Monday, May 8, 2017

Improve ROI by Reorganizing the Law Firm Business Development Department?©

Many law firms employ in-house marketing/business development support professionals or have an entire in-house marketing/business development department. The current industry-wide ratio of lawyers to law firm marketers/business developers is around 25 to 1, but in many firms the ratio is much higher, up to around 50-75 to 1.  

Most in-house marketing/business development support professionals are still generalists who are expected to oversee and implement all marketing and business development efforts. But increasingly, specialists are being hired for one specific marketing function, such as events, RFPs and proposals, pricing analysts, business and competitive intelligence researchers, and/or client-facing executives tasked with developing leads and manage a pipeline.

A recent study of large law firm chief marketing officers found that at least 50% of their law firm marketing departments are understaffed, overworked and mainly reactive in fulfilling lawyers’ requests. And as a result, most do not have the time or the bandwidth to proactively address important strategic initiatives and projects in this incredibly competitive market. 

Many contributing factors are creating this road to burnout, one of which is the current organizational structure of a firm’s marketing/business development department. To improve ROI, various firms are:
  1. Separating the marketing department operations/management role into a separate position. 
  2. Centralizing all marketing support staff into a shared services model, often in a low-cost location, and/or, 
  3. Hiring sales executives and specialists to work with certain key practice and industry groups.
One global law firm recently announced the reorganization of its entire business development support function into three new departments: marketing, sales, and communications. What are the benefits and drawbacks of this new organizational model? And will other law firms follow suit? The firm is betting that separating its entire business development function into three new departments will improve the ROI and best serve the firm’s partners and lawyers. The three reorganized departments’ roles are as follows:
  1. MARKETING - The marketing department’s purpose is to generate awareness about the firm and its lawyers, position the lawyers, and generate new leads/interest/opportunities/inquiries. This department will oversee and handle all the most common awareness-generating and positioning tools used by law firms and lawyers, such as events, advertising, promotions, sponsorships, a CRM system and list creation.
  2. SALES - The sales department’s purpose is to maintain, enhance and expand key relationships. This department will handle all client-facing activities such as RFPs and proposal response and generation; client teams, reviews and interviews; business and competitive intelligence; pricing; referral and alumni programs; and trade show participation.
  3. COMMUNICATIONS - The communications department will oversee and handle all internal and external communications, public relations, media, etc. It will also house the firm’s online presence management function, including website maintenance and social media.
There is no one perfect organizational structure for law firm business development, but this one may still pose some challenges and redundancy issues, such as:
  1. Both marketing and sales rely on and use communications constantly, so how will overlap and/or redundancy be streamlined and/or avoided?
  2. Where will graphics/graphic design be housed? Each of the three departments above use graphics and graphic design routinely.
  3. What about technology and leveraging data? Again, these increasingly critical functions impact and are used by each of the three departments above.
  4. The #1 greatest source of new business for most law firms over the past few years is growth by acquisition/merger. But these important revenue drivers do not seem to be classified by this firm as “business development” or housed in one of the three new departments.
  5. Although only lawyers (usually only partners) can review and clear conflicts, it is important that the firm’s sales team have direct and formal working relationship with the firm’s conflicts department so that sales team members can make requests for conflicts reports to be run and sent to certain lawyers.
Creating an efficient and effective law firm business development department is time- and resource-consuming, as is identifying, hiring and training effective law firm marketing and business development talent. 

To learn more about assessing the effectiveness of your firm’s current business development organizational structure and how doing so may benefit your firm’s bottom line, please contact the author, Julie Savarino.

More Resources – 
Selective outsourcing can improve ROI, check out our BD Workforce services.

1 comment:

Julie Savarino said...

Below are several comments about this article posted in a private group by leading law firm marketers:

1. Drawing up a new org chart looks neat on paper. But do new organizational silos actually address the "understaffed, overworked and reactive" problem? Because in a 50:1 ratio firm, there's likely never going to be comprehensive ROI tracking. Paper reorgs are just asking folks to put on a new uniform. The rules of the game haven't changed. I don't mean to suggest a reorg is pointless. Just that it needs to be accompanied by other actions, with regard to staffing, budgets and BD strategy.

2. In my world, marketing and communications are distinct from business development but intertwined disciplines.

3. Nothing new. You just have to be big enough to do it. But rearranging the decks on the Titanic didn't keep the ship afloat, and neither will new org charts solve the inherent problems that CMOs and directors are suffering under ... too much tactical and not enough strategy.

4. To me a department breakdown into BD, marketing and communications isn't new. And putting this structure in place doesn't seem like it would stop the load/pressure everyone is under. That is a problem that can only be solved by either hiring more people (not always the best choice) or training our firms about the best use of our time and energy (sometimes this is impossible to accomplish based on firm culture and leadership).

5. In my view, a firm's marketing structure should be designed to 1) support achievement of the firm's strategic business objectives, 2) fit the firm's culture and the stage of its life cycle, and 3) address market changes/challenges. If your firm is a 4th generation 500-lawyer general practice firm with revenues primarily derived from 50 institutional clients, your structure should look entirely different from that of the 1000-lawyer, rainmaker-driven firm created through serial lateral acquisitions and mergers. I agree with Julie that it is helpful to have some models to use as points of reference, particularly if the models are based on categories of firm business objectives, cultures and structural models. On a related note, I'm finding that firms are open to creating more fluid models - recognizing that marketing structures need to evolve as the firm's needs and priorities change.

Julie Savarino - Thanks all for comments! No question there is no single perfect model organization structure. Key issue all around is not enough staff and resources in most firms 😥. That is why we formalized our BDWorkforce services last year and now provide experienced help to several firms to get projects and tasks done. Not a complete solution, but at least an option to help in-house marketers have extra hands and avoid burnout.