Strategic Planning and Marketing

Strategic Planning and Marketing

Marketing should be part of any firm's strategic plan. But this can be effective only if the marketing plan includes the situational analysis and goal-setting process described in the previous section, and if the firm has a clear understanding of the application and benefits of law firm marketing.

In 1977, the dam holding back lawyer advertising burst. In an historic decision on June 27, the United States Supreme Court overturned the decision of the Arizona court in Bates v. Bar of Arizona. Although the ruling was essentially limited to print advertising, many individual lawyers throughout the United States have begun advertising on radio and television. This section will not detail the legal implications of the decision, but will consider the practical aspects of it.

The rules on advertising and marketing have been liberalized over the years since Bates.

In June 1988, the Supreme Court of the United States knocked out one of the last restraints on lawyer advertising and ruled that lawyers have a First Amendment right to solicit clients through targeted mailings to individuals known to have legal problems. In Shapero v. Kentucky Bar Association, 486 U.S. 466 (1988) , the Court decided that, consistent with the First Amendment, a state may not completely proscribe targeted, direct mail advertisement by lawyers for pecuniary gain, without finding that the advertisement was false, deceptive, or misleading. The ruling directly invalidated the American Bar Association's Model Rule of Professional Conduct 7.3 and will affect many states, which have similar prohibitions on mailed advertisements with a state agency.

It should be noted that each state has its own rules on the legal ethics of marketing and that the ABA Model Code of Professional Responsibility has not been adopted by a majority of the states. Therefore, each state's rules must be consulted to determine that pertinent ethical rules for advertising and marketing have been met.

Definition of Marketing

Many lawyers are still confused about the definition of marketing. In the minds of many lawyers, marketing is synonymous with advertising. Advertising is a form of promotion and, as such, is a marketing tool. Likewise, marketing and sales differ. Sales is simply a part of marketing; it is the act of influencing and closing an economic transaction. Sales and advertising, as well as collateral materials (brochure, website, newsletters, client alerts) and public relations are only the visible indicators of a firm's effort to implement a marketing program.

Marketing also includes all of a law firm's activities involved in profitably satisfying the needs and wants of clients. It includes client relationship management, market and client research, pricing, service offering, new office locations, firm brand/identity and other factors as well as the more visible types of marketing listed above. Although some lawyers would deny that they have ever "marketed," few would deny that they try to satisfy current clients and obtain new clients. These are the basics of marketing.

The Need for Marketing

Law firms face increasing challenges in the 21st Century. The economics of the practice (revenue, profits, capitalization) and the demographics of lawyers (numbers of attorneys and their distribution by age and gender) have changed dramatically. Even larger changes have occurred in the marketplace for legal services. We have seen transition from a sellers' marketplace (where demand for legal services exceeded supply and law firms determined quality and pricing) to a buyers' market (where there is an oversupply of legal services providers, providing bargaining power to buyers). Accounting firms, insurance planners and financial institutions now compete with many law firms. In addition, many legal services are becoming internalized as corporate law departments expand and/or consolidate the number of outside law firms they use.

These trends are having a great impact on law firm profitability, planning and marketing. There are short and long-term strategies to deal with these developments successfully. The short-term tactics focus on increasing firm revenues by meeting or exceeding current client needs as well as enhancing the business and practice management of the law firm. Long-term strategies often include rethinking firm organization (e.g., admission requirements and classes of partners, permanent leveraging through non-partner fee earners and partner retirement considerations), geographic expansion, and better business development through prudent use of marketing.

The source of this article is “How to Manage Your Law Office.” subscribers can access this publication online.