ROI on law firm marketing expenditure still elusive, study finds
HANOVER, Mass., May 17, 2017 /PRNewswire/ -- A new research study finds that Chief Marketing Officers (CMOs) of the world's leading law firms are not confident that they can demonstrate a return on their firms' investment in marketing and business development (BD).
The 2017 Law Firm Marketing Operations Index, conducted by consulting firms Calibrate Legal and Totum Partners, surveyed CMOs at the largest law firms in the United States, Canada and the UK. The 68 participating CMOs were asked to rate their firms' performance in seven categories of leading business practices demonstrated by the highest-performing marketing/BD organizations across all sectors, including:
- Business Alignment and Accountability
- Marketing Performance Management
- Marketing Data
- Business Processes
- Revenue Enablement
- Systems and Technology
- Talent and Knowledge
"Our research suggests that law firm CMOs are not confident that their firms meet best-in-class standards for the operation of a Marketing/BD department," said Jennifer Scalzi, founder and CEO of Calibrate Legal. "This points to a viable area of opportunity in an industry that is particularly hungry for competitive advantage."
Of the seven categories of Marketing Operations proficiency covered by the survey, Marketing Performance Management stood out as an area for attention. CMOs rated their organizations low on ability to measure the performance and business contribution of their organizations – particularly on the critical metric of Return on Marketing Investment (ROMI), which is widely used in other industries to allocate marketing spend.
"Our research shows that CMOs understand the value of measuring return on marketing investment, but are not institutionalizing that measurement," Scalzi said. "Those that can confidently capture the performance of their marketing programs will be well positioned to achieve sustainable revenue growth."
Reinforcing this issue are the study's findings on Marketing Data in law firms. The responding CMOs appear to agree that improving marketing data – including quality, access, and capability -- needs to be a priority for their teams. In particular, CMOs believe that their firms need to focus on Client Relationship Management (CRM) data, including information on the firm's clients and lawyers' interactions with them.
"The ability to measure marketing's contribution starts with reliable marketing data," Tim Skipper, Managing Director of Totum Partners noted. Law firm CMOs are starting to recognize data as a critical asset for any marketing organization. Skipper continues, "We believe CMOs need to look at data & analytics as a core marketing competency, and set expectations around this competency for their teams."
The research also identified Revenue Enablement (the degree of alignment between marketing and business development activity) as a problem area. The responding CMOs reported high performance scores on the tactical elements of revenue enablement, such as creating and maintaining sales collateral and marketing materials. However, the CMOs are much less confident that their teams are strategically aligned with their firms' revenue goals. For example, few respondents report that Marketing supports a standard business development process, has internal accountability for the firm's revenue pipeline, or is measured by contribution to revenue.
Other findings in the joint research project included:
- CMOs report excellent working relationships with their CIOs and IT organizations – a positive sign for the future of marketing technology at law firms.
- Lack of integration among law firms' various marketing technologies remains a critical pain point for CMOs.
- Few of the respondents report that they track the satisfaction of their internal clients (lawyers and business developers) with Marketing's services.
Comments Scalzi, "Our research makes it clear that law firms have not fully embraced the principles of Marketing Operations: increasing marketing efficiency and organizational agility; aligning marketing activity with revenue growth, and measuring activity and people in a systematic way. There is some very rewarding work ahead for the firms willing to lead the charge."
The research partners believe that change is imperative. Said Totum's Tim Skipper, "As in other industries, the business leaders that marketers serve are motivated to wring the greatest possible value out of the firm's marketing expenditure. If law firm marketers can't prove that value over time, the Marketing/BD budget will inevitably be reduced or restructured."
About the Research
Field research for the 2017 Law Firm Marketing Operations Index was completed during March 2017. A 110-question survey was distributed by email to 280 of the largest law firms in the United States, Canada and the United Kingdom. All recipients were Chief Marketing Officers (CMO) or equivalent senior Marketing/BD executives. Responses were limited to one per firm; respondents were given assurance of confidentiality for their individual results.
Sixty-eight questionnaires were completed and returned, giving a satisfactory response rate of 24% of the survey population. Mean survey completion time was 23 minutes. Respondents included 22% of the world's top 50 law firms. The responding firms had an average complement of 793 lawyers, and an average of 36 Marketing/BD professionals.
About Marketing Operations
The rapidly growing discipline of Marketing Operations seeks to increase marketing efficiency and organizational agility, and to measure, in a continuous and systematic way, how the marketing function helps businesses grow revenue.
Marketing Operations arose more than two decades ago in the technology and consumer goods sectors. Initially, law firms were slow adopters, but today, leading firms are establishing dedicated Marketing Operations functions, led by highly qualified senior professionals in a bid to measure and manage the ROI on their marketing and business development (BD) expenditures.
About the Sponsors
Calibrate Legal
Our mission is to connect the right people, ideas and information to position our law firm clients at the forefront of the next era of the legal industry.
We partner with our law firm clients to help capture and articulate the value of their human capital investments, and to advance the dialogue between law firm leadership and the Revenue Enablers™ who are critical to advancing their strategies.
We are committed to helping law firms position themselves at the forefront of the legal industry's evolution by placing sophisticated talent, leveraging firm leadership and building cultures driven by meaningful data.
Totum Partners
Our vision is to be the first port of call for business services recruitment for leading law firms. Clients choose us because we move with the market, understand the legal sector better than anyone else and attract the best talent from inside and outside the profession.
Our long background in legal recruitment gives us the ability to support all sizes of law firms in all parts of the world to create and develop highly effective management teams that drive sustained business growth.
At Totum, we live and breathe law firm management. Nothing is more important to us than sourcing the right and the best management talent to meet the specific needs of every law firm we work with. But it is the way that we work that consistently delivers success.
Information for Media
The Executive Summary of the research findings can be downloaded here:
To obtain a copy of the complete study, or to arrange an interview on the research findings, contact:
Whitney Hudson
Head of Communications
Calibrate Legal
[email protected]
312.238.9193
SOURCE Calibrate Legal
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