October 23, 2012

Tracking Law Firm Marketing Technology

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January 2008 Issue | Volume 34 Number 1 | Page 35

Marketing and Technology

Tracking Law Firm Marketing Technology

What are the technology needs of today’s law firm marketing departments? What technology is working—and what is not? The recently released Law Firm Marketing Technology Survey tapped the collective knowledge of firm marketers.

View the Law Firm Technology Survey article figures and sidebar.

What are the technology needs of today’s law firm marketing departments? What technology is working—and what is not? The recently released Law Firm Marketing Technology Survey —commissioned by the Legal Marketing Association in conjunction with the ABA Law Practice Management Section and the College of Law Practice Management—provides a detailed look at the marketing technology experience of a diverse group of firms. The survey tapped the collective knowledge of firm marketers to uncover the following:

▪ What problems are being solved with technology

▪ Which products are being used, and when custom solutions are deployed

▪ How much firms are spending

▪ Who is driving decisions about technology use

A Snapshot of the Legal Marketing Industry

The 183 law firms responding are both full-service and boutique. They are located in 35 states, as well as Washington, D.C., two Canadian provinces, the United Kingdom, the Netherlands and Australia. They represent the largest cities with populations of 5 million or more, and smaller towns with populations below 100,000. They range from solo firms to megafirms with more than 40 offices. Similarly, marketing departments range from one person supporting a sole practitioner, to CMOs leading 50 marketing staffers in support of more than 1,000 lawyers.

Size Factor Offers Few Surprises

We expected to find key differences based on firm size. We looked at firms with 1 to 49 lawyers, 50 to 199 lawyers, 200 to 399 lawyers, 400 to 899 lawyers, and 900-plus lawyers.  Yet in almost every aspect of marketing technology, we found the differences were greatest between firms with 200 or more lawyers and those with 199 or fewer lawyers. The only exception is one that comes with no surprise: The larger the firm, the more it tends to spend on marketing technology. According to the survey results, the only areas where size does not affect marketing technology are:

Purchase authority. Decisions on purchasing marketing technology typically are made by a firm’s management or executive committee, regardless of firm size.

Barriers to obtaining technology. For all firms, budget constraints were most often cited as a barrier, followed by the inability to demonstrate a technology’s return on investment and partner objections.

Perceived effectiveness. Between one-third and nine-tenths of all the firms considered their various marketing technologies highly effective.

Who’s Using What?

We wanted to learn which of the following 10 types of marketing technology have been adopted—and when, why and by what kinds of firms:

▪ Web site development and hosting

▪ Client relationship management

▪ Design and layout software

▪ In-house printing systems

▪ Matters/deal tracking/productivity

▪ Online survey software

▪ Online conference registration

▪ Online tracking databases

▪ Social networking/alumni networking

▪ Proposal generation

How widespread is use of these technologies? As shown in Figure 1:

▪ Most firms surveyed—90 percent—have Web site development and hosting technology in place, while large majorities use design software, CRM and in-house printing systems.

▪ One-third or more have matters/deal tracking/productivity technology, survey software, automated conference registration and online tracking databases. Smaller shares of firms —about one in four—have adopted social networking technology or automated proposal generation. Automated proposal generation—the newest tool in the mix—has been adopted mainly by firms with 200 or more lawyers.

Not surprisingly, the various types of technology tend to be used more often by the larger firms, as is the case for design, CRM, conference registration, online tracking databases and proposal generation. But for some technologies, the smallest firms—those with fewer than 50 lawyers—are equally likely to have them, as is the case for matters/deal tracking/productivity and social networking/alumni programs.

A closer look showed some differences in adoption due to other firm characteristics. For example, full-service firms were more likely than boutique firms to use technology for design, surveys, conference registration and CRM. And firms in metro areas with populations of 1 million or more were the most likely to use online tracking databases. The most widely adopted technologies also are those that tended to be adopted first, as shown in Figure 2.

Popular Software Choices

Many firms have opted for in-house custom solutions, as opposed to off-the-shelf commercial products, for various categories. Custom solutions are especially popular for these five areas:

▪ Online tracking databases (62%)

▪ Matters/deal tracking/productivity technology (50%)

▪ Conference registration  (50%)

▪ Web site technology (46%)

▪ Social networking /alumni programs (40%)

The newer the technology, the more likely a custom solution was deployed.

At the other end of the scale, nearly all firms adopting CRM, design software and survey software use off-the-shelf solutions. The most popular software choices for each type of technology, and the percentage of firms using it, are shown in the sidebar. 

When examining product use by firm size, results showed that larger firms more often use Interaction for CRM, QuarkXPress for design and Xerox for in-house printing, while smaller firms more often use Apex Marketing and ContactEase for CRM.

To determine any new trends in off-the-shelf purchases, we examined choices made by the more recent adoptors in 2006 or 2007, compared to those who purchased the technology prior to 2005. In five of the product types, there appear to be slight differences. Though none of the figures are statistically significant, it is interesting to note that among the respondents to the survey:

▪ For CRM, ContactEase gained significant market share among those adopting in 2006 and 2007.

▪ For social networking/alumni programs and Web site development and hosting, there has been a considerable increase recently in those naming “other” non-custom solutions. 

▪ For in-house printing systems, there has been a move away from single brands toward “custom solutions”—most likely these are networks drawn from multiple different brands, rather than outfitting a whole office with one vendor’s equipment.

Marketing Technology Influencers

For each technology used, what was the catalyst for adopting it? Who helped decide which specific product to use, and who made the final decision? We learned that selecting and spending on marketing technology are collaborative decisions among marketing, IT, firm leadership and other stakeholders.

For each technology used by a firm, we asked who recommended that the firm adopt it. Our marketing respondents, not surprisingly, most often said the recommendation came from the marketing department. However, more than 10 percent said the IT department made the recommendations for Web site technology, in-house printing systems and survey software. Similarly, when deciding which specific product to use, the marketing department generally took the lead in the evaluation process. And once again, IT helped out for about one-quarter to one-half of the firms, most often taking on evaluation duties for matters/deal racking/productivity technology, in-house printing systems and CRM.

As for the final say on purchases, the lead marketing professional usually participates in a joint decision-making process that can include the marketing partner, the firm administrator, and possibly a formal committee up to and including the management or executive committee.  About one quarter of the firms allow the marketing department to make purchases up to a threshold amount without higher approval. The threshold varies widely by firm. In 43 percent of the firms, technology purchases must be approved by a higher-level manager or committee, regardless of the price. This can range from one-person sign-off by the marketing partner, managing partner or chief firm administrator, to approval of decisions by the management committee. A third group, about 15 percent of the firms, report that they have no formal policies.

Attitudes and Barriers

The survey results show that most firms are receptive to marketing technology, including its newer forms. When asked to rate their firms’ receptiveness on a 0-to-10 scale, the average response was 6.6—meaning the firm is cautiously positive, neither resistant nor enthusiastically plunging ahead.

Firms with fewer than 200 lawyers tended to be less open to implementing marketing technology than larger firms (6.2 vs. 7.2 mean ratings)—likely owing to budget issues rather than an aversion to technology advancement.

When asked to name the primary barriers to obtaining needed technologies, an overwhelming 74 percent cited competing demands for budget dollars. Second, an inability to effectively demonstrate return on investment was cited by 37 percent. Some noted that it can be difficult to make business cases for technologies such as automated proposal generation—where the ROI makes theoretical sense but is not easily quantifiable—or alumni programs, which have considerable intangible value but may not generate direct revenue.  Lastly, while lawyer skepticism and resistance to legal technology does exist in many firms, only 27 percent said partner objections were the main barrier.

Spending Increasing

Firms generally are increasing their budgets for marketing technology, in many cases significantly. According to survey results, the average firm of roughly 300 lawyers spent just shy of $100,000 in 2007, and is expected to spend upwards of $150,000 in 2008. However, these figures can include upgrades, expansions or replacements of existing systems, not necessarily adoption of a wider range of technologies. And when viewed in terms of spending per head, $150,000 amounts to a mere $500 per lawyer.

We also asked whether marketing technology spending in a given year had, compared with the prior year, substantially decreased, decreased, stayed about the same, increased or substantially increased. The responses showed a clear upward trend in spending for all firm sizes.

In addition, when we look at the technology expenditures by firm size, as shown in Figure 3 on page 38, we see that the bigger the firm, the more it spends.  It is also clear that technology expenditures are continually increasing, especially among the smallest firms.

Problem Identified, Problem Solved?

What’s the biggest motivator driving deployment of marketing technology? With marketing resources stretched thin by increasing demands on both staff and lawyers, it’s not surprising to learn that the desire to “increase efficiency” ranked as the number one catalyst. As shown in Figure 4, firm marketers are highly motivated to build greater efficiency into their systems. There was one interesting exception: Nearly one-fifth of firms identified “client retention” as the reason for implementing a social networking or alumni program.

Additional reasons cited for implementing technology included that the technology was “required to reach a goal” or “solve a problem,” “was impressive to clients and prospects,” and “was being done by other law firms.” These responses point to another big motivator behind adopting technology: the need and desire to improve client, prospect and alumni experiences with the firm. Today communications extend beyond face-to-face meetings and phone calls to every electronic interaction with the firm—through firm Web sites, event registration systems and surveys.

Other reasons for implementation varied according to the specific technology. For example, for Web site technology, respondents indicated that the need to maintain ongoing, dynamic control over content and of the firm’s image were paramount. For design and printing, many said they implemented in-house solutions because they needed to produce smaller jobs at high quality, without the time delays and expenses associated with outsourcing.

Were these problems solved with the solutions adopted? Yes and no. As shown in Figure 5 on page 41, design software is considered most effective (a mean score of 8.1 on a 0-to-10 scale of effectiveness), followed by survey software and conference registration technology.  Technologies requiring participation by firm lawyers get the lowest ratings: CRM (5.3 mean), followed by social networking/alumni programs (5.5 mean).

Best Practices and Pitfalls

Lastly, we asked respondents to consider their experiences and describe best practices and pitfalls that could help other marketing professionals. These answers were diffuse, but the three most often mentioned best practices were doing one’s homework and conducting thorough research on the systems in question; getting support from all stakeholders; and partnering with the firm’s IT professionals—both at the research stage to ensure they’re buying the best product for the firm and to help ensure smooth implementation, training and maintenance.

The three most often mentioned pitfalls were not doing one’s homework on the systems in question; not getting support from stakeholders; and dealing with implementation, training, and maintenance issues, which presumably involve partnering with the firm’s IT professionals.

Interestingly, while a quarter of the respondents said they had no negative experiences to share, most of these problem-free marketers are from the smallest firms—those with fewer than 200 lawyers.

View the Law Firm Technology Survey article figures and sidebar.

About the Authors

Sue Stock Allison , the report’s primary author, is Managing Director of The Brand Research Company, headquartered in Washington, DC, and an active member and former Chair of the Legal Marketing Association’s National Research Committee.

Leslie Meagley is the principal of Meagley Strategic Marketing, based in Mercer Island, WA, and Chair of the Legal Marketing Association’s Research Task Force.