Posted on behalf of the UK Martindale Team:
History tells us that now is the best time for any law firm to prepare for the next economic boom, argues Brian Coventry.
For law firm managing partners and marketing managers attending the recent “M-Club” seminars in Brussels and Madrid, Brian Coventry had a surprisingly up-beat message. Mr Coventry, managing director of software solution provider APS – Billback, said that history tells us that all economic downturns are invariably followed by another period of sustained growth – typically lasting between seven to ten years. What’s more, recent stock market rises are providing an early indicator of possible good times ahead. “Stock markets always run ahead of the real economy,” he explained. “They are an indicator of what will happen in the next six to nine months.”
Mr Coventry argued that marketing managers should make use of this understanding of the economic cycle when planning and timing their firm’s future marketing spend. In the current economic climate, many firms’ are under pressure to reduce head count, cut marketing budgets and to reduce costs generally. In fact, Mr Coventry argued that this approach, while understandable, was wrong-headed. If the downturn was shorter than previous recessions, then firms that did so, he suggested, would only have to hire replacement staff once economic growth had returned – by which point, they would be forced to compete for talent. Thankfully, he said that many of the more enlightened firms now understood this dilemma. As a result, some are working on ways to retain key talent during the slowdown, rather than lose them altogether.
Of course, many law firms have also followed the conventional approach, and cut back on marketing in response to the downturn. Such firms typically only began to rebuild their marketing capability once it is clear that growth is returning, said Mr Coventry. Therefore, he argued, firms who continue to promote themselves at the early stages of the economic revival have two key advantages. Firstly, they will enjoy far greater visibility among potential clients. Secondly, having invested money on maintaining existing relationships during the downturn, such firms will be best-placed to win new work – from the moment that growth returns. By maintaining their investment programme, firms have prevented existing clients from entering the so-called “zone of perceived indifference”, which causes them to “wander off” to rival firms. “If firms don’t put energy into a relationship, it dies,” Mr Coventry explained. Likewise, money invested in providing “client relationship training” for partners, some of who were naturally reluctant to promote themselves, would help reduce the danger of them from shrinking back into their “comfort zone”. This too would help ensure that lawyer-client relationships were maintained during the downturn, he argued.
In terms of persuading senior managers of the need to maintain their investment in marketing during the downturn, Mr Coventry has two suggestions. In relation to the firm’s managing partner, Mr Coventry suggested that marketing managers’ argument should appeal personal self-interest, as well as that of the firm. “When you consider the average age of a managing partner, it is likely that they only be working for one more economic cycle. If they are going to get the most value out of the economy – both for their firm, but also for their families – they will need to take decisions that will allow the firm to take full benefit of the entire boom run,” he said. And continuing to promote the firm during a downturn would make that more likely.
In relation to the firm’s financial personal, Mr Coventry argued that marketers must also learn to “speak the same language” as those who controlled the firm’s budgets. A debate where one side was speaking in “marketing” and the other side speaking in “financial” was a recipe for disaster. So, rather than referring to their spending as “marketing” – which carries with it the perception of intangible luxury – be clearer about what the spend relates to for example “client-based management”, is specific he suggested. “Watch the brave managing partner who proposed to cut spending on client-based management,” he said.
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