The Future of the Profession Lies in Its Past

The alternative title of this article is “Professional Services Marketing 3.0.” Why? Because in this rapidly changing economic environment, intensely competitive landscape, and highly charged electronics age, it's the best way to define significant evolution from one distinct professional services marketing and management period to the next. And when you understand that evolutionary process, you can better and perhaps more accurately project the future of not only professional services marketing, but of the profession itself as well. Competition and evolution are exactly what's happened ' and will continue to happen ' in law firm marketing. And significantly, in firm practices, business models, and structure as well.

How It All Began

The first stage of contemporary practice ' call it Professional Services Marketing 1.0 ' was the U.S. Supreme Court's decision in Bates v. State Bar of Arizona, which, in 1977, struck down the long-standing and traditional Codes of Ethics and Rules of Professional Conduct that prohibited what we now call “frank marketing,” or any form of promotion or commercialization. In one stroke, it wiped out the many generations of practice development achieved almost solely by social contact. The word “compete” was long considered an obscenity in the world of law firms. But competition, and all that it entails, turned out to be at the heart of Bates.

The ability to compete, using as a foundation traditional techniques of marketing, ultimately and significantly altered the nature of law firm practices. It began a course of evolution that brought us to the modern firms we see today. In other words, it brought meaningful change beyond the decision itself. Competition has driven the profound changes in the profession since Bates. Technology advances have benefited from competition as well, and contributes to change, but ' despite common belief ' the impelling force has been and will continue to be competition.

Marketing 2.0

Marketing 2.0 is the period ' we're still in it ' in which the techniques of professional services marketing have been somewhat refined, and in which marketing has begun to evolve into a common practice now accepted by an increasing number of once-reluctant lawyers. These techniques were not originally in the arsenal of most law firms, and for most lawyers and their marketers, the new techniques had to be learned. What was hardest to learn, it seems, was that the traditional practices and techniques used in product marketing had little currency in professional services marketing ' and new techniques, predicated on the distinctive qualities of professional services, had to be developed. The professionals, to whom anything in their practice other than law was anathema, long fought against accepting the professionalism of the new marketing practitioners. “Marketing?” they would say in those early days, “Yeah, we've got a guy down the hall who does that.” There are still, unfortunately, those who have yet to accept marketing as integral to practice management. Professional services marketers, in those early days, had to spend an inordinate amount of their time selling marketing to the firm's lawyers. Marketing was defined by the professionals in those days by its mythology: “Public relations? That's free advertising, isn't it?” No, it isn't.

If there's one thing that has inhibited innovation and growth in professional services marketing in the decades since Bates, it's that disconnect between marketers and the professionals they serve. While too many marketers are content to accept that disconnect, and practice their craft virtually by rote, others fight back for innovation and relevance to the needs of the clientele ' and sometimes win.

But that negative attitude seems to be changing, at least because since Bates, and the days of the lawyers who consistently spoke and thought of marketing as some kind of alien practice that they want no part of, are dwindling. A new generation of professionals has grown into positions of authority in the firms. These are lawyers who understand that marketing is as integral to a practice as are law libraries and client billing. This new breed of professional understands that the environment in which they practice is tempered by competition, and that fighting competition isn't accomplished casually. There are now the innovative lawyers who rebuild or start law firms in the context of this new economic era.

Professional Services Marketing and Lawyers

An interesting characteristic about professional services marketing is that unlike product marketing, it can only be done with the full participation of the lawyers. The professionals must supply the grist for the marketing mills. The auto and cereal companies don't have to rely on the people on the line to market. The problem is that when every marketing idea is a hard sell within a law firm, when every partner has something to say and says it, a lot of good marketing ideas don't get into play. The lawyers had trouble understanding that they must be as conversant in marketing practice as the marketing professionals, and that marketing professionals must be substantially conversant in professional firm management That's what Marketing 2.0 has been like, and is only now beginning to change. And here we begin to see the beginning of a new era ' Professional Services Marketing 3.0.

A New Generation

But evolution often has a life of its own, and what should be is often what will be. New generations of professionals are moving into positions of authority ' professionals not totally imbued with, nor inhibited by, the traditions of their elders. What is emerging, then, is Marketing 3.0. It is the next stage of the evolution, and while its seeds are in the past three decades since Bates, it portends substantial change for both the marketers and the professionals. Professional Services Marketing 3.0 brings us the lawyer who is now completely conversant with the role of marketing in the practice, the techniques of marketing, and the role of the professional marketer. Where, under 2.0, it was the professional versus the marketer, we now begin to see the professional and marketer in a new partnership.

What we see, also, in 3.0, are new kinds of firms, with new configurations, developed to improve productivity and client service. We see new attitudes by the professionals, and new professional-marketer relationships. It's a new step in the evolutionary process.

Understanding the Core

To understand the foundation for professional services marketing, its anatomy ' as compared with that of product management and marketing ' must be understood. It's at the core of professional services marketing.

There is, primarily, the difference between the structures of professional firms and those of manufacturing companies. Manufacturers have management flexibility not traditionally available to professional firms. Lawyers are constrained by the limits of partnership and the Canons of Ethics and Code of Professional Conduct that inhibit more than they allow in dealing with the public.

Manufacturers can generally acquire and allocate capital more freely and creatively than professional firms, which have limited access to capital beyond revenues and partner contributions. Too often, every partner has a say in how capital is used, and is often constrained by realizing that every penny spent comes out of his or her pocket. Obviously, ways must be found to acquire capital and use it more effectively, including capital from external sources. Some firms are seriously considering it, particularly in the UK, where they are sowing the seeds of new forms of management and governance. It begins to look like the possible erosion of the current partnership structure in the not-too-distant future.

Manufacturing companies are usually run by managers who have either been specifically trained in management techniques, or who have acquired management skills as they moved up the corporate ladder. Even those professionals with MBAs have little management experience until they rise to the top of the partnership. Inherent in the training of management is the enhanced understanding of customer needs, and serving those needs ' an understanding that often seems inimical to professionals.

Manufacturers know that at the core of their businesses are the customers, and therefore that marketing ' making and keeping new customers ' is crucial. Many lawyers have yet, for the most part, to grasp the concept that marketing is integral to their success. Professionals too frequently see marketing as ancillary to the practice. Necessity now requires that activities be measured in terms of the needs of our times ' of the economy, of technology, of the changing demands of the clientele, and certainly of competition.

Looking to the Future

The future, I believe, lies in recognizing these and other differences, and understanding that much in this venue must be made more relevant to the needs of the current and emerging economic, social and technical environment. The practice of law can't continue to function in the new competitive environment as it has for so many generations. Evolution and competition have proven that.

If the firm of the future is to compete successfully, the role of the professional is to be aware of the need for thoughtful and professional competition, and to be educated in the skills of competitive marketing. The role of the marketer, then, is to educate the professional. That's professional services marketing 3.0.

Bruce W. Marcus, a member of this newsletter's Board of Editors, is a Connecticut-based consultant in marketing and strategic planning for professional firms. He is the editor of The Marcus Letter on Professional Services Marketing (http://www.marcusletter.com/), the author of Professional Services Marketing 3.0 (Bay Street Group, 2012), from which this article was adapted. and co-author of Client at the Core (John Wiley & Sons, 2004). E-mail: marcus@marcus letter.com. ' Bruce W. Marcus. All rights reserved.

The alternative title of this article is “Professional Services Marketing 3.0.” Why? Because in this rapidly changing economic environment, intensely competitive landscape, and highly charged electronics age, it's the best way to define significant evolution from one distinct professional services marketing and management period to the next. And when you understand that evolutionary process, you can better and perhaps more accurately project the future of not only professional services marketing, but of the profession itself as well. Competition and evolution are exactly what's happened ' and will continue to happen ' in law firm marketing. And significantly, in firm practices, business models, and structure as well.

How It All Began

The first stage of contemporary practice ' call it Professional Services Marketing 1.0 ' was the U.S. Supreme Court's decision in Bates v. State Bar of Arizona, which, in 1977, struck down the long-standing and traditional Codes of Ethics and Rules of Professional Conduct that prohibited what we now call “frank marketing,” or any form of promotion or commercialization. In one stroke, it wiped out the many generations of practice development achieved almost solely by social contact. The word “compete” was long considered an obscenity in the world of law firms. But competition, and all that it entails, turned out to be at the heart of Bates.

The ability to compete, using as a foundation traditional techniques of marketing, ultimately and significantly altered the nature of law firm practices. It began a course of evolution that brought us to the modern firms we see today. In other words, it brought meaningful change beyond the decision itself. Competition has driven the profound changes in the profession since Bates. Technology advances have benefited from competition as well, and contributes to change, but ' despite common belief ' the impelling force has been and will continue to be competition.

Marketing 2.0

Marketing 2.0 is the period ' we're still in it ' in which the techniques of professional services marketing have been somewhat refined, and in which marketing has begun to evolve into a common practice now accepted by an increasing number of once-reluctant lawyers. These techniques were not originally in the arsenal of most law firms, and for most lawyers and their marketers, the new techniques had to be learned. What was hardest to learn, it seems, was that the traditional practices and techniques used in product marketing had little currency in professional services marketing ' and new techniques, predicated on the distinctive qualities of professional services, had to be developed. The professionals, to whom anything in their practice other than law was anathema, long fought against accepting the professionalism of the new marketing practitioners. “Marketing?” they would say in those early days, “Yeah, we've got a guy down the hall who does that.” There are still, unfortunately, those who have yet to accept marketing as integral to practice management. Professional services marketers, in those early days, had to spend an inordinate amount of their time selling marketing to the firm's lawyers. Marketing was defined by the professionals in those days by its mythology: “Public relations? That's free advertising, isn't it?” No, it isn't.

If there's one thing that has inhibited innovation and growth in professional services marketing in the decades since Bates, it's that disconnect between marketers and the professionals they serve. While too many marketers are content to accept that disconnect, and practice their craft virtually by rote, others fight back for innovation and relevance to the needs of the clientele ' and sometimes win.

But that negative attitude seems to be changing, at least because since Bates, and the days of the lawyers who consistently spoke and thought of marketing as some kind of alien practice that they want no part of, are dwindling. A new generation of professionals has grown into positions of authority in the firms. These are lawyers who understand that marketing is as integral to a practice as are law libraries and client billing. This new breed of professional understands that the environment in which they practice is tempered by competition, and that fighting competition isn't accomplished casually. There are now the innovative lawyers who rebuild or start law firms in the context of this new economic era.

Professional Services Marketing and Lawyers

An interesting characteristic about professional services marketing is that unlike product marketing, it can only be done with the full participation of the lawyers. The professionals must supply the grist for the marketing mills. The auto and cereal companies don't have to rely on the people on the line to market. The problem is that when every marketing idea is a hard sell within a law firm, when every partner has something to say and says it, a lot of good marketing ideas don't get into play. The lawyers had trouble understanding that they must be as conversant in marketing practice as the marketing professionals, and that marketing professionals must be substantially conversant in professional firm management That's what Marketing 2.0 has been like, and is only now beginning to change. And here we begin to see the beginning of a new era ' Professional Services Marketing 3.0.

A New Generation

But evolution often has a life of its own, and what should be is often what will be. New generations of professionals are moving into positions of authority ' professionals not totally imbued with, nor inhibited by, the traditions of their elders. What is emerging, then, is Marketing 3.0. It is the next stage of the evolution, and while its seeds are in the past three decades since Bates, it portends substantial change for both the marketers and the professionals. Professional Services Marketing 3.0 brings us the lawyer who is now completely conversant with the role of marketing in the practice, the techniques of marketing, and the role of the professional marketer. Where, under 2.0, it was the professional versus the marketer, we now begin to see the professional and marketer in a new partnership.

What we see, also, in 3.0, are new kinds of firms, with new configurations, developed to improve productivity and client service. We see new attitudes by the professionals, and new professional-marketer relationships. It's a new step in the evolutionary process.

Understanding the Core

To understand the foundation for professional services marketing, its anatomy ' as compared with that of product management and marketing ' must be understood. It's at the core of professional services marketing.

There is, primarily, the difference between the structures of professional firms and those of manufacturing companies. Manufacturers have management flexibility not traditionally available to professional firms. Lawyers are constrained by the limits of partnership and the Canons of Ethics and Code of Professional Conduct that inhibit more than they allow in dealing with the public.

Manufacturers can generally acquire and allocate capital more freely and creatively than professional firms, which have limited access to capital beyond revenues and partner contributions. Too often, every partner has a say in how capital is used, and is often constrained by realizing that every penny spent comes out of his or her pocket. Obviously, ways must be found to acquire capital and use it more effectively, including capital from external sources. Some firms are seriously considering it, particularly in the UK, where they are sowing the seeds of new forms of management and governance. It begins to look like the possible erosion of the current partnership structure in the not-too-distant future.

Manufacturing companies are usually run by managers who have either been specifically trained in management techniques, or who have acquired management skills as they moved up the corporate ladder. Even those professionals with MBAs have little management experience until they rise to the top of the partnership. Inherent in the training of management is the enhanced understanding of customer needs, and serving those needs ' an understanding that often seems inimical to professionals.

Manufacturers know that at the core of their businesses are the customers, and therefore that marketing ' making and keeping new customers ' is crucial. Many lawyers have yet, for the most part, to grasp the concept that marketing is integral to their success. Professionals too frequently see marketing as ancillary to the practice. Necessity now requires that activities be measured in terms of the needs of our times ' of the economy, of technology, of the changing demands of the clientele, and certainly of competition.

Looking to the Future

The future, I believe, lies in recognizing these and other differences, and understanding that much in this venue must be made more relevant to the needs of the current and emerging economic, social and technical environment. The practice of law can't continue to function in the new competitive environment as it has for so many generations. Evolution and competition have proven that.

If the firm of the future is to compete successfully, the role of the professional is to be aware of the need for thoughtful and professional competition, and to be educated in the skills of competitive marketing. The role of the marketer, then, is to educate the professional. That's professional services marketing 3.0.

Bruce W. Marcus, a member of this newsletter's Board of Editors, is a Connecticut-based consultant in marketing and strategic planning for professional firms. He is the editor of The Marcus Letter on Professional Services Marketing (http://www.marcusletter.com/), the author of Professional Services Marketing 3.0 (Bay Street Group, 2012), from which this article was adapted. and co-author of Client at the Core (John Wiley & Sons, 2004). E-mail: marcus@marcus letter.com. ' Bruce W. Marcus. All rights reserved.