A recent article in The Recorder by Zusha Elinson, Competition Fuels Marketing Budgets has garnered a lot of attention in the blogosphere. According to Elinson, growth in expenses for marketing at top law firms in the last year was much greater than the growth in profits and revenues, impressive as those financials have been. The article focused on the results of a new survey by Boston-based BTI Consulting Group, which polled about 60 percent of Am Law 200 firms.
According to the survey results, Am Law 100 firms spent about $14,000 per attorney and $56,000 per equity partner on marketing last year. Marketing staff salaries ate up the largest portion of the budgets, with most big firms bulking up their staff significantly last year. Similar trends were found within the Second Hundred Am Law firms (those ranked 101 to 200), but with slight differences. Smaller firms place more emphasis on individual clients, while the top 100 firms look at the markets more broadly. One sign of this is that the smaller firms spent more money on business development than on marketing salaries and advertising campaigns.
In the 2006 Law Firm Business Development Practices Survey, conducted and published last year by ALM Research and Brand Research, similar differences were found between the larger and smaller firms, though the population for the “Bus Dev” survey was slightly different: 54% were “Tier 1,” firms that appear on Am Law 200, Global 100, and/or NLJ 250 lists, while the other 46% were “Tier 2” firms averaging 122 lawyers and $200 to $499 million in revenue. Some of the key findings in the 2006 survey, which is still available via ALM Research Online, included the fact that, for the second year in a row, the majority reported that CMOs or marketing directors had key responsibility for business developing, including planning budgets and strategy; budgets for marketing and business development ($3 million to $4.99 million for Tier 1 firms; $500,000 to $999,000 for Tier 2 firms) had grown substantially from the previous year, as did staff; and, as in the previous year respondents indicated that, on average, about two-thirds of the budget was directed to developing new business with existing clients, while about one-third was devoted to developing new clients.
