A solution to what is becoming a fairly widespread law firm management dilemma is taking hold. It seems to be increasingly popular with midsized and smaller firms that understand a structured, disciplined marketing and business development effort is a key to not just growth but even survival in an increasingly competitive environment: Retaining an “outsourced marketing department” to assess, plan, create, implement, manage and measure the ROI of a firm’s business development activities.
The beauty of outsourcing is that a firm pays only for the expertise it needs, when it needs it. Yet its ongoing access to senior people who provide the talent a firm requires to generate new business.
“We’re large enough to need a real marketing function,” the managing partner of an Illinois law firm with 31 attorneys told me. But, he complains, “The problem is, our staff count and payroll limits are such that we can’t justify even a coordinator let alone someone at a manager level.”
Here’s good news for him, and other managing partners: The annual cost of a comprehensive outsourced department is likely to be considerably less than the salary a firm would pay for a junior marketing manager.
Firms with up to roughly 30 or 35 attorneys face revenue and profit pressure from two, sometimes conflicting, realities:
- Smaller competitors often offer a fee advantage because their lower fixed overhead costs make it somewhat easier to hold down invoices.
- But the greater resources available to larger competitors means a capacity to go after new clients, including poaching those currently working with firms in what Jeremy Miller calls in a parallel context “the squishy middle market” – firms with too few attorneys or chartered accountants to afford a full-time marketing department but too small to grow meaningfully without adding the function.
Outsourcing enables a firm to confront and overcome the financial and competitive pressures nearly all firms face, providing even smaller ones access to talent they otherwise could not afford.
Outsourced marketing costs even less than the fee because there are no payroll taxes, and no benefit costs or allowances for accrued vacation time or severance. Together, taxes and benefits generally add 35% to the total cost of an employee. A coordinator-level marketing staffer with limited experience who’s earning $4,000 per month actually costs a firm more than some $60,000 annually. And this doesn’t even include the hidden infrastructure costs of an employee such as providing office space, a computer and access to marketing technology.
Beyond the dollars, there’s a legitimate question of how the work gets done.
As a practical matter, only the very largest firms have as large and diverse a staff as the range of talent a quality outsourcing firm can draw on at a moment’s notice to address a marketing opportunity, issue or challenge regardless of whether it was planned or that arises suddenly.
One reason an outsourcing firm can provide such a range of capability is that the firm has access to a marketing director, a project manager, copywriters, blog editors and writers along with content specialists, website developers, graphic designers, database specialists, SEO gurus, social media strategists, and e-communications experts.
Yet because a firm may need any of these specialists only for as little as an hour or two each month, the cost becomes affordable for nearly every firm. So the attorneys have access to a fully functional marketing department as if they were practicing in a much larger organization.
Making It Work
An outsourced marketing department is not right for every smaller and midsized firm, many of which view business development not much more than a series of lunches and one-off activities such as mailing out an Olde Tyme newsletter every so often or taking a good client to play golf.
For the endeavor to work successfully, the firm needs to make a serious commitment to using disciplined marketing as a rigorous tool to drive real growth. The partners have to make a conscious decision to do things differently before even contacting a possible resource. Without this internal pledge, a firm would be wasting its money and the outsourcer’s time.
But a firm that recognizes the value of employing marketing as a rigorous management growth device, retaining an outsourced marketing department is a way to “punch above their weight” when it comes to competing aggressively in an increasingly competitive era.
Jim Bliwas works in strategic marketing and communications for PSM Marketing.