Do More with Less and Gain Market Share

While there may be little comfort in knowing that many firms of all sizes are in your same boat, there can be comfort in identifying ways firms are coming out ahead despite the economy. Today, savvy firms are finding opportunities to gain market share.

A New Focus on Being Efficient and Effective

As the chief marketing officers in the BTI study geared up for 2009, their focuses shifted to deepening client relationships and business development as their top priorities. Attorneys, particularly practice group leaders, will be expected to take a more hands-on role in the processes, with an anticipated average spend increase in this area of 4% to 6% each year from 2010 through 2012. At the same time, shrinking business development and marketing departments with smaller budgets are concentrating resources on programs that provide maximum impact and can be built into an infrastructure and process rather than one-off projects. They can no longer dedicate abundant staff to a project with a singular desired outcome. Firms are rethinking how they can reuse material and how they can be smarter about sharing information. How can they do a better job of keeping up to date? Furthermore, how can they provide tools and resources that make it easy for attorneys themselves to do a bit more of the work?

Just as copper wire has been replaced by the mobile phone in telecommunications, technology available today is fundamentally transforming how firms develop and implement their client development strategies. But just because the technology exists doesn't mean it's easy. Internal and external content, like bios, market data and materials, proposals, contacts and firm information are managed in multiple systems. Organizational data and processes related to lawyers, practices, support staff and others need to be aligned across an increasingly complex organization. And marketing now includes a firm's interaction with a diverse set of target audiences, from the firm and its clients to referrals, alumni, prospects, recruits and even the media. These evolving complexities are driving newer technologies to simplify how all of this work is managed and accomplished. Firms leveraging these technologies are better positioned to seize opportunities today.

Technology Transforms Client Development

In recent conversations with firms across the country, many expressed a desire to understand, identify and focus on the opportunities most likely to be materially beneficial to the firm ' either where they have a better chance of winning, or where a single piece of work can be repurposed in various ways because it has applications across the firm's practices, geography or unique services, for example. Efficient execution of selected opportunities brings in the win. With investments in technological improvements in these two areas, firms can get more work done with fewer people ' in today's economy and in the long run. First, let's look at technologies that can help firms focus on better opportunities from four critical lenses: the market, relationships, experience and profitability.

The Market

Whether it's a regulatory change or a personnel change, a consolidation or divestiture, a new technology or an emerging strong competitor, new market opportunities or events that could be doors to new revenue for your firm occur almost every day. The key is to know when they happen. In a world filled with information, how do you dissect the data in a way that allows you to know what small nuggets are actionable and aligned with your firm's strategies and goals? A variety of information and technology providers have created tools that allow firms to filter and analyze event information in a way that helps them to understand where opportunities are in the marketplace at any given time. More importantly, some of these solutions also allow the firm to understand how well the opportunities match with the capacities and skill sets of the firm itself.

Solutions like OneSource, West Monitor Suite and CourtLink help firms identify those changes in the market, as do news services like Dow Jones. Other companies, such as ShiftCentral, provide outsourced services that track and analyze information for a firm on a daily basis. By implementing solutions like these, firms can filter information much more efficiently, so they are reacting to only the best, targeted opportunities at any given time.

However, with such solutions in the market, everybody now has access to the same news articles using similar tools. Where, then, is the edge? The winner now becomes the firm that not only gets the information the fastest, but also can immediately turn that information into actionable intelligence ' for instance, by identifying and leveraging a relationship and leveraging that relationship to begin a dialogue with the impacted company. Another example would be using technology to quickly developing client outreach campaigns, using alerts, mini-sites and blogs to communicate your firm's expertise in a particular area.

Relationships

As most firms know, the two most valuable assets of any practice are, number one, the legal experience of the firm's attorneys, and number two, relationships those attorneys and others in the firm have with companies and individuals outside the firm. Traditionally, a firm may have considered its relationships in one of two buckets ' past clients and current clients. Increasingly, however, firms are being more creative with the identification of personal relationships, business relationships, indirect relationships and others in order to identify new business opportunities.

Three different yet complementary approaches can help a firm track its myriad relationships. The first is alumni tracking. There is no better way to cultivate a relationship with a company than to remain engaged with a former firm associate, partner or administrator who now is employed at the target company. Free technologies such as LinkedIn, Facebook, Classmates.com, and firm- and university-specific alumni sites have made alumni tracking more doable, although perhaps not exactly simple.

A second approach, customer relationship management or CRM technology, has seen a renewed interest on the part of firms looking to do a better job of getting their attorneys and staff to track activities, events and interactions. While some firms have found great success with this type of tool, most of the others struggle. The issue is not with the tool itself, but because the onus of data entry is on the part of the attorney or staff person. And CRM data entry is often not a priority.

A third and emerging technology has seen exceedingly fast adoption rates because it compensates for some of the gaps in the older CRM model. It is called ERM, or enterprise relationship management. ERM systems enable a firm to understand its extended relationship network, leveraging strategic relationships to grow business in a single office or across multiple locations. These systems, like ContactNet, the market leader, and BranchIt, analyze internal data, including address books, CRM systems, e-mail traffic patterns, human resource records, and time and billing systems to understand and map all relevant relationships.

This low-cost, lightweight solution fits the unique culture of each firm and requires little time or energy on the part of its personnel because it uses passive relationships or passive data entry ' data that already exists inside the firm. For example, if your firm identifies an opportunity at Goldman Sachs but has never done work with the company before, an ERM system could easily identify individuals in your firm who have strong e-mail relationships with people inside Goldman Sachs ' their names, contact information, strength of the relationship and when contact was last made. Some ERM systems also allow firms to import data from individual relationship management products, like LinkedIn.

ERMs extract valuable relationship information using powerful authority files that know, for example, if you are connected to someone from ESPN.com or BuentaVista.com, you actually have a relationship with their parent company, Disney. Or, contacts with e-mail addresses @gs.com are Goldman Sachs employees. Because relationships are uniquely tailored to an individual firm, ERM systems get at the heart of true differentiation from the competition when targeting new business ' the ability to navigate information or an environment based on the attorneys' skills and their unique relationship contacts.

Experience

Understanding a client's market and cultivating strong relationships are critical components to the success of firms today. However, it is also important to have a grasp on the experience and expertise your firm can bring to bear for clients. In an increasingly competitive market, law firms must clearly demonstrate specific, recent and relevant experience in order to be in consideration for new work. Yet too often, a firm's ability to access important experience information takes time and is a cumbersome process. In many cases, such endeavors involve firm-wide requests or interviewing various individuals across the organization.

Some firms are taking the guesswork out of accessing experience information by leveraging or creating matter, skills or experience databases. These databases often integrate with other systems ' like CRM, proposal or financial systems ' in order to pull work content relevant to client and business development searches. The end result is the ability for firms to identify experience by practice group, industry, client, geography or by attorney, thereby enabling more efficient and proactive responses to new business opportunities. Once collected, this data can also be leveraged for outbound marketing, including case studies on Web sites, and targeted client communications.

Profitability

Once identified, opportunities need to be filtered. Not all opportunities are equal; some are more profitable or appealing in other ways. The staffing configuration of a particular practice model or the geographic disbursement of a particular matter can make the work more or less attractive than another, even if the revenue opportunity is relatively the same.

Products like Redwood Analytics and Elite's Business Intelligence solution are helping firms analyze internal business information and consider comparables when analyzing opportunities. Other products, such as Hildebrandt Peer Monitor, allow firms to benchmark themselves against the competition as it relates to rates, utilization, leverage and other factors.

The key in all of this activity for smart marketing and business development departments is to work closely with the finance function to ensure it is spending its energy and budget on matters that will ultimately be the most financially lucrative to the firm. The benefit is two-fold: 1) decisions are based on facts and numbers, which provide a dispassionate explanation as to why certain efforts are or are not pursued; and 2) it demonstrates a fiduciary responsibility on the part of business development staff that can build credibility with finance personnel, as well as a strong internal working relationship and greater understanding on the part of finance to the goals and strategies of business development.

The pressure on your finance colleagues is considerably greater these days. They will do what is right for the firm, but they also will be more comfortable with what they understand.

What's Next? Improved Collaboration

The best opportunities ' those your firm can't miss on ' fall inside the intersection of these four areas: the market, relationships, experience and profitability. The ability to execute exceptionally well on those “hot spot” opportunities is driven by the integration of the technology tools that have been developed for each, enabling them to work seamlessly together. This is the solution breakthrough.

Smart firms are taking technology solutions one step further. They are looking at solutions that can work together and then teaming business development staff with the information technology people to place it all on a single interface. Rather than jumping from one system to another ' the Web site, to the CRM, to the ERM, to the competitive intelligence solution, to the alumni site, to the blog, to the e-newsletter ' in order to execute on an opportunity, firms can manage their marketing and client development activities from a single point of entry. Microsoft SharePoint has been instrumental in enabling firms to integrate and share critical information in intelligent ways across the firm through initiatives like firm-wide intranets or more collaborative client portals.

Conclusion

The current economic situation is forcing firms to think of new ways to market themselves, which likely will become the new norm, long after the downturn is history. Integration of technology tools will be the key to successful efforts focused on the market, relationships, experience and profitability, and aligned with the firm's objectives. Engaged attorneys, marketing and client development staff, and IT personnel will need to work collaboratively to create and use the tools that increase the potential for more wins. Firms that are laying the foundation today will have a leg up tomorrow.

Preston McKenzie is vice president and general manager of Client Development for Hubbard One, a Thomson Reuters business that provides video marketing and business development solutions for law firms and other professional services. Mr. McKenzie is a member of the Hildebrandt Institute Faculty and the Legal Marketing Association Service Providers Committee, founder of West Monitor Suites, and a frequent speaker on law firm client development and growth strategies. Phone: 651-848-8739; e-mail: [email protected].

If you are finding that the attorneys in your firm are becoming more focused on client development and retention efforts, you are not alone. Firms as a whole are refocusing their marketing and business development efforts to concentrate on existing rather than new clients. In today's economy, every opportunity counts, and existing relationships are critical. The challenge is to find new ways to seize opportunities despite fewer resources and flat budgets.

In a recent market study conducted by The BTI Consulting Group, 120 legal marketing executives interviewed from AmLaw 100 and AmLaw 101-200 firms anticipated an average decrease in spending of nearly 42% in advertising and 18% in sponsorships in 2009. With the reduction in spending also comes headcount reduction. The same firms that greatly expanded marketing and business development staffing between 2002 and 2007 are finding themselves with freezes on such hires and in some cases, cuts. Ironically, despite the freeze in hiring and budgets, there is more attention on marketing and business development, creating a need to do more with less.

Law firms of all sizes are feeling it. Whether it's a large firm with static growth in marketing resources, a lean mid-sized firm forced to do more with less, or a small firm with one person doing the job of four, they all face the same challenges. Ironically, despite the freeze in hiring and budgets, there is more attention on marketing and business development, creating a need to be able to do more with less.

While there may be little comfort in knowing that many firms of all sizes are in your same boat, there can be comfort in identifying ways firms are coming out ahead despite the economy. Today, savvy firms are finding opportunities to gain market share.

A New Focus on Being Efficient and Effective

As the chief marketing officers in the BTI study geared up for 2009, their focuses shifted to deepening client relationships and business development as their top priorities. Attorneys, particularly practice group leaders, will be expected to take a more hands-on role in the processes, with an anticipated average spend increase in this area of 4% to 6% each year from 2010 through 2012. At the same time, shrinking business development and marketing departments with smaller budgets are concentrating resources on programs that provide maximum impact and can be built into an infrastructure and process rather than one-off projects. They can no longer dedicate abundant staff to a project with a singular desired outcome. Firms are rethinking how they can reuse material and how they can be smarter about sharing information. How can they do a better job of keeping up to date? Furthermore, how can they provide tools and resources that make it easy for attorneys themselves to do a bit more of the work?

Just as copper wire has been replaced by the mobile phone in telecommunications, technology available today is fundamentally transforming how firms develop and implement their client development strategies. But just because the technology exists doesn't mean it's easy. Internal and external content, like bios, market data and materials, proposals, contacts and firm information are managed in multiple systems. Organizational data and processes related to lawyers, practices, support staff and others need to be aligned across an increasingly complex organization. And marketing now includes a firm's interaction with a diverse set of target audiences, from the firm and its clients to referrals, alumni, prospects, recruits and even the media. These evolving complexities are driving newer technologies to simplify how all of this work is managed and accomplished. Firms leveraging these technologies are better positioned to seize opportunities today.

Technology Transforms Client Development

In recent conversations with firms across the country, many expressed a desire to understand, identify and focus on the opportunities most likely to be materially beneficial to the firm ' either where they have a better chance of winning, or where a single piece of work can be repurposed in various ways because it has applications across the firm's practices, geography or unique services, for example. Efficient execution of selected opportunities brings in the win. With investments in technological improvements in these two areas, firms can get more work done with fewer people ' in today's economy and in the long run. First, let's look at technologies that can help firms focus on better opportunities from four critical lenses: the market, relationships, experience and profitability.

The Market

Whether it's a regulatory change or a personnel change, a consolidation or divestiture, a new technology or an emerging strong competitor, new market opportunities or events that could be doors to new revenue for your firm occur almost every day. The key is to know when they happen. In a world filled with information, how do you dissect the data in a way that allows you to know what small nuggets are actionable and aligned with your firm's strategies and goals? A variety of information and technology providers have created tools that allow firms to filter and analyze event information in a way that helps them to understand where opportunities are in the marketplace at any given time. More importantly, some of these solutions also allow the firm to understand how well the opportunities match with the capacities and skill sets of the firm itself.

Solutions like OneSource, West Monitor Suite and CourtLink help firms identify those changes in the market, as do news services like Dow Jones. Other companies, such as ShiftCentral, provide outsourced services that track and analyze information for a firm on a daily basis. By implementing solutions like these, firms can filter information much more efficiently, so they are reacting to only the best, targeted opportunities at any given time.

However, with such solutions in the market, everybody now has access to the same news articles using similar tools. Where, then, is the edge? The winner now becomes the firm that not only gets the information the fastest, but also can immediately turn that information into actionable intelligence ' for instance, by identifying and leveraging a relationship and leveraging that relationship to begin a dialogue with the impacted company. Another example would be using technology to quickly developing client outreach campaigns, using alerts, mini-sites and blogs to communicate your firm's expertise in a particular area.

Relationships

As most firms know, the two most valuable assets of any practice are, number one, the legal experience of the firm's attorneys, and number two, relationships those attorneys and others in the firm have with companies and individuals outside the firm. Traditionally, a firm may have considered its relationships in one of two buckets ' past clients and current clients. Increasingly, however, firms are being more creative with the identification of personal relationships, business relationships, indirect relationships and others in order to identify new business opportunities.

Three different yet complementary approaches can help a firm track its myriad relationships. The first is alumni tracking. There is no better way to cultivate a relationship with a company than to remain engaged with a former firm associate, partner or administrator who now is employed at the target company. Free technologies such as LinkedIn, Facebook, Classmates.com, and firm- and university-specific alumni sites have made alumni tracking more doable, although perhaps not exactly simple.

A second approach, customer relationship management or CRM technology, has seen a renewed interest on the part of firms looking to do a better job of getting their attorneys and staff to track activities, events and interactions. While some firms have found great success with this type of tool, most of the others struggle. The issue is not with the tool itself, but because the onus of data entry is on the part of the attorney or staff person. And CRM data entry is often not a priority.

A third and emerging technology has seen exceedingly fast adoption rates because it compensates for some of the gaps in the older CRM model. It is called ERM, or enterprise relationship management. ERM systems enable a firm to understand its extended relationship network, leveraging strategic relationships to grow business in a single office or across multiple locations. These systems, like ContactNet, the market leader, and BranchIt, analyze internal data, including address books, CRM systems, e-mail traffic patterns, human resource records, and time and billing systems to understand and map all relevant relationships.

This low-cost, lightweight solution fits the unique culture of each firm and requires little time or energy on the part of its personnel because it uses passive relationships or passive data entry ' data that already exists inside the firm. For example, if your firm identifies an opportunity at Goldman Sachs but has never done work with the company before, an ERM system could easily identify individuals in your firm who have strong e-mail relationships with people inside Goldman Sachs ' their names, contact information, strength of the relationship and when contact was last made. Some ERM systems also allow firms to import data from individual relationship management products, like LinkedIn.

ERMs extract valuable relationship information using powerful authority files that know, for example, if you are connected to someone from ESPN.com or BuentaVista.com, you actually have a relationship with their parent company, Disney. Or, contacts with e-mail addresses @gs.com are Goldman Sachs employees. Because relationships are uniquely tailored to an individual firm, ERM systems get at the heart of true differentiation from the competition when targeting new business ' the ability to navigate information or an environment based on the attorneys' skills and their unique relationship contacts.

Experience

Understanding a client's market and cultivating strong relationships are critical components to the success of firms today. However, it is also important to have a grasp on the experience and expertise your firm can bring to bear for clients. In an increasingly competitive market, law firms must clearly demonstrate specific, recent and relevant experience in order to be in consideration for new work. Yet too often, a firm's ability to access important experience information takes time and is a cumbersome process. In many cases, such endeavors involve firm-wide requests or interviewing various individuals across the organization.

Some firms are taking the guesswork out of accessing experience information by leveraging or creating matter, skills or experience databases. These databases often integrate with other systems ' like CRM, proposal or financial systems ' in order to pull work content relevant to client and business development searches. The end result is the ability for firms to identify experience by practice group, industry, client, geography or by attorney, thereby enabling more efficient and proactive responses to new business opportunities. Once collected, this data can also be leveraged for outbound marketing, including case studies on Web sites, and targeted client communications.

Profitability

Once identified, opportunities need to be filtered. Not all opportunities are equal; some are more profitable or appealing in other ways. The staffing configuration of a particular practice model or the geographic disbursement of a particular matter can make the work more or less attractive than another, even if the revenue opportunity is relatively the same.

Products like Redwood Analytics and Elite's Business Intelligence solution are helping firms analyze internal business information and consider comparables when analyzing opportunities. Other products, such as Hildebrandt Peer Monitor, allow firms to benchmark themselves against the competition as it relates to rates, utilization, leverage and other factors.

The key in all of this activity for smart marketing and business development departments is to work closely with the finance function to ensure it is spending its energy and budget on matters that will ultimately be the most financially lucrative to the firm. The benefit is two-fold: 1) decisions are based on facts and numbers, which provide a dispassionate explanation as to why certain efforts are or are not pursued; and 2) it demonstrates a fiduciary responsibility on the part of business development staff that can build credibility with finance personnel, as well as a strong internal working relationship and greater understanding on the part of finance to the goals and strategies of business development.

The pressure on your finance colleagues is considerably greater these days. They will do what is right for the firm, but they also will be more comfortable with what they understand.

What's Next? Improved Collaboration

The best opportunities ' those your firm can't miss on ' fall inside the intersection of these four areas: the market, relationships, experience and profitability. The ability to execute exceptionally well on those “hot spot” opportunities is driven by the integration of the technology tools that have been developed for each, enabling them to work seamlessly together. This is the solution breakthrough.

Smart firms are taking technology solutions one step further. They are looking at solutions that can work together and then teaming business development staff with the information technology people to place it all on a single interface. Rather than jumping from one system to another ' the Web site, to the CRM, to the ERM, to the competitive intelligence solution, to the alumni site, to the blog, to the e-newsletter ' in order to execute on an opportunity, firms can manage their marketing and client development activities from a single point of entry. Microsoft SharePoint has been instrumental in enabling firms to integrate and share critical information in intelligent ways across the firm through initiatives like firm-wide intranets or more collaborative client portals.

Conclusion

The current economic situation is forcing firms to think of new ways to market themselves, which likely will become the new norm, long after the downturn is history. Integration of technology tools will be the key to successful efforts focused on the market, relationships, experience and profitability, and aligned with the firm's objectives. Engaged attorneys, marketing and client development staff, and IT personnel will need to work collaboratively to create and use the tools that increase the potential for more wins. Firms that are laying the foundation today will have a leg up tomorrow.

Preston McKenzie is vice president and general manager of Client Development for Hubbard One, a Thomson Reuters business that provides video marketing and business development solutions for law firms and other professional services. Mr. McKenzie is a member of the Hildebrandt Institute Faculty and the Legal Marketing Association Service Providers Committee, founder of West Monitor Suites, and a frequent speaker on law firm client development and growth strategies. Phone: 651-848-8739; e-mail: [email protected].