Legal Marketing Spend & Client Dissatisfaction

Posted by Editor Kristi Heidel

The following is an excerpt from Mark A. Cohen, Legal Marketing Spend Is Up—So Is Client Dissatisfaction. Now What?, Forbes (Apr 17, 2017).

Corporate legal departments and a growing array of well capitalized, tech and process savvy service providers now account for an almost 50% of legal spend. It’s not surprising, then, that law firms are stepping up investment in marketing and business development activities.

A joint study conducted by the Legal Marketing Association (LMA) and Bloomberg Law found that more than two-thirds of attorneys and business development professionals agree their firm is increasing its emphasis on marketing and business development– only 6% disagree. Nearly half of those surveyed report their marketing budgets will increase more than 10% over the next two years, even as firms continue to engage in belt synching to prop up profit-per-partner (PPP). … Jacking up marketing and sales spend will only yield a positive return on investment for firms if they: (1) tackle client dissatisfaction; and (2) differentiate themselves. These will be the linchpins of success.

Failure of Communication

A recent study of the British legal market commissioned by LexisNexis and Judge Business School at Cambridge University contains a stark finding: ‘There is unambiguous evidence of a significant and persistent disconnect between law firms and their clients.’ The disconnect has resulted in a steady migration of work from firms to corporate legal departments as well as a growing client receptivity to service providers and other non-traditional sources for legal services.

The LexisNexis survey cites three persistent causes of the client/firm disconnect: (1) clients want solutions and law firms offer advice; (2) law firms strive for perfection while clients generally want a ‘good enough’ basis to solve a problem–this varies with the value a client assigns to a matter; and (3) law firms fail to provide cost and time predictability–they have not invested in project and process management capability that is common among their clients (and, more recently, in-house legal departments).

…40% of clients in the LexisNexis survey noted that senior partners of their law firms lacked more than a basic knowledge of their businesses. …Add to that client dissatisfaction with firm cost, incremental delivery improvement, and law firms’ failure to take an enterprise approach to client matters rather than a transactional one, and you’ve got quite a list of client gripes.

Differentiation & Herd Mentality

If you look at a random sampling of large law firm websites you will see common language—‘we partner with our clients;’ ‘we are value driven;’ ‘we have assembled top talent that handle some of the most complex matters;’…What’s conspicuously absent is any evidence of differentiation—as to expertise, results, efficient use of technology, process/project management, client service, knowledge of clients’ businesses, fee flexibility, etc. Also absent is reference to customer satisfaction and data to back it up. Most firms believe they provide outstanding service. The 2015 Lexis Nexis Bellweather Report highlighted another perception gap between firms and clients– 80% of lawyers responded they’re good at client service while only 40% of clients said they received good service from their lawyers.

Conclusion

 Law firms are smart to increase marketing and business development budgets. That investment should start with a frank assessment of how the firm identifies itself in the marketplace and how—if at all–it is differentiated from its peer group. That assessment should be shared with clients and the broader marketplace to prevent a perception gap. There’s little to market if firms don’t confront the causes of client dissatisfaction and demonstrate a commitment to rectify them. That’s the most effective marketing of all.

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