It happens every year. Often, shortly after Labor Day, when the air begins to turn crisp, marketing professionals all across the country go missing. Suddenly, their friendly open-door policies are transformed and those doors shut. They make calls to accounting, marketing partners, COOs and firm administrators to get information to the marketing team. It’s budgeting season, and marketers are scrambling to show results for this year so that they can secure as many dollars for the projects they need to and want to do in the future year or years.
The Problems with Budgeting
Recently, Moiré Marketing Partners spoke with several LMA members to find out about their challenges and strategies when it comes to budgeting. Nathalie Daum, director of marketing for Lewis and Roca, pointed to four main difficulties most law firm marketers face when budgeting:
1) Lack of an existing budget and/or little to no institutional knowledge as to how money was allocated to marketing in the past. (Believe it or not, there are many firms out there that still do not have a formal marketing budget.)
2) Younger marketers who come up through the ranks within a firm say they receive little to no mentoring on how to budget or approach the task.
3) Senior marketers who move to a firm find that their new firm approaches budgeting in a far different manner than they are accustomed. As a result, even experienced marketers are faced with spending long hours getting up to speed learning how the firm allocates its budget and what department is responsible for budget line-items.
4) Some marketing professionals who are new to the legal profession are inexperienced with the unique ins and outs of the partnership model and institutional expenditures inherent in most firm’s marketing budgets.
Clearly budgets can be extremely frustrating. So, how do you get started? (And if you think February is too early to start, keep reading.)
Develop a Strategy
“CMOs who have developed successful marketing budgets have one thing in common—they base their budgets on a marketing strategy,” according to Jonathan Fitzgarrald, director of marketing for Greenberg Glusker. Moire’s own examination of the budgeting habits of LMA members reflects Fitzgarrald’s belief.
We have found that most CMOs didn’t adapt what was done before them, nor did they force their own marketing cultures onto their law firms. They did their best to learn from their predecessors, colleagues and key stakeholders within the firm regarding what worked in the past, what didn’t work and what the firm’s business priorities are in the coming year.
Many started by reviewing their firm’s strategic business plans. Where there is no strategic plan, you should learn as much as you can about the compensation system within your firm. Marketers suggest that without a strategic plan, the partners’ compensation system becomes the default strategy and you end up spending your budget on the whims of the lawyers or on an ad hoc basis. These types of expenditures are often based on an emotional need of an individual, as opposed to a strategic need of the firm or practice group. And measurable return on investment (ROI) is next to impossible with such expenditures.
So whether you want to launch a new Web site, are plotting a series of educational lunches for your practice groups or are planning for a new client relationship management system, you need to take a strategic approach to everything you implement and plan for in the coming year.
Jody Jackson, director of marketing at Lewis Brisbois Bisgaard & Smith, suggests that you “map out where you need to go and how to get there. Pull data from as many resources as possible. Determine if you want to focus more on retaining clients or on developing new relationships.”
This will provide you with a touchpoint plan for the greatest growth opportunities. the central goal of this plan should work to convey your firm’s credibility, its personality and your value proposition.
Build a Budget
Once you have your strategy in place, it’s time to build out a spreadsheet that includes your initiatives and a timeline. It’s a good idea to set aside approximately 3 to 5 percent of your budget as a “prudent reserve” for unseen or unknown opportunities or expenditures that inevitably pop up throughout the course of the year. If a lawyer wants to do a particular trade show or sponsor a one-time event, you can say, “this expense must come out of your budget.” However, with the 3 to 5 percent cushion set aside, you have the ability to say yes on occasion.
We suggest you have two types of categories. the first is your broad firm budget that includes initiatives not tied to a specific practice area or industry group; and the second includes items that are dedicated to areas of practice that you are working to build or promote.
Within each of these categories include marketing initiatives that focus on the audiences you want reach as a result of your touchpoint plan. They may include existing clients, new business prospects, influencers or referral sources, etc. Remember to keep in mind the goal of your plan. Some of your activities may not have costs associated with them, but include them on the budget and in your plan. In its survey, Moiré Marketing Partners consistently heard that when these activities were not submitted on the written plan, they were often overlooked or ignored.
Strategy and Budget in Place
Make your budget as information rich and as detailed as the firm needs. Keep good records during the course of the year regarding what worked and what didn’t, so you can be more efficient next year (or so that future marketers can add efficiency).
The main thing to remember is that there is no magic bullet when it comes to budgeting. No one-size-fits-all. Each firm’s budget has to be unique to the firm and take into consideration who you are and what you can realistically get done and completed in the given period of time that the budget covers.
Finally, there are a lot of online resources, including down-loadable PDFs and sample budgets. Take advantage of this information. Look on the LMA Web site under the Resource Center, http://www.legalmarketing.org/member-resources/resource-center (member-only link), where you can find valuable information from LMA members to give you guidance and assistance.
“Marketing plans shouldn’t be complicated,” writes Heather Milligan, director of marketing at Barger & Wolen and author of the blog “the Legal Watercooler.”
Quite plainly, it’s all up to you. Budgeting is an important part of our jobs and adds greater credibility to marketing.
So open those office doors, come out when it’s time to budget (or even before) and listen to the other leaders within your firm for direction. While you may never look forward to doing budgets, you can make the process easier, smoother and, yes, more enjoyable.
Reprinted from Strategies: The Journal of Legal Marketing, V12.N02. Permission granted by the Legal Marketing Association, Chicago, IL.
