Generating a reliable revenue stream from both existing and new clients underpins the health of a law firm. Yet faced with a shifting workplace model, intensifying competition, and a fast-moving digital landscape, how do law firms navigate business development in 2024? Our new guide for law firms aims to answer this question and more.
Client business: positive outlook
Amidst the uncertainty of rising interest rates, the recent collapse of three U.S. regional banks, and the expanding geopolitical conflict in the Middle East and Ukraine, demand for legal services is holding strong; forty-one percent of clients planned to increase legal spending in 2023 and only 20% expected to cut back. The Thomson Reuters Institute’s Law Firm Financial Index (LFFI) backs up this prediction, revealing a sharp increase in Q2 this year and a 1.5% year-over-year increase in demand for legal services.
To set the stage for continued growth, law firms need to find a way to capitalize on demand and drive business from new and existing clients. Recognizing and overcoming the challenges impeding new business opportunities is a key step in building your firm’s business development and marketing strategy.
Challenges impacting business development strategies for law firms
Executing an effective business development strategy is complicated by a number of internal and external factors and challenges. Let’s discuss a couple of these obstacles and what you can do to help your legal practice find solutions.
[For a more in-depth discussion of the top challenges facing law firms heading into 2024—and how your firm can successfully navigate the issues to thrive—read the comprehensive guide.]
The workplace has changed. A lot.
The labor force and the workplace have both changed significantly since before the pandemic. In 2021 and 2022, nearly 90 million Americans quit their jobs. The aptly-named Great Resignation precipitated labor shortages at many firms, with competition intensifying for both legal staff and marketing and business development professionals. To make matters worse, law firms are competing against all industries, not just the legal sector, for marketing and business professionals to power their pitch process.
The pandemic also changed how and where people work, with many employees continuing to work from home or adopting a hybrid model in the name of work-life balance. Is your firm successfully navigating flexible work environments to attract top talent?
In addition, the function of business development at law firms is transitioning away from a generalist approach characterized by traditional law firm marketing tactics to a growing demand for AI-driven digital marketing, data analytics, and strategic business development skills. Are you optimizing digital resources and skills as part of your business development strategy to produce results that translate to increased client revenue?
How can your law firm address these workplace challenges?
- Outsource marketing and business development professionals (especially CRM and support roles) to ensure the necessary resources to execute your firm’s business development strategy.
- Implement applications and AI-powered tools that automate, accelerate, and streamline business development processes and tasks (e.g., email marketing platform, proposal management software, presentation templates) to create efficiencies that help reduce the need to hire additional staff.
- Deploy cloud-based solutions and secure communication platforms to support hybrid and remote working models, enabling seamless collaboration among team members and with clients, regardless of their location.
The volume of data and content is exploding.
As the legal landscape becomes more client-focused, law firms are amassing vast volumes of data—from information about markets, sectors, and locations to the clients, prospects, and competitors that operate within them.
While this repository of data can help law practices leverage valuable data insights to personalize the client experience across business development (e.g., pitching legal services to prospective clients, cross-selling services tailored to an existing client’s needs) and billable legal tasks, ensuring data quality and integrity is a challenge.
In fact, when ILTA asked law firms what concerned them most about marketing technology, respondents said that “data quality” and “creating usable data,” were keeping them up at night. Did you know most CRM/ERM and eMarketing systems at law firms are rife with “incorrect, incomplete, dated, and duplicated records?” Are you sleeping soundly—or is the challenge of managing, organizing, and leveraging the data in your firm causing sleepless nights too?
Bad data can derail even the best-designed business development strategies. Poor quality data translates to inaccuracies in the information available to the team, costing your firm time, money, and potentially reputational damage.
Just think if your CRM data is incorrect or incomplete. The invitations to your latest webinar—perhaps a webinar intended to attract new client business—won’t reach the intended recipients, negatively impacting attendance, brand perception, and ROI.
On the pitch front, the quality of marketing content and the robustness of your content management capabilities directly impact your firm’s ability to acquire new clients and generate more business from existing clients.
Consider if your marketing assets (e.g., firm boilerplate, partner bios) are incorrect or outdated. Creating accurate, personalized pitches and presentations will be a struggle, regardless of the sophistication of your CRM or proposal management software.
How can your law firm address these data volume and quality challenges?
- Implement a robust data governance strategy + robust tech stack to ensure your firm has accurate, relevant data available in a usable format.
- Invest the time to proactively review, update, and organize data records and marketing content on a regular basis. Outsource this task if you don’t have in-house capabilities.
- Adopt intuitive, automated tech tools to simplify the process of organizing, maintaining, and sharing up-to-date, accurate content and to help streamline the pitch process.
We’ve reviewed two of the major challenges impacting business development and marketing efforts at law firms—but we’ve just scratched the surface. Consider these additional challenges that may influence your firm’s business development strategy heading into 2024:
Ongoing modernization of the business of law — Is your practice keeping up with the industry
Overwhelming choice of business development tools and applications (e.g., CRM, proposal management, email marketing) — How do you select the right technology for your firm?
Inefficient workflows — Are manual practices, data silos, and disconnected stakeholders impacting your firm’s productivity? Have you considered how to leverage AI-powered technologies to drive efficiencies across the practice?
For an exploration of these business development challenges and solutions, check out our new resource, Rethinking Business Development & Marketing for Law Firms: A Guide to Navigating 2024. This guide provides a framework to help you adapt your business development strategy and tactics to respond to the changing environment, enabling your firm to build a sustainable revenue stream.