Office manager/assistant/ secretary Marketing consultant/ Marketing service provider/ Outside agency Marketing manager/ director/officer Other None

Marketing Responsibility By Firm Size
Solo practitioners have increased the use of outside consultants by 29% (9% vs. 7%) and administrative staff members (office managers, assistants and secretaries) by 60% (8% vs. 5%) from 2005. Mid-size firms (2-5 attorneys) also increased their reliance on administrative staff members by 17% (14% vs. 12%) from 2005. Larger firms (6+ attorneys) rely less on marketing consultants and more on other staff members, including marketing managers, in 2007 than they did in 2005. Firms with 6-10 attorneys increased their reliance on administrative staff members by 44% (23% vs. 16%). Firms with attorneys increased their reliance on marketing managers by 23% (16% vs. 13%). 2007 2005 Partner Member/associate/paralegal Office manager/assistant/ secretary Marketing consultant/ Marketing service provider/ Outside agency Marketing manager/ director/officer Other None

Marketing Spend

% Revenue Spend Among Total Law Firms
Revenue allocated to marketing activities increased in the 5%+ category and decreased in the 2% category in 2007 as compared to 2005. % of Revenue Spend on Marketing by Total Law Firms % of Firms % of Revenue

Dollar Spend Among Total Firms
Overall, firms are spending at a consistent level between 2005 and 2007. $ Spend on Marketing by Total Law Firms % of Firms $ Spent on Marketing

% Revenue Spend Among Solos
Solo practitioners have increased their spending of 5% or more by 50% (39% vs. 26%) since 2005. This has more than tripled from 2002. Spending of 2% or less has decreased by 24% (38% vs. 50%) while spending of 4% or more has increased by 45% (45% vs. 31%) since 2005. % of Revenue Spend on Marketing by Solo Practitioners % of Firms % of Revenue

Dollar Spend Among Solos
Overall, solo practitioners are spending at a consistent level between 2005 and 2007. $ Spend on Marketing by Solo Practitioners % of Firms $ Spent on Marketing

% of Revenue Spend on Marketing by 2-5 Attorney Firms
% Revenue Spend Among 2-5 Attorney Firms The amount of revenue allocated for firm marketing remains at a similar rate between 2005 and 2007. Smaller firms have more than doubled their spending of 5% or more over the past five years (27% vs. 12%). % of Revenue Spend on Marketing by 2-5 Attorney Firms % of Firms % of Revenue

$ Spend on Marketing by 2-5 Attorney Firms
Dollar Spend Among 2-5 Attorney Firms Marketing dollars budgeted for 2007 have remained consistent to 2005. Smaller firms have slightly decreased their spending of over $10K, down 9% in 2007 (30% vs. 33%). $ Spend on Marketing by 2-5 Attorney Firms % of Firms $ Spent on Marketing

% Revenue Spend Among 6-10 Attorney Firms Since 2005 there has been relatively little change in marketing spend among firms with 6-10 attorneys. Spending of 5% or more has increased slightly from 2005, up 17% (14% vs. 12%), and is up 133% from (14% vs. 6%). % of Revenue Spend on Marketing by 6-10 Attorney Firms % of Firms % of Revenue

Dollar Spend Among 6-10 Attorney Firms The firms marketing budget in 2007 has remained fairly consistent to 2005. The exception is that smaller firms have decreased their spending of over $10K down 15% since 2005 (39% vs. 46%). $ Spend on Marketing by 6-10 Attorney Firms % of Firms $ Spent on Marketing

% Revenue Spend Among Attorney Firms The percentage of firm revenue allocated to marketing activities in 2007 is following a consistent pattern with % of Revenue Spend on Marketing by Attorney Firms % of Firms % of Revenue

Dollar Spend Among Attorney Firms Overall spending rate in 2007 has decreased from 2005. The exception is larger firms have increased their spending of over $50K by 46% since 2005 (19% vs. 13%). $ Spend on Marketing by Attorney Firms % of Firms $ Spent on Marketing

Time Spent on Firm Marketing

Marketing Remains Among the Top “Non-Law” Activities
There have been no significant changes reported in 2007, as practicing law remains the primary activity of the firm, while marketing remains an important “non-law” activity. 2007 2005 8%

Top “Non-Law” Activities By Firm Size
Firms with 10 or fewer attorneys report no change in 2007 in time spent on marketing activities. Solo practitioners report an increase of 23% in time spent on managing their practice (16% vs. 13%). Firms with attorneys report a slight decrease from 2005 in the percentage of time spent on marketing. 11-20 Attorney Firms 1-10 Attorney Firms Time Spent in 2007 Time Spent in 2005 11-20 Attorney Firms 1-10 Attorney Firms Marketing/Business development Practicing law Managing the practice Conducting research Professional/Personal development Other

Utilization of Marketing Tactics

% Spend on Marketing Tactics
Directories and Client Interaction Remain the Preferred Tactics Over time, yellow pages, legal listings, client entertainment, and firm Web sites remain the top marketing tactics utilized among law firms. Spending on firm Web sites has increased 23% (16% vs. 13%) from 2005. Attorneys are embracing emerging technologies (such as pay-per-click and blogs) in their marketing mix. % Spend on Marketing Tactics Yellow pages Legal listings Client entertainment Firm Web sites Event sponsorships Giving/ hosting seminars PR/ writing articles Referral services Pay-per-click placements Local outdoor ads Sponsorships on legal Web sites Blogs

How Size Affects Choice of Marketing Tactics
Smaller firms (1-5 attorneys) Firms with 2-5 attorneys have increased their spending on their Web sites from 2005 by 64% (18% vs. 11%), but have allocated less of their budget for client entertainment, down 21% (15% vs. 19%). 2-5 attorney firms have decreased their yellow pages spend by 16% (21% vs. 25%). Solo practitioners spend more on pay-per-click than larger firms (4% vs. 1%); they have also doubled their spending on sponsorships on legal Web sites (2% vs. 1%) since 2005. Larger firms (6-20 attorneys) Firms with attorneys have decreased their spending on client meals and entertainment by 28% (23% vs. 32%) since However, it is still a primary activity within their budgets as compared to smaller firms. Firms with attorneys also tend to spend more on event sponsorships, than smaller firms. Spending on event sponsorships among firms with 11 to 20 attorneys has increased by 18% (13% vs. 11%) since 2005. Firms with 6-10 attorneys have decreased their spending on outdoor advertising by half (2% vs. 4%) since 2005. With regard to live networking opportunities, 6-10 attorney firms have increased spend on event sponsorships by 25% (10% vs. 8%), but decreased client entertainment by 10% (27% vs. 30%) since 2005.

Current % Spending on Marketing Tactics Among Solos
Over time, yellow pages, legal listings, client entertainment, and firm Web sites are still top marketing tactics utilized by solo practitioners. Spending on yellow pages listings has decreased slightly from 2005, while spending on legal directories, client entertainment, and firm Web sites have experienced a slight increase. Spending on online tactics has doubled, with both pay-per-click (4% vs. 2%) and sponsorships on legal Web sites (2% vs. 1%) increasing by 100% from 2005. Current % Spending on Marketing Tactics Among Solos Yellow pages Legal directory listings Client entertainment Firm Web sites Event sponsorships Giving/ hosting seminars Referral services Pay-per-click placements PR/ writing articles Sponsorships on legal Web sites Local outdoor ads Blogs

Current % Spending on Marketing Tactics Among Firms with 2-5 Attorneys
Yellow pages, legal directory listings, firm Web sites, and client entertainment are still important tactics among firms with 2-5 attorneys. Spending on firm Web sites is up 64% (18% vs. 11%) from 2005. Spending on yellow pages listings, legal directory listings, and client entertainment decreased from 2005 to 2007, while spending on firm Web sites has increased. Current % Spending on Marketing Tactics Among Firms with 2-5 Attorneys Yellow pages Legal directory listings Firm Web sites Client entertainment Event sponsorships Giving/ hosting seminars PR/ writing articles Referral services Pay-per-click placements Local outdoor ads Sponsorships on legal Web sites Blogs

Current % Spending On Marketing Tactics Among Firms with 6-10 Attorneys
Client entertainment, yellow pages, legal directory listings, and firm Web sites are still the preferred marketing tactics among firms with 6-10 attorneys. There is less spending on client entertainment in 2007 than in 2005, although spending on yellow pages and legal directory listings has risen slightly. Spending on firm Web sites remains unchanged from 2005. Current % Spending on Marketing Tactics Among Firms with 6-10 Attorneys Local outdoor ads Pay-per-click placements Sponsorships on legal Web sites Client entertainment Yellow pages Legal directory listings Firm Web sites Event sponsorships Giving/ hosting seminars PR/ writing articles Referral services Blogs

Current % Spending On Marketing Tactics Among Firms with 11-20 Attorneys
Client entertainment, firm Web sites, event sponsorship, legal listings, and yellow pages are still important marketing tactics to larger firms. Spending on client entertainment has decreased by 28% (23% vs. 32%) since 2005. Spending on firm Web sites, event sponsorships, legal directory listings, and yellow pages has risen since Current % Spending on Marketing Tactics Among Firms with Attorneys Client entertainment Firm Web sites Event sponsorships Legal directory listings Yellow pages Giving/ hosting seminars PR/ writing articles Referral services Pay-per-click placements Local outdoor ads Sponsorships on legal Web sites Blogs

% Respondents that Indicated Tactic as Valuable*
Perceived Value of Marketing Tactics Networking and word-of-mouth tactics are still integral to building a law practice; however, online activities are also prevalent in integrated marketing campaigns. The perceived value of Web sites as a primary marketing tool for growing a practice, regardless of firm size, has remained consistent over time. Most other marketing tactics have slightly lesser perceived value than in 2005. 2007 2005 % Respondents that Indicated Tactic as Valuable* Law firm Web sites Printed/online legal directory/listings Public/media relations/writing articles Client meals/entertainment Print/online yellow pages Event sponsorships/community events Referral services Giving/hosting seminars Sponsorship/placement on legal Web sites Pay-per-click placements on search engines Local outdoor advertising Writing/hosting a blog N/A *Top 3 box score (Very Valuable, Valuable, Somewhat Valuable)

Significance of Internet Marketing

Internet Marketing Among Total Firms
Law firms continue to use the Internet to promote their practice and are using the latest techniques to attract potential clients. Search engine optimization has increased 10% from 2005 (55% vs. 50%), and slightly more firms in use online advertising to attract clients, up 17% (14% vs. 12%). Four times as many firms report the use of blogs (8% vs. 2%) to attract potential clients, up 30% from 8% use blogs 55% use search engine optimization 24% use paid placement on search engines 14% use online advertising Base: Have firm Web site (n=690) 2007 22% of firms do not have a Web site 78% of firms have a Web site 2005 50% use search engine optimization 24% use paid placement on search engines 12% use online advertising Base: Have firm Web site (n=770) 2% use blogs 80% of firms have a Web site 20% of firms do not have a Web site

Solo Practitioners 2007 2005 68% of firms have a Web site
Search engine optimization has increased by 8% from 2005 (52% vs. 48%). Four times as many solo firms report the use of blogs (8% vs. 2%) to attract potential clients. 2007 52% use search engine optimization 28% use paid placement on search engines 15% use online advertising Base: Have firm Web site (n=225) 8% use blogs 32% of firms do not have a Web site 68% of firms have a Web site 2005 48% use search engine optimization 28% use paid placement on search engines 14% use online advertising Base: Have firm Web site (n=229) 2% use blogs 27% of firms do not have a Web site 73% of firms have a Web site

Firms with 2-5 Attorneys 2007 2005 80% of firms have a Web site
Search engine optimization has increased by 20% from 2005 (60% vs. 50%). More than four times as many 2-5 attorney firms report the use of blogs (9% vs. 2%) to attract potential clients. 60% use search engine optimization 25% use paid placement on search engines 15% use online advertising Base: Have firm Web site (n=304) 9% use blogs 2007 20% of firms do not have a Web site 80% of firms have a Web site 50% use search engine optimization 26% use paid placement on search engines 12% use online advertising Base: Have firm Web site (n=372) 2% use blogs 2005 20% of firms do not have a Web site 80% of firms have a Web site

Search engine optimization and the use of blogs have remained consistent with 2005 (50% and 3% respectively). The use of paid placement on search engines and online advertising in 6-10 attorney firms have decreased slightly since 2005. 50% use search engine optimization 17% use paid placement on search engines 10% use online advertising Base: Have firm Web site (n=105) 3% use blogs 2007 7% of firms do not have a Web site 93% of firms have a Web site 2005 50% use search engine optimization 18% use paid placement on search engines 12% use online advertising Base: Have firm Web site (n=113) 3% use blogs 12% of firms do not have a Web site 88% of firms have a Web site

Search engine optimization has declined by 9% from 2005 (50% vs. 55%). The use of blogs to attract potential clients in attorney firms has increased by 40% since 2005 (7% vs. 5%). 50% use search engine optimization 18% use paid placement on search engines 13% use online advertising Base: Have firm Web site (n=56) 7% use blogs 2007 2% of firms do not have a Web site 98% of firms have a Web site 55% use search engine optimization 11% use paid placement on search engines 4% use online advertising Base: Have firm Web site (n=56) 5% use blogs 2005 8% of firms do not have a Web site 92% of firms have a Web site

Detailed Methodology A study of small law firms was conducted by Harris Interactive on behalf of LexisNexis. A total of 908 interviews were conducted via an online survey between August 30 and September 27, 2007 among employees of small law firms (defined as having 20 or fewer attorneys). The length of the questionnaire was approximately 15 minutes. SAMPLE SELECTION Sample of current subscribers, past subscribers and non-subscribers was provided by LexisNexis. Qualified respondents for this study identified themselves as working as a solo practitioner or in a law firm with 20 or fewer attorneys 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 (cont.)
ONLINE INTERVIEWING PROCEDURES (cont’d) To maintain the reliability and integrity in the sample, each invitation contained a password that was uniquely assigned to that 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 were typically mailed at 2-4 day intervals to those respondents who had not yet participated in the survey. 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.

Demographics of Respondents - 2007
Size of Firm Main Area of Practice 38% 43% 13% 6% Only responses of 5% or more are shown. Gender Age Region

Demographics of Respondents - 2005
Size of Firm Main Area of Practice Only responses of 5% or more are shown. Gender Age Region

Marketing Among Small Law Firms May 2008

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Marketing Among Small Law Firms May 2008

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