More Legal Marketing Misinformation
Those of you who know me, know that I am not a professional marketer. I really do not know how to be a good marketer. I was able to build a successful law practice. I did so by reading everything that I could about how to build and market a legal practice. Some marketing efforts were more successful than others. As I think back on these efforts, I can’t help but think about the misinformation that is published about marketing a legal practice.
I recently came across this “report” published by the American Lawyer Media – which is a company whose business it is selling advertising in its legal publications. As stated below, the conclusion of this “report” is that law firms that spend money on marketing earn more money as a result of their “marketing.”
Here are some of the problems that are inherent with this “report” and its “concrete” conclusions.
First, the sample population for the report is the American Lawyer Media’s AmLaw 200 survey. Ignoring the inherent bias of using a survey conducted by an organization that has a direct interest in the research’s outcome and then using that survey data to draw conclusions, the report incorporates the flaws of that underlying survey.
With just a cursory review, here are two big flaws of using this survey that come to my mind:
First, the survey only includes data for the 200 law firms that have the largest gross revenues. Even someone with a basic understanding of financial accounting understands that “gross revenues” really do not mean much for large firms, as these figures can be easily manipulated for financial reporting purposes.
Even then, basing the report’s “concrete conclusion” on the firms with the largest “gross revenues,” assumes that a law firm’s only reason for being is to generate revenue. I personally know of several large firms who have reached a point where earning money is important, but not everything. Those firms spend a lot more of their energies (and profits) on creating friendlier work environments and more sustainable revenues. Unfortunately those law firms would most likely not be the most profitable and they wouldn’t make the AmLaw 200 and they were not part of this "report" (but then again, they probably would not need to use advertising to generate good will as they probably did so in other ways, which I suppose an advertising organization would not want to discuss).
Second, another problem with using the AmLaw 200 survey is that the 200 largest “gross profits” firms do not represent the vast majority of law firms that are out there today. We all know that the vast majority of law firms have fewer than ten or twenty attorneys. The reality is that these large law firms probably do need to spend more on advertising, as they simply do not generate the good will or develop the relationships that smaller firms are able to develop with clients. Even then, the report pared these 200 firms down to 87 firms.
It doesn’t make much sense to use a survey of the largest 200 firms, reduce that down to a mere 87 law firms, and then draw “concrete conclusions” based on those 87 large profitable firms that apply to law firms in general. In research terms, the conclusions are simply “unreliable.”
Even when you look past the flaws of using the AmLaw 200 survey data, there are still other problems with the “report.” For example, the “report” divides law firms into two groups, those that advertise and those that do not advertise.
Advertise is defined as spending “at least $10,000 in any three years in the last five years.” I don’t know if these folks know what they are talking about, because you cannot even buy a few small basic ads in the American Lawyer Media’s own legal publications for $10,000!
Moreover, the “report” doesn’t even delineate what “advertising” these funds were spent on.
As a result, the “report’s” distinction between advertising law firms and non-advertising law firms is really a meaningless farce.
In addition there is a causality problem with the research in that, it assumes that increased profits in any of the three years results from the advertising. There is simply no support for that conclusion.
With these 87 firms the increased gross revenues could have resulted from any number of factors, such as the economies that these firms operate in improving, the firms developing new practice areas or ridding themselves of unprofitable practice areas, or even the firm cutting employee benefits. It could have been anything.
Maybe it was advertising. But realistically, because a firm with more than a couple of hundred lawyers spent over $50,000 – hell over $500,000 for that matter – on some undefined forms of “advertising” in a three year period probably had absolutely zero impact on the firm’s gross revenues.
Here is the "report’s" final "concrete" conclusion:
I suppose I can live with the "report" as is, because I understand that the American Lawyer Media has a vested interest in the report reaching the conclusion that it did. What I really take issue with is professionals who purport to help law firms market their services use "reports" like this to sell their services, instead of just providing good quality services.
Successfully marketing a law firm is difficult enough without this type of misinformation.
Hat tip: Larry Bodine’s Professional Services Marketing Blog
I recently came across this “report” published by the American Lawyer Media – which is a company whose business it is selling advertising in its legal publications. As stated below, the conclusion of this “report” is that law firms that spend money on marketing earn more money as a result of their “marketing.”
Here are some of the problems that are inherent with this “report” and its “concrete” conclusions.
First, the sample population for the report is the American Lawyer Media’s AmLaw 200 survey. Ignoring the inherent bias of using a survey conducted by an organization that has a direct interest in the research’s outcome and then using that survey data to draw conclusions, the report incorporates the flaws of that underlying survey.
With just a cursory review, here are two big flaws of using this survey that come to my mind:
First, the survey only includes data for the 200 law firms that have the largest gross revenues. Even someone with a basic understanding of financial accounting understands that “gross revenues” really do not mean much for large firms, as these figures can be easily manipulated for financial reporting purposes.
Even then, basing the report’s “concrete conclusion” on the firms with the largest “gross revenues,” assumes that a law firm’s only reason for being is to generate revenue. I personally know of several large firms who have reached a point where earning money is important, but not everything. Those firms spend a lot more of their energies (and profits) on creating friendlier work environments and more sustainable revenues. Unfortunately those law firms would most likely not be the most profitable and they wouldn’t make the AmLaw 200 and they were not part of this "report" (but then again, they probably would not need to use advertising to generate good will as they probably did so in other ways, which I suppose an advertising organization would not want to discuss).
Second, another problem with using the AmLaw 200 survey is that the 200 largest “gross profits” firms do not represent the vast majority of law firms that are out there today. We all know that the vast majority of law firms have fewer than ten or twenty attorneys. The reality is that these large law firms probably do need to spend more on advertising, as they simply do not generate the good will or develop the relationships that smaller firms are able to develop with clients. Even then, the report pared these 200 firms down to 87 firms.
It doesn’t make much sense to use a survey of the largest 200 firms, reduce that down to a mere 87 law firms, and then draw “concrete conclusions” based on those 87 large profitable firms that apply to law firms in general. In research terms, the conclusions are simply “unreliable.”
Even when you look past the flaws of using the AmLaw 200 survey data, there are still other problems with the “report.” For example, the “report” divides law firms into two groups, those that advertise and those that do not advertise.
Advertise is defined as spending “at least $10,000 in any three years in the last five years.” I don’t know if these folks know what they are talking about, because you cannot even buy a few small basic ads in the American Lawyer Media’s own legal publications for $10,000!
Moreover, the “report” doesn’t even delineate what “advertising” these funds were spent on.
As a result, the “report’s” distinction between advertising law firms and non-advertising law firms is really a meaningless farce.
In addition there is a causality problem with the research in that, it assumes that increased profits in any of the three years results from the advertising. There is simply no support for that conclusion.
With these 87 firms the increased gross revenues could have resulted from any number of factors, such as the economies that these firms operate in improving, the firms developing new practice areas or ridding themselves of unprofitable practice areas, or even the firm cutting employee benefits. It could have been anything.
Maybe it was advertising. But realistically, because a firm with more than a couple of hundred lawyers spent over $50,000 – hell over $500,000 for that matter – on some undefined forms of “advertising” in a three year period probably had absolutely zero impact on the firm’s gross revenues.
Here is the "report’s" final "concrete" conclusion:
Financially successful law firms are proven marketers, and the common trait that we see in the most successful is a commitment to advertising. Firms that advertise make more money than those that don’t.
I suppose I can live with the "report" as is, because I understand that the American Lawyer Media has a vested interest in the report reaching the conclusion that it did. What I really take issue with is professionals who purport to help law firms market their services use "reports" like this to sell their services, instead of just providing good quality services.
Successfully marketing a law firm is difficult enough without this type of misinformation.
Hat tip: Larry Bodine’s Professional Services Marketing Blog
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