In my last post, I brought in comments from leading legal marketing consultants from the LSSO listserve discussion called, "Where have all the CMOs gone?" In Bill Flannery's LSSO listserve post dated February 20, 2010, he said that he has recently interviewed more than 100 law firms in North America and overseas, and there are more than 40 CMO positions open.
He goes on to say that firm leaders have put those positions on ice, because they are frustrated that the former CMOs failed to drive revenue (I am paraphrasing here) - that there was "very little ROI" on the "marketing things. . . branding, brochures, newsletters, etc."
Specifically Bill says:
The partners thought they were getting sales when they hired these CMOs and CMOs did the “marketing thing” as they do not have the authority or clout to drive sales. As you can see from the LMA listserve discussions sales, client teams and account management has not been discussed hardly at all. The great promise from marketing and branding was that the business would come in without the lawyers having to do much at all. In other words, marketing was going to make sales unnecessary! “I went to law school so I would not have to do sales”. In my case I went to law school to learn how to sell to lawyers.
As a former in-house marketing director and one who works with marketing departments of all sizes, I am saddened that we are still having the above conversation. First, I don't know any CMOs who believe that branding will drive sales. As with any multi-million, or multi-billion dollar organization, a branding initiative is a critical business investment - to adjust audience perceptions, clarify and distill messaging, enter new markets, and otherwise communicate a consistent and memorable positioning promise that resonates with constituents. An effective and well executed positioning strategy and branding campaign saves money in the long run - because all elements of the integrated marketing program are supporting the strategy. If a lawyer's million-dollar idea is, in fact, a good idea, you'd move forward with it if it supports the strategy. If it doesn't, you would set it aside.
The rest of Flannery's post continues below:
The big buzz among Managing Partners and mktg partners is business development, i.e., sales and client teams. The firms that get it have gone to very structured client teams using firm-wide account planning, similar to what IBM and HP have done for the last 40 years. LSSO had a Harvard professor speak on this very subject at its annual Chicago meeting. His conclusions support the conversations that I have been having with firms. The firms that self-medicated trying to develop client teams on their own have mostly universally failed. "Client teams" now have a bad reputation in those firms, and chances of revisiting teams are remote. I am wondering how the clients of these firms might react knowing the lack of collaboration on their matters, and with regard to their future needs.
Because a failed client team and other initiatives are viewed as "marketing," (rather than serious law firm business strategy), many of the CMO jobs are today going unfilled. What the search consultants have told me (I get 4 to 5 calls a week looking for Chief Business Development Officers) is the pool of people to fill the position of CBDO is VERY small. That explains why partners are now filling those slots. At the very large firms the compensation can be as high as $500k plus.
In all fairness to the CMOs few have sales, client team and account management backgrounds or experience.
We have stats (14,000 partners surveyed worldwide) that indicates the average partner spends less than one hour a week meeting with clients and prospects face-to-face in a business development/sales situation. No surprise there! The real problem is that 99% of the lawyers do not want or are not skilled to do business development. Some lawyers spend less than 10 hours a year. There are recent HBR studies that indicate buyers will not buy from people they have not met and with whom they have trusted relations. There are no proxies to build trust. Also internal lack of partner-to-partner trust resulting in client hoarding has become rampant in this economy. Partners state, “I need to have a portable book of business."
Lateral movement and having one's own book of business rules like never before. The cultural fabric of these firms is being stretched to the limits. No one seems to be teaching how to drive firm loyalty. Free agency has caused many firms to fail. Firms are beginning to look like NBA teams where a very few number of stars are running the show for their own personal gain. Daniel Pink’s new book, “DRIVE” gives those of us who value mastery, purpose and self actualization, hope. Hope unfortunately has limits as a strategy.
Studying the failed firms over the last two decades, the demise of most of these firms is typically driven by a tiny minority of partners. Practice group marketing has facilitated the demise in almost all of the most recent firm breakups. Some practice groups in large firms had their own CMOs and became firms within the firm. The potential departure of significant practice groups remains the single biggest exposure law firms have today.
The other approach of self-medication has been to use former MPs to do BD and client opinion surveys. I like the commitment, however I remain skeptical that the lawyers will absolutely address and fix the client concerns.
Some firms have fired their entire mktg/BD departments. Their thinking is, when in doubt about ROI, clean house. Others have outsourced mktg and use coaches. The trend I am now seeing emerge is that these outside consultants/coaches are being hired as contract CMOs/BDOs (see the LMA job bank for this description). Some of the coaches are in the attorney placement business. They help partners build a book of business then the lawyer shops the book to other firms…very clever.
Because there are no true comparable models on how to grow the business in a recession, I would suggest that CMOs, MP, COO and other stakeholders look outside the legal profession for solutions to the account management and sales challenges. Forget a client's standard reply “we cut the budget for legal services so we want a discount.” Most of the business issues that became legal work did not exist as budget items in 2008. Also the budgets are being set at executive levels ABOVE the legal department. Raise your and your firm’s contact level to include those who approve the budgets.
These are my thoughts from listening to firms and businesses.
You can reach Bill Flannery directly at [email protected] or (512) 338-1758.