Few hands went up when Timothy Corcoran, principle of Corcoran Consulting Group, LLC, asked his audience if anyone had a degree in math. Despite not being the focus of many legal marketers’ educations, math and analytical skills are increasingly important to their effectiveness. In his June 26, 2013 LMA Midwest program, “Measuring the ROI of Business Development – Even if it’s Possible, Does Anyone Care?” Timothy discussed the importance of measuring the value of business development efforts and leveraging this data to change behaviors and gain efficiencies in our firms.
Change With the Times
Gone are the days when law firms were flush with demand for their services. Now, clients are asking for more– seeking predictability but angling for discounts. They want loyal law firms who gain deep understanding of their business, but themselves will switch firms to firms on a dime to cut costs. He said that the shift from a demand economy to a supply economy is well underway, and competition now spans the globe.
Even with these dramatic changes, many attorneys still attribute factors simultaneous with their past successes as the causes of that success. This has resulted in the repetition and reinforcement of activities that just aren’t effective in today’s environment. Unfortunately, said Timothy, persistent rate arbitrage will continue unless firms start doing things differently.
Teach an Old Elephant New Tricks
Timothy compared the effects of this change-averse mentality to the perils of a circus elephant who, as a baby, is tethered to a small stick to keep him from escaping. Because the elephant has learned to associate the small stick and tether with limited mobility, even as he grows larger and stronger, the tiny tether keeps him in place despite the fact that he could easily break free. The powerful elephant is stifled by his past experience.
There’s no reason firms can't be successful, he said, but by adhering to the ways of the past, many choose not to be. For example, these days, if you’re in a prospective client’s consideration set, they are already convinced you can do the work. However, many firms still approach prospective clients with information about competencies and success rates, when their audience is seeking qualities far beyond work and rates. Many attorneys are reluctant to give credence to those factors because they are contrary to how they believe firms make money.
Show Them The Money!
Too often, marketing team members and attorneys speak different languages, which makes it difficult to get the investment and buy-in needed for success. Calculating and demonstrating return on investment (the ever-elusive ROI) can be an effective way to speak the same language. It quantifies what’s working, what’s not, and helps to garner management’s support for the highest value activities (hint: it’s probably not a generic firm brochure).
Firms can measure the input of all business development and marketing activities (prospecting, events, pitches/proposals, etc.). It takes time, but as Timothy asserted, it is impossible to measure ROI as a snapshot. He shared some effective ways to use analytics and measurements to drive efficiencies and demonstrate results:
- White space analysis: Across one axis, list top clients, across another, list the practice groups. The chart is shaded at the intersection of work in a certain practice for a certain client. The areas of whitespace highlight opportunities for work. Step two is to marry internal and external data to creating a prospecting tool that shows where there are opportunities for work that is profitable.
- Identify and repeat activities that win business: a sales/opportunity pipeline tool helps distinguish the various activities that attorneys engage in and helps distinguish those that lead to winning business from those that result in losses. This can also be useful in helping identify opportunities that are suited to particular attorneys strengths. Everyone has inherent skills that can be useful during certain stages of the business development process, said Timothy, and not everyone has to be a rainmaker to contribute to successfull business development efforts.
- He also provided examples for how to monitor the effectiveness of other budgeted initiatives including association involvement, events, and pitches and proposals.
- For more detail on the various approaches to measuring ROI Timothy discussed, check out the webinar recording of his presentation.
Sharpen Your Focus - Internally and Externally
Internally, it is impossible to serve all attorneys at maximum capacity, so marketers need to determine which efforts are most profitable. By tracking time and outcomes related to the business development efforts of various attorneys and practice groups, marketers can give management a better sense of the full ROI of marketing and its capacity. This can inform how decisions are made and how resources are employed going forward.
Timothy made clear that the standard capabilities statements and brochures or firm-focused proposal can be a complete waste of resources and are not the straightest route to business generation. Client-centric, customized proposals have a far greater likelihood for success. One way to approach this is to help a potential client identify business problems, demonstrate the impact of that problem on their business and provide proposed recommended actions.
Likewise, when determining which attributes to measure and track, Timothy said to consider the metrics that matter most to clients, such as efficiency, process management, responsiveness and communications. Nowadays, clients have more information than perhaps even we do regarding the value of our services. Rather than turn a blind eye, as legal marketers we must get comfortable with the informed party across the table and take advantage of this wealth of data to create a compelling cases for differentiating our firms.