Rethinking Budgets in a Post-COVID-19 Market
 

Rethinking Budgets in a Post-COVID-19 Market

By Nathan Smith
August 05, 2021 | 5 minutes
Marketing Management and Leadership Budgeting Content Type Article Content Level: Essential
Business of Law
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As we emerge from COVID-19 isolation, law firms are currently assessing how to budget and allocate time and resources toward marketing and business development (BD) activities in 2022. This past June, law firm leaders from the Southwest region of LMA converged for a panel discussion to examine strategies and philosophies for moving forward. This article is a summarization of that conversation.

On June 23, 2021, five legal professionals shared their thoughts on post-pandemic budgeting with moderator Eric Fletcher, principal of Eric Fletcher Consulting. The esteemed panel included Steve Boutwell, chief operating officer of Kean Miller, Dave Katalinas, partner at Moye White, Bill Bauer, director of finance at Thompson Coe, Jessica Jaramillo, director of marketing at Ireland Stapleton, and Ashraf Lakhani, chief marketing and business development officer at Porter Hedges.

During the spirited discussion, five central tenets became self-evident:

  1. Doing more with less is not sustainable.
  2. It is time to come out of isolation.
  3. Complacency is the kiss of death.
  4. Your actions now will dictate the next 12-18 months of performance.
  5. Do not be afraid of your firm’s finance department.

All five panelists acknowledged that marketing and BD spending at their firms was down significantly (over 50%) in 2020 compared to 2019. Moreover, budgets allocated for 2021, while available for use, were not being fully spent by the firms, with the lone exception being Kean Miller, who opened their offices in the summer of 2020. 

Regardless of whether budgeted funds were being spent, the panel enthusiastically agreed that now is the time to be marketing. Boutwell stated that he has become exhausted hearing the phrase, “But everything is closed. I’ll get out there when things start opening back up.” “It is open!” he exclaimed, referencing several socially distanced, in-person events he has attended this year. 

Katalinas referenced “client drift” and frequently reminds his attorneys that without meaningful contact, especially as we emerge from over a year of isolation, contacts and clients will start to drift away. When this occurs, those feeling neglected will be of a mindset that may avail themselves to a competitor.  

Lakhani also added a timetable to this theory of drift, stating that, “This summer (2021) is when you sharpen your marketing and BD skills, as your efforts now will chart the course for your success over the next 12-18 months.”

The pandemic should be seen as an aberration rather than a harbinger for a new era of marketing and BD budgeting.

Of course, some partners might say their firms did just fine in 2020 without the marketing spend, so why change things now? Bauer reminded attendees that most partners are compensated based on what is unspent at the end of the firm’s fiscal year. Of course, they appreciate the extra income, but that should not preclude marketing and BD spend.

While the consensus has been to return to pre-COVID-19 marketing budgets, the conversation turned to ROI and what makes for a smart budget, given the forced fiscal austerity. Jaramillo emphasized having a strategy behind budget requests. “The challenge in budgeting is to make sure that the spend is appropriate,” she stated. She also highlighted the sophistication of marketing departments at some plaintiff firms, where the focus is on determining ROI for their marketing activities.

The panel agreed that chasing ROI should not always be the end goal of marketers. Instead, Jaramillo and Boutwell both mentioned that relationships are sometimes more important to track — a return on relationships, if you will.

Bauer’s perspective from the accounting department echoed this line of thinking, but with a more nuanced caveat — that marketing budget requests need not be overly narrow in scope. In other words, if a high-dollar request is made for the benefit of a small audience, or even one client, he will push back with thoughtful questions by asking for the strategic thinking behind such a request. He also explained that although the finance department is saying no on a budget request, they should also be prepared to explain how to restructure the request to get to yes. He closed by encouraging all legal marketers to actively communicate with their firm’s finance department and not shy away from incorporating the big asks in their budget requests. 

Lakhani illuminated another important aspect of a return on investment by emphasizing that lawyers should be actively keeping in touch with their clients and contacts, while marketing and BD professionals should also be actively engaged with the lawyers at their firms. He called this philosophy a return on internal engagement.

From the practicing lawyer’s point of view, Katalinas reiterated that all BD and marketing spend should be tailored to an audience that might retain the firm. In other words, there is little value of a budget request aimed at raising awareness of the firm to people either outside of the target profile of the firm or to individuals that have little to no influence over legal hiring decisions.

Boutwell offered a prescient takeaway by tying the concept of budgeting to that of a 401k. The savvy investor does not stop contributing to their retirement account, just as smart and successful firms will continue to invest in their budgets to ensure security and growth. 

The panel agreed that now is not the time to pull back on budgeting. Instead, the pandemic should be seen as an aberration rather than a harbinger for a new era of marketing and BD budgeting. Furthermore, each of the panelists agreed the time to engage with renewed vigor in marketing and BD activities is not tomorrow or even next month — but now.

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Nathan Smith
Kean Miller

Nathan Smith is the business development manager for Kean Miller and is responsible for overseeing the marketing and BD functions of the firm’s expansion in Texas. Smith has been in the legal marketing field for 20 years, working with more than 50 law firms to create, implement and execute marketing, BD and PR programs, as both an in-house professional and an outside consultant. He is a published author appearing in industry-specific publications such as Marketing the Law Firm, International Legal Technology Association and Attorneyatwork.com. He is the member-at-large, programming, for the Legal Marketing Association’s (LMA) Houston Local Steering Committee and a committee member on LMA’s Strategies Editorial Board. Additionally, Smith is the recipient of multiple Addy awards for excellence in past marketing campaigns.