Just as we thought we had turned a corner, 2022 has brought fresh challenges – supply chain problems, labour shortages, the battle for top talent (dubbed the Great Resignation), and most recently, economic worries of inflation and the risk of recession. All these issues impact the professional services firms too, including legal.
However, if the last three years are anything to go by, it doesn’t have to be doom and gloom. Our research shows that despite the false starts and challenges over this period, some firms have managed to achieve growth and profitability, attaining over 20% annual revenue growth.
What did these high growth firms do that other firms didn’t?
Fundamentally, the high growth firms adapted their marketing and business development (BD) functions to address the challenges posed by the pandemic environment, adopting specific technologies, strategies and techniques, all of which have enabled them to maintain their growth.
Disruption an opportunity
All firms experienced disruption due to Covid, but the high growth firms astutely viewed the pandemic as a disruption to the traditional ways of doing business and maintaining client relationships. They saw the disruption as a unique opportunity – and acted and invested in it accordingly – to gain a step ahead of the competition and dislodge otherwise entrenched incumbents.
For instance, the high growth firms proactively embraced digital marketing and technology. In contrast, the firms that saw low growth or no growth tended to be more reactive in their approaches. Viewing the pandemic as a threat, they cut budgets and reduced staff, and as a result not only experienced the downside of the initial recession – but actually opened the door for more aggressive and nimble firms to actively take market share.
Marketing and BD challenges in the new landscape
The high growth firms carefully revisited their marketing challenges in the new landscape. Foremost, they recognised the importance of good quality data, an area that has topped high growth firms’ focus consistently across the last three years. In a largely digital, dispersed and remote working business environment, email marketing became more acceptable to generate and nurture leads, making a clean, accurate and high-quality marketing database extremely important. These high growth firms continued to invest in growing their marketing database too by using proven strategies, such as promoting gated content to augment and clean the data on a regular basis.
The second biggest marketing challenge that firms face is a lack of lawyer cooperation in marketing and business development. This is no surprise as the issue is historical, but perhaps has a higher bearing on BD efforts in the pandemic environment. So, the high growth firms found the solution in technology, relying on CRM systems, utilising insights from marketing analytics to inform content creation, decision making, and such.
All this, yet again, is in stark contrast to low growth or no growth firms who struggled to allocate sufficient marketing budget, make an investment in marketing technology or even adapt existing systems to support their processes in the new landscape.
Likewise, from a BD standpoint, sales were hit hard due to competition, making it firms’ number one challenge – followed by a lack of follow-ups, either due to lack of resources or because they were pursuing too many opportunities. This brought to the fore the need for a long-term BD strategy.
New marketing challenges require renewed priorities
So, as marketing and BD challenges changed, so did the priorities. The high growth firms saw the value of brand differentiation and thus prioritised activities that helped them to establish a brand identity that separated them from the competition. For example, offering high level thought leadership on specific areas of law or publishing original research were powerful tools that helped establish a distinguished brand identity. On the other hand, only about 15% of no growth firms adopted this approach to differentiate themselves and attract more qualified leads.
Even prior to the pandemic, high growth firms have relied more heavily on marketing and BD technologies, compared to their low growth or no growth counterparts. For example, high growth firms rely on CRM systems and marketing automation platforms and are already heavy users of email marketing applications. Since the pandemic, however, they have further deepened their reliance on technology by using reporting and analytics for tracking things like sales pipelines, relationship risks, and marketing and BD metrics.
Unfortunately, no growth firms have tended to completely forego this approach and the use of historical data for setting goals.
Our research has illustrated that most of the top challenges that firms face for winning new business are in fact internal and related to driving action – such as follow up on activities, lawyer participation, having a long-term strategy and prioritisation so that they only pursue the best opportunities. And to successfully do this, good data is needed. Simultaneously, to truly address the challenges of winning new business, firms also need the ability to draw insights from the data – so that they can make the right decisions, and those decisions can ultimately be enabled via the right toolset.
In other words, firms need the right overarching BD ecosystem and culture – that can be reliably facilitated, at scale – if underpinned by high-quality data. High growth firms have grasped this, as unlike the low growth or no growth firms, they are capturing data and deriving insights to help them to drive new business and overall growth.
With a solid foundation of technologies for CRM, email management, and marketing automation, it then comes as no surprise that high growth firms already have their sights set on technologies related to digital transformation—including AI, blockchain, and big data analysis – as they push ahead on their winning streak. There’s no reason the low growth or no growth firms can’t take a leaf out of the book of these high growth firms, though. The opportunity is truly for the taking – the technology is available to firms of all sizes – so low growth firms can genuinely adopt the same tools to level the playing field – if they wanted to.
Please note: The research mentioned above is an independent study commissioned by the Hinge Research Group over 2019 – 2021 to understand what high growth firms are doing differently in the areas of marketing and BD, and to pinpoint the specific strategies and techniques that have enabled these organisations to maintain their growth.
About the author: Steve Zangari is Commercial Director for EMEA and APAC, LexisNexis InterAction.