This is the third in a series on practical, low-cost options to improve performance and profits amid tight budgets and layoffs. The first piece, on collections, can be found here, and the second, on practice management techniques, can be found here.
The latest financial results across Big Law show the impacts of a slowing economy and increasing expenses. Shifting from a period of unprecedented growth and profitability to uncertainty and a looming recession, firms have responded with smaller budgets, talent reductions and delays in large firm-wide transformational initiatives. Law firms need to focus on existing resources to make 2023 as successful a year as possible.
In our previous articles, we have explored how firms can stress-test their collection process, identifying points of inefficiency and achieve measurable improvement on the percentage of billed time converted to received revenue. Our second article examined practice management, the benefits of client focus, and understanding and investing in client growth potential. Acknowledging current conditions and limitations, we have focused on no-cost and low-cost options to identify opportunities, with an emphasis on reallocation of current resources and internal efficiency.
This article is the third in our series to help law firm leaders, partners and business teams achieve improved performance even in these challenging circumstances, with a focus on the effective utilization and alignment of knowledge management, marketing and business development resources.
It is essential for law firms to objectively understand and leverage their capabilities, be able to effectively convey their value proposition to their current and prospective clients, and to be responsive to client requests and identify emerging client needs. All of this, while allocating limited resources in line with firm strategy and in the face of partner and client requests. As Alison Swenton Arjoon, Chief Marketing & Business Development Officer at AmLaw 100 firm, Fragomen, noted, “the reality is that marketing resources are neither infinite, nor free, and they need to be allocated strategically across key initiatives.” What is certain is that coordination and communication between functions is an imperative. Sadie Baron, Chief Marketing Officer of Reed Smith, notes that there is a “need to differentiate in an industry within which quality of legal service is expected, and a need to work smarter and provide additional value.” As noted below, we emphasize the need to make the most of the resources that you have and to ensure you are maximizing impact through aligned and intentional allocation of those resources.
While titles and functions can vary between law firms, knowledge management teams are tasked with organizing, sharing, and utilizing the collective knowledge of a law firm’s lawyers and professionals. That knowledge can come in the form of physical and digital information, which can include a database of past cases, legal research, forms—with updated market standards, and other relevant information that can be used to quickly respond to client needs and requests, internal users, and, ultimately, provide better service internally and externally.
As the number of practice and industry groups and the regional breadth and markets served increases, the need for uniformity of materials and immediate access to relevant information also increases. “Being able to connect core messages efficiently is directly tied to the strength of the relationship between your business professionals and the firm, and that connectivity is as important as I have ever seen in my twenty-five years in marketing and business development,” commented Alison Swenton Arjoon of Fragomen. Such efforts have proven benefits. Kate Cain, Senior Director of Knowledge & Innovation Delivery at Fenwick noted that “It’s a challenging cycle. As client demand cools, demand for internal business services heats up which in turn puts intense pressure on the need for high-quality data and actionable information. Teams that put in the effort, even in busy times, will come out ahead; those that don’t, will be caught empty handed.”
Effectively organizing and accessing the firm’s knowledge assets can be challenging and requires a blend of technology, process, culture and integrated business professionals. Enterprise software solutions can provide uniformity for timekeepers, but the material to be accessed is only as valuable as the quality of the product and completeness of what exists and is entered into the system. In short, a key barrier can be lack of compliance. Clear processes to capture current documents are likely ingrained at most firms, but what about client and market intelligence that has not been reduced to writing? This information, gleaned from conversations with clients and colleagues, as an example, is likely the most current and valuable information for client relationships. Effectively capturing and sharing that information can keep lawyers and professionals across the firm aware of the latest developments in client relationships and projects a unified, multi-disciplinary team response to current and prospective clients.
How best to capture this information? Success in this area will often be dependent upon the culture of communication and information sharing amongst and between lawyers and business support professionals, and can be highly influenced by compensation related metrics and other incentives in place within each firm. Not all information gathering can be automated. Even when firms attempt to leverage technology, are they doing that effectively? Not very often, notes Sadie Baron, “law firms can often silo technologies in one function, which only allows one perspective and view on the data collected. The trick is to try and harness the power of this range of information and surface it in a useful way, which adds value to the attorney and is easy to access.” Kate Cain, of Fenwick, similarly noted that “changing behaviors and adopting new tools is all about knowing your audience and responding to the core needs and what they are seeking to achieve.”
Trusted business professionals can be invaluable to collect, manage and distribute this “word of mouth” information. How easy that process is will largely be dependent upon the amount of time and effort required to convince timekeepers of the value and importance of uniform knowledge and information access. When demand is slow and the need to be able to keep current clients happy and attract new clients, it is easier to accomplish those goals if all are working together and leveraging their collective strengths, as opposed to going it alone.
Knowledge Management - Tactics: So, what are some low-cost or no-cost actionable strategies to employ and questions to ask?
Knowledge Inventory: Now is the time to reacquaint lawyers with resources and introduce those new to the firm to valuable knowledge assets. As noted by Kate Cain of Fenwick, “when legal teams have room to breathe is the time to really make progress on knowledge assets—reacquainting lawyers with what information resources and services are available, ensuring deal and case details are captured, updating forms and checklists, and the like, so they are at-the-ready when the pace picks up again.”
Compliance Check: Ensure operations are consistent with any firm policies of keeping forms and templates updated, digitized and on firm servers.
Data Collection Processes: Are conversations with clients or market intelligence captured by your CRM system, whether automated or by direct input from your timekeepers and professionals? If not, or if you don’t have or don’t effectively utilize a CRM system, valuable information is being lost, and with that the opportunity to increase client confidence and potentially uncover internal collaboration opportunities to serve new client needs.
Knowledge Management Talent: Embed a knowledge management culture within practice groups and client teams. Siloing these business professionals prevents them from being able to effectively support the firm's business.
Marketing’s core function is to emphasize the firm’s unique strengths, values and ability to address specific practice, industry and market needs. The ability to effectively craft and convey a law firm’s “story” to the market is an ongoing task in need of updating and tailoring to remain current as an enterprise-wide brand, and tailored for relevance to specific markets and practices, as needed. Such visibility is essential in a low demand environment with a growing list of competitors. Being able to tell a clear story to the market could be the difference between developing a new client opportunity or not even being considered for one.
Attributes, such as practice strengths, values, and strategy need to be conveyed in branding and marketing efforts, while remaining relevant and agile to current market events. A well-executed marketing campaign can also help you target specific industries or practice areas that may be more active during various market conditions. By establishing your firm as a thought leader and building a strong online presence, you can generate leads and create new business opportunities.
Nora Shearer, a veteran CMO of AmLaw 100 firms, noted that “a successful and impactful marketing plan wraps a firm’s story into client-centric messaging that indicates a clear understanding of the market trends and challenges and provides timely and relevant information. In addition to conveying a consistent and compelling firm story, messaging must respond to clients’ expectations regarding a firm’s legacy of values. Clients want to know about all aspects of the firm, including the firm’s pro bono contributions and its history supporting public interest matters. These, more than ever, need to be part of a firm's story."
Marketing - Tactics
Visibility: Be relevant and top-of-mind for clients as we emerge from a hybrid environment and enter a recessionary one. Revisit the firm, practice, and individual lawyer’s social media presence, which can be an effective way to communicate with the market immediately – if used correctly and on message.
Strategy Creation and Execution: Do you involve key members of your marketing teams in this process and any quarterly or annual reviews? Doing so improves alignment and efficacy.
Internal and External Feedback Loops: Do you solicit feedback from stakeholders and your clients? If so, do you share this information with the teams of professionals who are crafting your organization’s story? Absent such communication, it is impossible to fully leverage the collective strength of your law firm.
Business development teams are tasked with identifying new business opportunities, nurturing existing relationships, and creating strategic partnerships. By having a dedicated business development team that partners with your attorneys, a law firm can identify opportunities based upon current market conditions and develop strategies to capitalize on them. Nora Shearer, a veteran of AmLaw 100 firms comments “An effective business development team is one that is fully integrated with a firm’s practices, attends industry events, and speaks frequently with clients, bankers, regulators, and other market experts. A business development team’s access to technology and analytics uniquely positions the team to identify trends and quickly detect market changes. A successful business development team is strategically aligned to work alongside the partnership in responding to client-changing needs.”
According to Shearer, “In the absence of clear differentiators for legal expertise, it’s the client’s actual experience of working with a firm—including its responsiveness, use of technology, project management, pricing, and knowledge management—that makes an impression. When these business functions are aligned, it becomes much easier for a firm to rise above the competition and attract and retain clients.
This alignment requires strong leadership and close collaboration across all of a firm’s core business functions. The most effective law firms leverage their marketing, business development, and communications teams as the driving force to achieve this cohesion. Marketing is the single business function that can be fully integrated across all other administrative functions of a law firm and is, therefore, in a unique position to help the firm deliver on its unique brand experience.” said Shearer.
Business Development - Tactics
Key Account Strategies: Determine the firm’s best-performing clients and assess opportunities/ challenges for each. Allocating resources, especially in an environment of reduced budgets, can improve the overall effectiveness of strategic initiatives.
Intentional Measurement: Determine success metrics, set goals and turn those metrics into internal stories to provide momentum. Always ensure that metrics align to larger, firm-wide strategic goals.
Client Feedback Processes: If you are not having client feedback sessions, examine why that is. If it is due to a lack of time, turn to your business development professionals for assistance and for help documenting and sharing that information.
The value of collaboration and communication amongst knowledge management, marketing and business development teams is paramount. Additionally, coordination and alignment between those teams, management, lawyers and client teams, is equally as important regardless of market conditions. In an economic downturn, this connectivity is stressed and must be a priority, if those teams are not already coordinating effectively. Such “team approaches,” exist, but are too few and far between at this point, but many suspect greater coordination is on the horizon and might be accelerated by the looming recession. Reed Smith’s Sadie Baron noted that “within 5 years we will have more multi-disciplinary approaches to deliver services to clients, which blends capabilities and experts across functions to maximize client service.” How successful firms are at optimizing and integrating these teams may very well make the difference between positive and negative growth for law firms in 2023.
Originally published in AmLaw, June 2023