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Marketing Among Small Law Firms May 2008

Marketing Among Small Law Firms May 2008. Table of Contents. Objectives and Methodology 3 Executive Summary 4 Key Findings Marketing Responsibility 10 Marketing Spend 13 Time Spent on Firm Marketing 24 Utilization of Marketing Tactics 27

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Marketing Among Small Law Firms May 2008

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  1. Marketing Among Small Law FirmsMay 2008

  2. Table of Contents Objectives and Methodology 3 Executive Summary 4 Key Findings Marketing Responsibility 10 Marketing Spend 13 Time Spent on Firm Marketing 24 Utilization of Marketing Tactics 27 Significance of Internet Marketing 35 Detailed Methodology and Demographics 41

  3. Objectives and Methodology • In conducting this research, LexisNexis seeks to understand the marketing that small law firms undertake. • This study is a duplicate of a previous study conducted by Harris Interactive in 2005 for comparative purposes. • Harris Interactive conducted an online study among employees of small law firms (defined as having 20 or fewer attorneys) between August 30 and September 27, 2007. • Twenty-eight respondents who are employed by firms with 21-50 attorneys were removed for analytic purposes. • All qualified respondents were either solely or partially responsible for the decision-making process of marketing their firms. • Sample of current subscribers, past subscribers and non-subscribers was provided by LexisNexis. • A total of 908 interviews were completed • The survey was approximately 15 minutes in length. • Percentages may not add to 100% due to rounding, or because “don’t know/not sure” responses are not shown.

  4. Executive Summary ©2007, Harris Interactive Inc. H A R R I S I N T E R A C T I V E 4

  5. Executive Summary Responsibility for Marketing the Firm • Partners continue to have primary responsibility for planning and executing marketing plans. • More office managers and assistants are taking an active role in marketing decisions. • In 9% of firms, outside sources (marketing consultant, marketing service provider, outside agency) have primary marketing responsibility, unchanged from 2005. • Solo practitioners have increased the use of outside consultants by 29% and staff members other than a partner by 60% from 2005. • Mid-size firms (2-5 attorneys) increased their reliance on other staff members by 17% from 2005. • Larger firms (6+ attorneys) tend to rely less on a marketing consultant and more on other staff members, including marketing managers, in 2007 than they did in 2005.

  6. Executive Summary (cont.) Marketing Spend • Percentage revenue allocated to marketing activities has increased slightly over the past two years. Overall, firms are spending at a consistent dollar level between 2005 and 2007. Solo practitioners: • Increased their spending of 5% or more of revenue from 2005 (39% vs. 26%), and more than tripled their spending of 5% or more from 2002 (39% vs. 12%). • Are spending at a consistent dollar level as compared to 2005. 2-5 attorney firms: • More than doubled in their spending of 5% or more of revenue over the past five years (27% vs. 12%). • Decreased their spending of over $10K (30% vs. 33%) since 2005. 6-10 attorney firms: • Slightly increased their spending of 5% or more (14% vs. 12%) from 2005 and more than doubled from 2002 (14% vs. 6%). • Decreased their spending of over $10K (39% vs. 46%) since 2005. 11-20 attorney firms: • Followed the same pattern in allocating revenue to marketing activities in 2007 as in 2005. • Increased their spending of over $50K (19% vs. 13%) since 2005.

  7. Executive Summary (cont.) Time Spent on Firm Marketing • There have been no significant changes in 2007, as practicing law remains the primary activity of the firm, while marketing remains an important “non-law” activity. • Firms with fewer than 10 attorneys report no change from 2005 as to how much time they spend on marketing activities. • Firms with 11-20 attorneys report a slight decrease from 2005 in the percentage of time they spend per week on marketing. This may be due to assigning these duties to others within the firm, thereby freeing up their time to focus on practicing law. Utilization of Marketing Tactics • While firms still utilize proven marketing tactics such as yellow pages, legal listings, and client entertainment, they are increasing the use of firm Web sites and are embracing emerging technologies, such as blogs and paid placements on search engines to grow their practice. • The size of the firm determines to what degree various marketing tactics are utilized. Smaller firms are most likely to use yellow pages and legal listings, whereas larger firms utilize client entertainment to a greater extent. However, while client entertainment is still the leading choice among firms with 11-20 attorneys, it shows a significant drop from 2005 (23% vs. 32%). • The perceived value of Web sites as the highest valued marketing tactic, regardless of firm size, has not changed over time.

  8. Executive Summary (cont.) Significance of Internet Marketing • Law firms continue to use the Internet to promote their practice, and are using the latest techniques to attract potential clients. • Search engine optimization has increased from 2005 (55% vs. 50%), and slightly more firms in 2007 use online legal sites to attract clients (14% vs. 12%). • Four times as many firms report the use of blogs in 2007 as compared to 2005 (8% vs. 2%), indicating the desire to explore new methods in addition to traditional tactics to attract potential clients. Perceived Value of Marketing Tactics • Networking and word-of-mouth continue to be integral to building a law practice; however, online activities are also prevalent in integrated marketing campaigns. • Web sites are still considered a primary marketing tool for growing a firm’s practice, and more money is allocated towards this tactic than in 2005. • Blogs are beginning to demonstrate value in attracting clients; however, it should be noted that very little revenue is allocated towards this activity (1%). • While face-to-face interaction with potential clients is still important, client entertainment is decreasing in its value to attract potential clients, and less money is being allocated towards it from 2005.

  9. Key Findings ©2007, Harris Interactive Inc. H A R R I S I N T E R A C T I V E 9

  10. Marketing Responsibility

  11. Partner Member/associate/paralegal Office manager/assistant/secretary Marketing consultant/Marketing service provider/Outside agency Marketing manager/director/officer Other None Partners Drive Marketing Decisions • Partners continue to have primary responsibility for planning and executing marketing plans. • More office managers and assistants are taking an active role in marketing decisions, an increase of 27% from 2005 (14% vs. 11%). • In 9% of firms, outside sources (marketing consultant, marketing service provider, outside agency) have primary marketing responsibility, unchanged from 2005. 2007 2005

  12. Partner Member/associate/paralegal Marketing consultant/Marketing service provider/Outside agency Office manager/assistant/secretary Marketing manager/director/officer Other None Marketing Responsibility By Firm Size • Solo practitioners have increased the use of outside consultants by 29% (9% vs. 7%) and administrative staff members (office managers, assistants and secretaries) by 60% (8% vs. 5%) from 2005. • Mid-size firms (2-5 attorneys) also increased their reliance on administrative staff members by 17% (14% vs. 12%) from 2005. • Larger firms (6+ attorneys) rely less on marketing consultants and more on other staff members, including marketing managers, in 2007 than they did in 2005. • Firms with 6-10 attorneys increased their reliance on administrative staff members by 44% (23% vs. 16%). • Firms with 11-20 attorneys increased their reliance on marketing managers by 23% (16% vs. 13%). 2007 2005

  13. Marketing Spend

  14. % Revenue Spend Among Total Law Firms • Revenue allocated to marketing activities increased in the 5%+ category and decreased in the 2% category in 2007 as compared to 2005. % of Revenue Spend on Marketing by Total Law Firms % of Firms % of Revenue

  15. Dollar Spend Among Total Firms • Overall, firms are spending at a consistent level between 2005 and 2007. $ Spend on Marketing by Total Law Firms % of Firms $ Spent on Marketing

  16. % Revenue Spend Among Solos • Solo practitioners have increased their spending of 5% or more by 50% (39% vs. 26%) since 2005. • This has more than tripled from 2002. • Spending of 2% or less has decreased by 24% (38% vs. 50%) while spending of 4% or more has increased by 45% (45% vs. 31%) since 2005. % of Revenue Spend on Marketing by Solo Practitioners % of Firms % of Revenue

  17. Dollar Spend Among Solos • Overall, solo practitioners are spending at a consistent level between 2005 and 2007. $ Spend on Marketing by Solo Practitioners % of Firms $ Spent on Marketing

  18. % Revenue Spend Among 2-5 Attorney Firms • The amount of revenue allocated for firm marketing remains at a similar rate between 2005 and 2007. • Smaller firms have more than doubled their spending of 5% or more over the past five years (27% vs. 12%). % of Revenue Spend on Marketing by 2-5 Attorney Firms % of Firms % of Revenue

  19. Dollar Spend Among 2-5 Attorney Firms • Marketing dollars budgeted for 2007 have remained consistent to 2005. • Smaller firms have slightly decreased their spending of over $10K, down 9% in 2007 (30% vs. 33%). $ Spend on Marketing by 2-5 Attorney Firms % of Firms $ Spent on Marketing

  20. % Revenue Spend Among 6-10 Attorney Firms • Since 2005 there has been relatively little change in marketing spend among firms with 6-10 attorneys. • Spending of 5% or more has increased slightly from 2005, up 17% (14% vs. 12%), and is up 133% from 2002 (14% vs. 6%). % of Revenue Spend on Marketing by 6-10 Attorney Firms % of Firms % of Revenue

  21. Dollar Spend Among 6-10 Attorney Firms • The firms marketing budget in 2007 has remained fairly consistent to 2005. • The exception is that smaller firms have decreased their spending of over $10K down 15% since 2005 (39% vs. 46%). $ Spend on Marketing by 6-10 Attorney Firms % of Firms $ Spent on Marketing

  22. % Revenue Spend Among 11-20 Attorney Firms • The percentage of firm revenue allocated to marketing activities in 2007 is following a consistent pattern with 2005. % of Revenue Spend on Marketing by 11-20 Attorney Firms % of Firms % of Revenue

  23. Dollar Spend Among 11-20 Attorney Firms • Overall spending rate in 2007 has decreased from 2005. • The exception is larger firms have increased their spending of over $50K by 46% since 2005 (19% vs. 13%). $ Spend on Marketing by 11-20 Attorney Firms % of Firms $ Spent on Marketing

  24. Time Spent on Firm Marketing

  25. Marketing Remains Among theTop “Non-Law” Activities • There have been no significant changes reported in 2007, as practicing law remains the primary activity of the firm, while marketing remains an important “non-law” activity. 2007 2005

  26. Time Spent in 2005 Time Spent in 2007 1-10 Attorney Firms 1-10 Attorney Firms Practicing law Managing the practice Marketing/Business development 11-20 Attorney Firms 11-20 Attorney Firms Conducting research Professional/Personal development Other Top “Non-Law” Activities By Firm Size • Firms with 10 or fewer attorneys report no change in 2007 in time spent on marketing activities. • Solo practitioners report an increase of 23% in time spent on managing their practice (16% vs. 13%). • Firms with 11-20 attorneys report a slight decrease from 2005 in the percentage of time spent on marketing.

  27. Utilization of Marketing Tactics

  28. Directories and Client Interaction Remain the Preferred Tactics • Over time, yellow pages, legal listings, client entertainment, and firm Web sites remain the top marketing tactics utilized among law firms. • Spending on firm Web sites has increased 23% (16% vs. 13%) from 2005. • Attorneys are embracing emerging technologies (such as pay-per-click and blogs) in their marketing mix. % Spend on Marketing Tactics Yellow pages Legallistings FirmWeb sites Event sponsorships Giving/hosting seminars PR/writing articles Referralservices Pay-per-clickplacements Local outdoor ads Sponsorships on legal Web sites Blogs Client entertainment

  29. How Size Affects Choice of Marketing Tactics Smaller firms (1-5 attorneys) • Firms with 2-5 attorneys have increased their spending on their Web sites from 2005 by 64% (18% vs. 11%), but have allocated less of their budget for client entertainment, down 21% (15% vs. 19%). • 2-5 attorney firms have decreased their yellow pages spend by 16% (21% vs. 25%). • Solo practitioners spend more on pay-per-click than larger firms (4% vs. 1%); they have also doubled their spending on sponsorships on legal Web sites (2% vs. 1%) since 2005. Larger firms (6-20 attorneys) • Firms with 11-20 attorneys have decreased their spending on client meals and entertainment by 28% (23% vs. 32%) since 2005. However, it is still a primary activity within their budgets as compared to smaller firms. • Firms with 11-20 attorneys also tend to spend more on event sponsorships, than smaller firms. • Spending on event sponsorships among firms with 11 to 20 attorneys has increased by 18% (13% vs. 11%) since 2005. • Firms with 6-10 attorneys have decreased their spending on outdoor advertising by half (2% vs. 4%) since 2005. • With regard to live networking opportunities, 6-10 attorney firms have increased spend on event sponsorships by 25% (10% vs. 8%), but decreased client entertainment by 10% (27% vs. 30%) since 2005.

  30. Current % Spending On Marketing Tactics Among Solos • Over time, yellow pages, legal listings, client entertainment, and firm Web sites are still top marketing tactics utilized by solo practitioners. • Spending on yellow pages listings has decreased slightly from 2005, while spending on legal directories, client entertainment, and firm Web sites have experienced a slight increase. • Spending on online tactics has doubled, with both pay-per-click (4% vs. 2%) and sponsorships on legal Web sites (2% vs. 1%) increasing by 100% from 2005. Current % Spending on Marketing Tactics Among Solos Yellow pages Legal directorylistings FirmWeb sites Event sponsorships Giving/hosting seminars Referralservices Sponsorships on legal Web sites Blogs Client entertainment Pay-per-clickplacements PR/writing articles Local outdoor ads

  31. Current % Spending On Marketing Tactics Among Firms with 2-5 Attorneys • Yellow pages, legal directory listings, firm Web sites, and client entertainment are still important tactics among firms with 2-5 attorneys. • Spending on firm Web sites is up 64% (18% vs. 11%) from 2005. • Spending on yellow pages listings, legal directory listings, and client entertainment decreased from 2005 to 2007, while spending on firm Web sites has increased. Current % Spending on Marketing Tactics Among Firms with 2-5 Attorneys Yellow pages Legal directorylistings FirmWeb sites Event sponsorships Giving/hosting seminars PR/writing articles Referralservices Local outdoor ads Sponsorships on legal Web sites Blogs Client entertainment Pay-per-clickplacements

  32. Current % Spending On Marketing Tactics Among Firms with 6-10 Attorneys • Client entertainment, yellow pages, legal directory listings, and firm Web sites are still the preferred marketing tactics among firms with 6-10 attorneys. • There is less spending on client entertainment in 2007 than in 2005, although spending on yellow pages and legal directory listings has risen slightly. • Spending on firm Web sites remains unchanged from 2005. Current % Spending on Marketing Tactics Among Firms with 6-10 Attorneys Local outdoor ads Pay-per-clickplacements Sponsorships on legal Web sites Legal directorylistings FirmWeb sites Event sponsorships Giving/hosting seminars PR/writing articles Referralservices Blogs Client entertainment Yellow pages

  33. Current % Spending On Marketing Tactics Among Firms with 11-20 Attorneys • Client entertainment, firm Web sites, event sponsorship, legal listings, and yellow pages are still important marketing tactics to larger firms. • Spending on client entertainment has decreased by 28% (23% vs. 32%) since 2005. • Spending on firm Web sites, event sponsorships, legal directory listings, and yellow pages has risen since 2005. Current % Spending on Marketing Tactics Among Firms with 11-20 Attorneys Event sponsorships Legal directorylistings PR/writing articles Referralservices Local outdoor ads Blogs Client entertainment FirmWeb sites Yellow pages Giving/hosting seminars Pay-per-clickplacements Sponsorships on legal Web sites

  34. % Respondents that Indicated Tactic as Valuable* 2007 2005 Law firm Web sites Printed/online legal directory/listings Public/media relations/writing articles Giving/hosting seminars Client meals/entertainment Event sponsorships/community events Print/online yellow pages Referral services Sponsorship/placement on legal Web sites Pay-per-click placements on search engines Writing/hosting a blog Local outdoor advertising Perceived Value of Marketing Tactics • Networking and word-of-mouth tactics are still integral to building a law practice; however, online activities are also prevalent in integrated marketing campaigns. • The perceived value of Web sites as a primary marketing tool for growing a practice, regardless of firm size, has remained consistent over time. • Most other marketing tactics have slightly lesser perceived value than in 2005. N/A *Top 3 box score (Very Valuable, Valuable, Somewhat Valuable)

  35. Significance of Internet Marketing

  36. Base: Have firm Web site (n=690) • 55% use search engine optimization • 24%use paid placement on search engines • 14%use online advertising • 8% use blogs Base: Have firm Web site (n=770) • 50% use search engine optimization • 24%use paid placement on search engines • 12%use online advertising • 2% use blogs Internet Marketing Among Total Firms • Law firms continue to use the Internet to promote their practice and are using the latest techniques to attract potential clients. • Search engine optimization has increased 10% from 2005 (55% vs. 50%), and slightly more firms in 2007 use online advertising to attract clients, up 17% (14% vs. 12%). • Four times as many firms report the use of blogs (8% vs. 2%) to attract potential clients, up 30% from 2005. 2007 78% of firms have a Web site 22% of firms do not have a Web site 2005 80% of firms have a Web site 20% of firms do not have a Web site

  37. Base: Have firm Web site (n=225) • 52% use search engine optimization • 28%use paid placement on search engines • 15%use online advertising • 8% use blogs Base: Have firm Web site (n=229) • 48% use search engine optimization • 28%use paid placement on search engines • 14%use online advertising • 2% use blogs Solo Practitioners • Search engine optimization has increased by 8% from 2005 (52% vs. 48%). • Four times as many solo firms report the use of blogs (8% vs. 2%) to attract potential clients. 2007 32% of firms do not have a Web site 68% of firms have a Web site 2005 27% of firms do not have a Web site 73% of firms have a Web site

  38. Base: Have firm Web site (n=304) • 60% use search engine optimization • 25%use paid placement on search engines • 15%use online advertising • 9% use blogs Base: Have firm Web site (n=372) • 50% use search engine optimization • 26%use paid placement on search engines • 12%use online advertising • 2% use blogs Firms with 2-5 Attorneys • Search engine optimization has increased by 20% from 2005 (60% vs. 50%). • More than four times as many 2-5 attorney firms report the use of blogs (9% vs. 2%) to attract potential clients. 2007 20% of firms do not have a Web site 80% of firms have a Web site 2005 20% of firms do not have a Web site 80% of firms have a Web site

  39. Base: Have firm Web site (n=105) • 50% use search engine optimization • 17%use paid placement on search engines • 10%use online advertising • 3% use blogs Base: Have firm Web site (n=113) • 50% use search engine optimization • 18%use paid placement on search engines • 12%use online advertising • 3% use blogs Firms with 6-10 Attorneys • Search engine optimization and the use of blogs have remained consistent with 2005 (50% and 3% respectively). • The use of paid placement on search engines and online advertising in 6-10 attorney firms have decreased slightly since 2005. 2007 7% of firms do not have a Web site 93% of firms have a Web site 2005 12% of firms do not have a Web site 88% of firms have a Web site

  40. Base: Have firm Web site (n=56) • 50% use search engine optimization • 18%use paid placement on search engines • 13%use online advertising • 7% use blogs Base: Have firm Web site (n=56) • 55% use search engine optimization • 11%use paid placement on search engines • 4%use online advertising • 5% use blogs Firms with 11-20 Attorneys • Search engine optimization has declined by 9% from 2005 (50% vs. 55%). • The use of blogs to attract potential clients in 11-20 attorney firms has increased by 40% since 2005 (7% vs. 5%). 2007 2% of firms do not have a Web site 98% of firms have a Web site 2005 8% of firms do not have a Web site 92% of firms have a Web site

  41. Detailed Methodology and Demographics ©2007, Harris Interactive Inc. H A R R I S I N T E R A C T I V E 41

  42. Detailed Methodology A study of small law firms was conducted by Harris Interactive on behalf of LexisNexis. A total of 908 interviews were conducted via an online survey between August 30 and September 27, 2007among employees of small law firms (defined as having 20 or fewer attorneys). The length of the questionnaire was approximately 15 minutes. SAMPLE SELECTION Sample of current subscribers, past subscribers and non-subscribers was provided by LexisNexis. Qualified respondents for this study identified themselves as working as a solo practitioner or in a law firm with 20 or fewer attorneys and were either solely or partially responsible for the decision-making process of marketing their firm. ONLINE INTERVIEWING PROCEDURES Interviews were conducted using a self-administered, online questionnaire, via proprietary, Web-assisted interviewing software. The HPOL interviewing system permitted online data entry of interviews by the respondents. Questionnaires were programmed into the system with the following checks: 1.      Question and response series 2.      Skip pattern 3.      Question rotation 4.      Range checks 5.      Mathematical checks 6.      Consistency checks 7.      Special edit procedures

  43. Detailed Methodology (cont.) ONLINE INTERVIEWING PROCEDURES (cont’d) To maintain the reliability and integrity in the sample, each invitation contained a password that was uniquely assigned to that e-mail address. A respondent was required to enter the password at the beginning of the survey to gain access into the survey. Password protection ensured that a respondent completed the survey only one time. To increase the number of respondents in the survey and to improve overall response rates, up to two additional reminder invitations were typically mailed at 2-4 day intervals to those respondents who had not yet participated in the survey. All data were then tabulated, checked for internal consistency and processed by computer. A series of computer-generated tables were produced for each of the key sample groups that showed the results of each survey question, both by the total number of respondents and by the key subgroups.

  44. Demographics of Respondents - 2007 Size of Firm Main Area of Practice 38% 43% 13% 6% Only responses of 5% or more are shown. Gender Age Region

  45. Demographics of Respondents - 2005 Size of Firm Main Area of Practice Only responses of 5% or more are shown. Gender Age Region

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