Originally published in: "Of Counsel" Published By:

“Steve, did you hear that we’re scheduled for a practice group marketing meeting next Friday? Didn’t we try that marketing thing once?”

That’s an actual quote from a partner at a 350-attorney firm headquartered on the West coast six years ago.

Law firm marketing has certainly evolved over the last several years well beyond the awareness level suggested by that comment. Strategic marketing efforts have also become more integrally tied into the business planning process, which is where accountability reigns. This emphasis on demonstrating marketing success as it connects to firm-wide business goals has naturally filtered down to the practice group level.

In fact, at this point, there is widespread agreement that developing specific and measurable marketing strategies is more meaningful when those strategies are focused on industry or practice groups rather than on the firm as a whole. (The exception would be a boutique that focuses on a single practice area.) If a firm can narrowly defines its target market and audience, it should anticipate an increased number of specific and measurable successes. Right?

Well, sometimes. The bigger question is, why do some firms have great success with practice group marketing while other practice group marketing programs die on the vine? There are many variables that affect the success of practice group planning. One of the most significant issues to consider is the use of carefully applied market segmentation strategies.

What Is Market Segmentation?

Market segmentation is the process of identifying clients and prospects with similar needs, wants, and purchasing behaviors. Successful practice groups have figured out how to use the principles of market segmentation and apply them to their practice groups.

The overall objective of using a market segmentation strategy is to improve a practice group’s competitive position as well as to better serve the needs of its clients. Specific benefits may include increased “sales,” improved market share, and the enhancement of the firm’s image. It should also make marketing clearer and simpler for lawyers in the practice groups.

A practice group might choose a market segmentation project if the results of research demonstrate a large enough market, or segment, with similar buying and servicing needs. For example, class actions clients tend to have similar needs when hiring firms; that is, they want law firms that have handled similar-sized matters and have “crisis” experience, among other qualifying factors.

Successful Practice Group Plan Variables

Consider the following success variables when structuring a practice group strategy:
• Are the practice group marketing efforts being led by an individual with experience in implementing this type of strategic marketing? This leadership role is best filled by a senior-level marketing director or Chief Marketing Officer (CMO), an experienced outside consultant, or on rare occasions, a law firm partner who has demonstrated marketing savvy and experience.
• Are your practice group strategies or goals based on actual client or targeted non-client needs in a particular industry? By way of example, if the finance and transactions practice group is working to land more deals of a certain vintage, have you conducted primary research (directly asking the market place to specify needs) or secondary research (extensively analyzing and applying existing statistics, goals, and/or research results in a sophisticated new angle to uncover industry needs)?
• Are firm managers behind this type of marketing? If so, how do they show it? Is partner compensation tied into a specified level of participation or marketing success?
• Does the practice group have a true champion behind the effort?
• Has the practice group tied its strategies into the business planning process of the firm? How will success be measured?
• Was a budget created and approved to carry out the implementation of the strategic marketing plan for the practice group?

Industry or practice group marketing initiatives that tend to meet with limited success are those that:
• Do not offer specific or measurable goals and/or objectives.
• Are not connected to business goals.
• Have no real leader or champion for the effort.
• Have little or no firm management support – including a budget.
• Do not demonstrate or tie marketing into compensation at the firm level.

The Process Begins…

An inherent danger in the deployment of practice group is fragmentation. No matter what the size of the law firm, a unifying business plan must tie the efforts of the diverse groups together. The trick is to maintain a focus on market segments that mirror and support a coherent firm-wide purpose.

During the past several years, a handful of large law firms acknowledged the need to increase their business successes by hiring high profile management consulting firms such at McKinsey & Company or Boston Consulting. These top-end consultants are called in to conduct a thorough analysis of a firm’s position, its strengths and weaknesses, and to provide hard-core strategies with “ouch-honesty” frankness. Their findings are then applied to create a firm-wide business plan

Since the law firms see these types of consultants as being “on par” with themselves, culturally and intellectually, their findings are generally heard and implemented. The first action steps may involve creating a well-developed business plan. Marketing plans – both individual practice group and individual office plans – then evolve out of the business planning process. The goals and objectives of the business plan funnel down to the marketing plans, increasing their likelihood of success.

A Case Study

During the past two years, O’Melveny & Myers, an 800 attorney global law firm based in Los Angeles, has undergone just such a process. Ron Merriman, the firm’s Managing Director, Client Services and Development, feels that O’Melveny’s practice group marketing success began with an intensive strategic and business planning process undertaken by the firm over the last two years.

The firm reported that it looked at various business models that would allow it to enhance our client service capability, which they believed would accelerate their growth, and create more opportunities for our attorneys.

“We found that placing people in practice groups was important, but not enough. It is imperative to have the practices complement and drive the strategic direction of the firm. The firm-wide business planning process is the glue that binds all of this together as a one-firm effort. We took the business planning process and the resulting firm-wide strategy and cascaded it down to the practice groups. So what we have is a combination of firm-wide top down strategic direction delivered by a bottom-up performance of the practice groups,” said Merriman.

“One of the more important lessons we learned from that process was that we had a terrific opportunity to leverage our talent more effectively than before by organizing around distinctive practices,” Merriman continued. “We wanted to focus on higher value, and more important work for our clients across the globe. By focusing our talent into global practice units, we are able to deploy our attorneys to our best opportunities regardless of where they are in the world. Our practices are now less geographically focused. We have bigger client opportunities, higher value work, and the client feedback has been very positive.”

Merriman added, “The proof is always in the results, not the process. The firm is truly beginning to experience the positive outcomes from this firm wide initiative; as evidenced by a 22% growth rate and over a 33% increase in profitability for our fiscal year ending January 31, 2002.

“The firm’s practice-based business model and its team-based planning process all were supported by a new leadership model, and a merit-based compensation and reward system. From our experience, these are key elements for practice group marketing efforts to be successful,” said Merriman.

A Practical Application

Some law firms are involved in some amazingly creative marketing strategies, as is evident from the work of Ann Lee Gibson, a legal marketing consultant who advises law firms on strategic and tactical issues surrounding new business development. She encourages marketing teams to first learn “where the money is” before expending lawyers’ limited time, energy, and enthusiasm on marketing initiatives.

As a positive example of how a practice group can look before it leaps, Lee describes one firm’s financing practice group that expanded its role as underwriter’s counsel in financing deals. The group first studied published league charts that included dozens of details about deal dates, sizes, types, and players, going back many years. By analyzing these charts, the group identified recent patterns that revealed their own and their competitors’ relationship strengths and vulnerabilities.

Group members then scheduled meetings with several underwriters whose hiring histories suggested they might benefit from consolidating their approved lists of law firms retained as outside counsel. After listening to the firm's case for how consolidation could help close the deals more efficiently, several underwriters hired the firm to achieve just that.

And So…

There is no denying the fact that law firms of all sizes are becoming increasingly sophisticated in their marketing efforts. The increase in the number of firms applying practice group marketing strategies is a sign of this marketing maturity. Practice group marketing requires a careful analysis of the firm’s capabilities in order to examine where the firm is now and where it would like to be.

To increase the likelihood that your firm will find success in practice group marketing strategies, it is imperative that the goals of the practice group plan link to the firm’s business goals and objectives. Create a plan that is specific and measurable, be sure firm leadership is behind the effort, have the effort led by an expert, connect marketing efforts with some type of reward (compensation) system, and have the complete support of firm management.

Merry Neitlich is a principal of Extreme Marketing based in Irvine, CA. and Chicago, IL. She assists corporate legal departments and law firms in creating and implementing strategic/communication plans with specific and measurable results based on client needs. Merry can be reached at (949) 260-0936 or merry@extrememarketing.org.