Transcript Martindale-Hubbell® Small Law Firm Marketing Index September 2005 Executive Summary In the summer of 2005, LexisNexis Martindale-Hubbell commissioned a benchmarking study of how small.

Martindale-Hubbell® Small Law Firm
Marketing Index
September 2005
Executive Summary
In the summer of 2005, LexisNexis Martindale-Hubbell commissioned a benchmarking study of how
small law firms in the U.S. market their practices to prospective clients in an attempt to grow their
business. The Martindale-Hubbell Small Law Firm Marketing Index, conducted by Harris Interactive,
surveyed nearly 1,000 small law firms nationwide (firms with 20 or fewer attorneys).
Below are some of the highlights from the study:
•
Law firms are placing increased importance on marketing their practices as reflected in
their budgets. The percentage of small firms spending 5% or more of their revenue on marketing
doubled in the last three years, from 11% of firms in 2002 to 22% of firms in 2005;
•
Marketing is one of the top “non-law” activities that take place in an average week. On
average, practicing law takes up 63% of a lawyer’s week, managing their business accounts for
14% of the week, and marketing-related activities are next, responsible for 8% of the week;
•
The firm Web site is perceived to be the most valuable marketing tactic for growing a small
firm practice, with 80% of all firms reporting they have a Web site and 89% finding it valuable.
The goal of the study was to document key marketing initiatives, marketing spend and the most
valued tactics in small firms. Read on to learn more about how firms market their practices today.
2
Overview
• Goal: Establish a series of benchmarks to document small law firm
marketing efforts, including an assessment of the types of marketing tactics
they find to be most successful.
• Methodology:
– Harris Interactive conducted an online study among employees of
small law firms (defined as having 20 or fewer attorneys).
– The self-administered, online questionnaire was conducted using
proprietary, Web-assisted interviewing software and took
approximately 15 minutes to complete.
– All qualified respondents were either solely or partially responsible for
the decision-making process of marketing their firm.
– Sample of current subscribers, past and non-subscribers used.
– A total of 967 surveys were completed.
3
Demographics of Respondents
Size of Firm
Solo
11-20
lawyers
48%
Family
10%
Personal injury
10%
13%
7%
Real estate
6%
Gender
Criminal
5%
Trusts & Estates
5%
Age
Female
25%
25-34
East
20%
South
36%
27%
49%
46-59
60+
Only responses of 5%
or more are shown.
Region
10%
35-45
Male
75%
22%
General practice
32%
2-5
lawyers
6-10
lawyers
Main Area of Practice
12%
Midwest
22%
West
22%
4
Marketing Responsibility
5
Partners Drive Marketing Decisions
The majority of marketing responsibility in law firms lies with a partner.
68%
Partner
17%
Member/associate/paralegal
Office manager/assistant/
secretary
Marketing consultant/
Marketing service provider/
Outside agency
Marketing manager/
director/officer
Other
None
•
•
11%
•
9%
4%
•
11%
In over two-thirds (68%) of firms, partners
have primary responsibility for planning
and executing marketing plans.
Members/associates/paralegals (17%) or
office managers/assistants/secretaries
(11%) are next most likely to have this
responsibility.
In 9% of firms, outside sources
(marketing consultant, outside agency,
marketing service provider) have primary
responsibility.
4% of firms have a marketing
manager/director/officer with primary
marketing responsibility.
9%
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Marketing Responsibility By Size
47%
Partner
Office manager/assistant/
secretary
Marketing manager/
director/officer
•
Solo practitioners, by nature,
are more likely than larger
firms (2-20 attorneys) to have
no one in particular in a
position of primary
responsibility when it comes to
planning and executing
marketing for their firms.
•
Larger firms (11-20
attorneys) rely more heavily
on other members of staff for
marketing responsibility, with
28% of firms reporting an office
manager, assistant, or
secretary having primary
responsibility and 13% of firms
reporting a marketing
manager, director or officer.
13%
18%
20%
18%
Member/associate/paralegal
Marketing consultant/
Marketing service provider/
Outside agency
78%
80%
72%
7%
7%
5%
4%
3%
3%
Other
5%
6%
5%
None
5%
6%
7%
13%
20%
12%
16%
28%
13%
22%
15%
Solo
2-5
6-10
11-20
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Marketing Spend
8
Marketing Spend
Law firms place increased importance on marketing their practice as
reflected in their budgets.
– Half of law firms report spending over $5K on firm marketing.
– Firms spending 5% or more of their revenue on marketing doubled
from three years ago from 11% to 22%.
– Firms spending $5K or more of their revenue jumped from 33% to
50%.
9
Upswing in Marketing Spend – Total
% of Revenue Spend on Marketing
50%
► Firms are spending a greater percentage
of their revenue on marketing than they
did three years ago.
43%
40%
% of Firms
30%
31%
22%
24%
20%
18%
11%
10%
8%
7%
6%
4%
0%
0-1%
2%
3%
4%
5%+
% of Revenue
Currently
3 years ago
10
Upswing in Marketing Spend – Total
$ Spend on Marketing
50%
► Firms are spending a greater dollar
amount on marketing than they did three
years ago.
40%
% of Firms
30%
25%
28%
25%
19%
20%
14%
16%
15%
9%
10%
9%
5%
6%
4%
0%
$0 - $1K
$1,001 $5K
$5,001$10K
$10,001 $20K
$20,001 $50K
$50K+
$ Spent on Marketing
Currently
3 years ago
11
Marketing Spend
Spending among all segments has increased significantly over the past three
years (see charts on following pages).
Solo practitioners:
 More than doubled in their spending of 5% or more (12% to 26%).
 Increased their spending of $20-50K by 300% (1% to 4%).
2-5 attorney firms:
 Nearly doubled in their spending of 5% or more (12% to 22%).
 Increased their spending of over $10K from 20% to 33%.
6-10 attorney firms:
 Doubled in their spending of 5% or more (6% to 12%).
 Increased their spending of over $50K from 9% to 13%.
11-20 attorney firms:
 The percentage of those spending 5% or more quadrupled from 5% to 20%.
 More than doubled their spending of over $50K from 5% to 13%.
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% Revenue Spend Among Solos
% of Revenue Spend on Marketing by Solo Practitioners
50%
44%
40%
30%
% of Firms
26%
28%
20%
22%
17%
12%
11%
10%
6%
6%
5%
0%
0-1%
2%
3%
4%
5%+
% of Revenue
Currently
3 years ago
13
$ Spend Among Solos
$ Spend on Marketing by Solo Practitioners
50%
40%
39%
30%
28%
% of Firms
20%
38%
22%
19%
13%
10%
12%
5%
4%
1%
0%
$0 - $1K
$1,001 $5K
$5,001$10K
$10,001 $20K
$20,001 $50K
1%
< 1%
$50K+
$ Spent on Marketing
Currently
3 years ago
14
% Revenue Spend Among 2-5 Attorney Firms
% of Revenue Spend on Marketing by 2-5 Attorney Firms
50%
40%
40%
30%
31%
% of Firms
22%
24%
20%
18%
12%
10%
7%
7%
3%
0%
0-1%
6%
2%
3%
4%
5%+
% of Revenue
Currently
3 years ago
15
$ Revenue Spend Among 2-5 Attorney Firms
$ Spend on Marketing by 2-5 Attorney Firms
50%
40%
30%
27%
% of Firms
26%
20%
21%
20%
12%
13%
16%
10%
10%
10%
6%
7%
4%
0%
$0 - $1K
$1,001 $5K
$5,001$10K
$10,001 $20K
$20,001 $50K
$50K+
$ Spent on Marketing
Currently
3 years ago
16
% Revenue Spend Among 6-10 Attorney Firms
% of Revenue Spend on Marketing by 6-10 Attorney Firms
50%
40%
49%
38%
30%
31%
20%
19%
% of Firms
12%
10%
6%
5%
5%
0%
0-1%
2%
3%
4%
2%
4%
5%+
% of Revenue
Currently
3 years ago
17
$ Revenue Spend Among 6-10 Attorney Firms
$ Spend on Marketing by 6-10 Attorney Firms
50%
40%
30%
% of Firms
21%
20%
17%
10%
18%
20%
18%
9%
18%
15%
9%
7%
13%
9%
0%
$0 - $1K
$1,001 $5K
$5,001$10K
$10,001 $20K
$20,001 $50K
$50K+
$ Spent on Marketing
Currently
3 years ago
18
% Revenue Spend Among 11-20 Attorney Firms
% of Revenue Spend on Marketing by 11-20 Attorney Firms
50%
40%
39%
36%
30%
% of Firms
20%
23%
20%
20%
10%
11%
8%
7%
5%
2%
0%
0-1%
2%
3%
4%
5%+
% of Revenue
Currently
3 years ago
19
$ Revenue Spend Among 11-20 Attorney Firms
$ Spend on Marketing by 11-20 Attorney Firms
50%
40%
30%
% of Firms
20%
20%
20%
23%
21%
20%
13%
10%
11%
8%
7%
7%
13%
5%
0%
$0 - $1K
$1,001 $5K
$5,001$10K
$10,001 $20K
$20,001 $50K
$50K+
$ Spent on Marketing
Currently
3 years ago
20
Time Spent on Firm Marketing
21
Marketing is Among the Top “Non-Law”
Activities
Marketing is an integral part of a lawyer’s time at work.
63%
Practicing Law
14%
Managing Practice
Marketing/Business
Development
8%
Conducting Research
8%
Professional/Personal
Development
6%
Other
•
Aside from practicing law and managing
their practice, law firms spend much of
their week engaged in marketing/
business development activities (8%):
–
Same amount of time is spent on
conducting research (8%).
–
Lesser percentage of time is
spent on professional
development (6%).
2%
22
Marketing is Among the Top “Non-Law”
Activities
Law Firm Activities
• As compared to respondents in
smaller firms (1-10 attorneys),
respondents in larger firms (11-20
attorneys) tend to spend less time
actually practicing law, and more
time in marketing/business
development.
1-10 Attorney Firms
2% 6%
8%
7%
14%
63%
Practicing law
Managing the practice
Marketing/Business
development
11-20 Attorney Firms
3% 6%
• These larger firm respondents (11-
20 attorneys):
–
spend a greater percentage of
their time in an average week
than smaller firms (1-10
attorneys) on marketing/business
development (12% vs. 7%)
–
spend a lesser percentage of
time than smaller firms (1-10
attorneys) on practicing law (58%
vs. 63%)
Conducting research
6%
Professional/Personal
development
Other
12%
58%
16%
23
Marketing is Among the Top “Non-Law”
Activities
64%
63%
63%
58%
Practicing Law
13%
14%
15%
16%
Managing Practice
Marketing/Business
Development
8%
7%
8%
12%
Conducting research
8%
8%
7%
6%
Professional/Personal
Development
6%
6%
6%
6%
Other
2%
2%
1%
3%
Solo
2-5
6-10
11-20
24
Utilization of Marketing Tactics
25
Directory Listings and Client Interaction
Are Preferred
Yellow pages, client entertainment and legal listings are the top three most
utilized marketing tactics among law firms.
%Spend on Marketing Tactics
25%
22%
21%
20%
► Law firms spend a smaller percentage of
their revenue on print or online yellow
pages today than they did three years
ago (22% vs. 25%).
19%
18%
13%
12%
7% 7%
6% 6%
5% 5%
3% 3%
Yellow
pages
Client
entertainment
Legal
directory
listings
Firm
Web sites
Event
sponsorships
Giving/
hosting
seminars
2005
PR/
writing articles
Referral
services
3% 3%
Local
outdoor ads
2%
1%
Paid-per-click
placements
1% 1%
Sponsorships
on legal
Web sites
2002
26
How Size Affects Choice of Marketing Tactics
While law firms devote their marketing budgets to similar tactics, size tends to
dictate the percentage of their budgets allocated to certain tactics.
Larger firms (6-20 attorneys)
• Larger firms allocate more of their budget to client meals and entertainment than smaller
firms (30% vs. 18%).
•
Larger firms tend to spend almost twice as much on event sponsorships (11% vs. 6%) and
giving/hosting seminars (11% vs. 5%) than smaller firms.
Smaller firms (1-5 attorneys)
• Smaller firms spend twice as much of their budget on print/online yellow pages than larger
firms (24% vs. 13%).
•
Solo practitioners spend more on referral services than firms with more
than 1 attorney (5% vs. 3%).
27
Current % Spending On Marketing Tactics
32%
30%
Current % Spending on Marketing Tactics
25%
23%
19%
16%
14%
11%
21%
19%
15%
10%
15%
14% 14%
11%
11%
8%
7%
5%
Yellow
pages
Client
entertainment
Legal
directory
listings
Solo
Firm
websites
Event
sponsorships
2-5
11%
6% 6%
5%
Giving/
hosting
seminars
7%
5% 5%
5%
4%
4%
4%
3%
2%
2% 2% 2%
2%
2%
2%
1%
1%
1% 1% 1%
PR/
writing articles
6-10
Referral
services
Local
outdoor ads
Paid-per-click
placements
Sponsorships
on legal
Web sites
11-20
28
Perceived Value of Marketing Tactics
Web sites are considered a primary marketing tool for growing a firm’s practice.
% Respondents that Indicated
Tactic as Valuable*
89%
Law firm Web sites
Printed/online legal directory/listings
85%
Public/media relations/writing articles
79%
Giving/hosting seminars
78%
Client meals/entertainment
75%
Print/online yellow pages
68%
Event sponsorships/community events
68%
51%
Referral services
Sponsorship/placement on
legal Web sites
Paid-per-click placements on search
engines
Local outdoor advertising
46%
• The most valuable marketing tools small
firms use to grow their practice include:
– Law firm Web sites
– Printed/online legal directory
listings
– Public/media relations/writing
articles
– Giving/hosting seminars
• Yellow pages as a valuable tactic is
rated a distant 6th at 68%.
• Of law firms surveyed, the law firm Web
site was deemed as the most valuable
tactic to growing their practice.
• 89% of firms find value in a firm Web
site.
37%
30%
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*Top 3 box score (Very Valuable, Valuable, Somewhat Valuable)
Perceived Value of Marketing Tactics
Perceived value of marketing tactics often varies by age of respondent.*
► In general, younger respondents tend to value law firm Web sites,
referral services, paid-per-click placements, and sponsorships on
legal Web sites more than older respondents.
► Generation gap is closed by tactics like print/online legal directory
listings and client entertainment.
94%
90% 89%
81%
80% 81%
79%
66%
84%
85%
79%
67%
89% 86%
86%
82%
74%
74%
67%
66%
78%74%
78%
76% 80%
72%
65%
66%
56%
65%
56%
53%
48%
40%
35%
54%
45%
40%
35%
25%
43%
36%
24%
16%
Firm
Web sites
Giving/
hosting
seminars
PR/
writing articles
Legal
directory
listings
< 34 yrs. old
Yellow
pages
Event
sponsorships
35-45 yrs. old
Client
entertainment
Local
outdoor ads
46-59 yrs. old
Referral
services
Paid-per-click
placements
Sponsorships
on legal
Web sites
60+ yrs. old
30
*Top 3 box score (Very Valuable, Valuable, Somewhat Valuable)
Significance of Internet Marketing
31
Significance of Internet Marketing
Law firms are embracing the Internet to promote their practice, and are using the
latest techniques to attract potential clients.
•
89% of firms perceive value to promoting their practice via a firm Web site
(28% very valuable, 31% valuable, 30% somewhat valuable).
•
Web sites are more prevalent among firms that spend more than $5K,
compared to those that spend less (88% vs. 69%).
Base: Have firm Web site (n=770)
► 50% use search engine optimization
20% of
firms do
not have
a Web
site
80% of
firms
have a
Web site
► 25% use paid placement on search engines
► 12% use online advertising
► 6% use listings on Legal sites such as
Martindale-Hubbell, FindLaw, etc.
► 3% use blogs
32
Successful Marketing Tactics
33
What’s Working?
Networking and word-of-mouth are still key to building a law practice, however,
emerging activities are also prevalent in integrated marketing campaigns.
Marketing Tactic
% Respondents that
Indicated Tactic as
Valuable*
% Mktg Budget
Spent on
Tactics
Law Firm Web site
89%
13%
Printed or Online Legal Directory Listings
85%
19%
Public/Media Relations/Writing Articles
79%
5%
Giving or Hosting Seminars
78%
6%
Client Meals and Entertainment
75%
20%
Print or Online Yellow Pages
68%
22%
Events Sponsorships/Community Events
68%
7%
Referral Services
51%
3%
Sponsorships/Placements on Legal Web sites
46%
1%
Local Outdoor Advertising
30%
3%
Paid-per-click Placement on Search Engines
37%
2%
* Top 3 box score (Very Valuable, Valuable, Somewhat Valuable)
34
Detailed Methodology
35
Detailed Methodology
A study of small law firms was conducted by Harris Interactive on behalf of Martindale-Hubbell. A total of 967
interviews were conducted via an online survey between May 31 - June 27, 2005 among employees of small law
firms (defined as having 20 or fewer employees). The length of the questionnaire was approximately 15 minutes.
SAMPLE SELECTION
Sample of current subscribers, past subscribers and non-subscribers was provided by Martindale-Hubbell.
Qualified respondents for this study identified themselves as working as a sole practitioner or in a law firm with 20
or fewer lawyers and were either solely or partially responsible for the decision-making process of marketing their
firm.
ONLINE INTERVIEWING PROCEDURES
Interviews were conducted using a self-administered, online questionnaire, via proprietary, Web-assisted
interviewing software. The HPOL interviewing system permitted online data entry of interviews by the
respondents. Questionnaires were programmed into the system with the following checks:
1.
2.
3.
4.
5.
6.
7.
Question and response series
Skip pattern
Question rotation
Range checks
Mathematical checks
Consistency checks
Special edit procedures
36
Detailed Methodology (cont.)
ONLINE INTERVIEWING PROCEDURES (cont’d)
To maintain the reliability and integrity in the sample, each invitation contained a password that is uniquely assigned to
that e-mail address. A respondent was required to enter the password at the beginning of the survey to gain access
into the survey. Password protection ensured that a respondent completed the survey only one time.
To increase the number of respondents in the survey and to improve overall response rates, up to two additional
reminder invitations are typically mailed at 2-4 day intervals to those respondents who have not yet participated in the
survey.
To increase the number of respondents in the survey and to improve overall response rates, respondents were
provided with a summary of some of the survey responses. This too was done via the Internet. Respondents were
sent an email that provided them access to a Web site that contained the survey findings. As with the survey itself,
this was a password protected site that was accessible for a limited period (1-2 weeks).
All data were then tabulated, checked for internal consistency and processed by computer. A series of computergenerated tables were produced for each of the key sample groups that showed the results of each survey question,
both by the total number of respondents and by the key subgroups.
37