Does Your Law Firm Really Need A CMO?
Law firms today are dealing with several different pressure points. As we’ve entered the client-empowered era, firms are facing more demands from their clients including increased transparency, and more value from services.
Here Gareth Thomas, Practice Group Leader at Intapp, discusses the pros and cons of having an in-house Chief Marketing Officer (CMO) and whether your laws firm really needs one or not.
Last year PwC‘s 2018 Law Firms’ Survey revealed that while some are thriving, a third of the Top 100 firms experienced profit reductions over the last three years. In addition to this, our research from earlier this year also revealed that over a third (38 percent) of UK lawyers, and 31 percent of US lawyers are considering a career change in the next year.
This combination of factors has continued to increase the strain on the profession that has – on top of all of the above – also had to embrace changing regulations such as the EU’s General Data Protection Regulation (GDPR) as well as the UK Government’s Making Tax Digital initiative. As the market evolves and the dynamics continue shift the balance of power, firms are facing a balancing act, trying to meet client demands while needing to find new avenues to grow and while navigating an increasingly competitive landscape that shows no signs of reducing in complexity and competitiveness
When you think of the essential components of the law firm, and the key drivers of success, many are guilty of thinking only of the lawyers and partners. The Chief Marketing Officer, while being seen as a trusted advisor and support to help the success of the law firm, hasn’t always been the role that you expect to be leading the business growth effort. However, that is precisely what they’re doing, and they are truly the best positioned to do so. I’ll explain why.
While it may seem like finding opportunities to grow the business are few and far between, law firms are actually already facing them without realising. Among the increasing complexity, many firms have incredibly valuable data about existing engagements just sitting in siloes within the organisation, unaware that they could be adding significantly to their business just by looking. The Pareto principle, which states that 80% of revenue and profit come from only 20% of clients applies here, however law firms are facing the “Super Pareto” effect, where 90% to 95% of profit comes from only 5% to 10% of work.
Many law firm CMOs are recognising this, and consequently finding ways to create strategies to bring this data together, out of siloes, into one place to derive insights to help business development. Firms are increasingly realising the value of the data at their disposal, and they are using the insights to make processes more efficient. However the CMO has the power to be the person in the firm to deliver proactive insights about clients and relationships that not only help find the best opportunities for business growth, but also enable the creation of innovative solutions and strategies to increase client happiness and retention. They can therefore also champion a more collaborative culture within law firms – a culture that has traditionally been difficult to establish in firms across countries and regions.
Nevertheless it’s the firms that equip their CMO to do this with the right tools that stand to benefit the most and to realise this the quickest. The CMO can only work their magic if the centralised process used to collect and derive insights from data is fit for purpose, and not reliant on disparate legacy systems that are incompatible with the firm’s workflow, or admin-heavy. In a Legal Marketing Association and Bloomberg Law study, legal marketers cited “lack of time” as their number one challenge. Without this challenge, the CMO could really be a vehicle for change in the firm, at a time when they are truly needed. So does a law firm really need a CMO? Well, yes, if it considers itself modern. With the right tools and support, the CMO will be at the helm of a firm’s modern growth strategy, ready to deliver the success it brings.