Most Canadian law firms have a clear idea about how they want to differentiate themselves from their competitors, a new Best Law Firms survey shows. The problem is that many lack a plan to get their messages to clients or to measure the effectiveness of their outreach.
New data from Best Law Firms finds that just 41% of firms in Canada have the systems and technology in place to measure the return on their marketing investment. And among firms with fewer than 20 lawyers—in other words, the vast majority of the nation’s law firms—two-thirds are operating without a documented marketing or business development strategy.
Best Law Firms surveys Canadian firms to supplement its annual research and ranking process. Some 344 firms, ranging in size from solo practices to large national and global firms, took part this year. Those firms employ nearly 15,000 lawyers, or more than 10% of the active attorneys in Canada.
As part of the survey, Best Law Firms asked firms to report on how they are positioning their firms versus competitors, the marketing methods they prefer, their spending on marketing and what they are doing to measure the return on their marketing investment.
Differentiating Themselves
Overall, 88% of Canadian firms said they are differentiating themselves from competitors by emphasizing their deep specialization in specific industries or practice areas. In addition, 80% said they are highlighting their ability to maintain a strong focus on client feedback and service improvement. And 66% hope to stand out from their peers through industry awards and rankings.
Larger firms—for the purposes of the survey, those with more than 100 lawyers—are far more likely than small firms (fewer than 20 lawyers) and midsize firms (20-100 lawyers) to tout their technology, billing flexibility, or commitment to diversity. Sixty-five percent of large firms said they are communicating about their investments in efficiency-enhancing technology, compared to 43% of midsize and 31% of small firms.
Six in 10 large firms are also stressing their use of alternative fee arrangements, and the same number is calling attention to diversity, equity and inclusion initiatives. Just a quarter of midsize firms and one-third of small firms are underscoring their alternative fees; 23% of small firms and 38% of midsize firms emphasize their DEI programs.
Client Feedback
The fact that 8 out of 10 firms said they are differentiating their practices by focusing on client feedback and service improvement might lead one to believe that firms are regularly reaching out to gauge clients’ happiness with their work. But the survey shows that nearly 60% of firms do not ask their clients for formal feedback, nor do they survey them about their levels of satisfaction. Only 16% regularly ask clients about their performance, and 25% said they occasionally do, usually after major matters are completed. Thirty percent said they do not seek feedback, but plan to in the future. Nearly the same amount, 29%, don’t seek feedback and said they don’t plan to do so.
Large firms seek client feedback more often than their counterparts—though only 29% said they have a regular, formal feedback process and 7% have an occasional one. Among the large firms that are not currently seeking feedback, all said they plan to do so.
Small firms are the least likely to pursue client feedback—and the most adamant about not wanting it, the survey found. Nearly 60% avoided querying clients about their satisfaction. Of those, more than one-third said they don’t plan to do so in the future.
A formal feedback loop may help firms improve client satisfaction and attract new business. Firms said 62% of their new work during the past year came as the result of client renewals or referrals. The firms garnering the most feedback are also the ones whose clients return to them most often. Fifty-seven percent of the large firms said their new work came from clients. Just a quarter of midsize and small firms said the same.
Most Effective Messages
How effective has firms’ messaging been in attracting or retaining clients? For 60% of the firms surveyed, delivering superior client service has been the most important factor in client retention and acquisition.
While industry specialization is a key differentiating factor for firms, only 28% said it was their most effective client retention and acquisition strategy. Less than 5% of respondents said technology, pricing flexibility, or other strategies were the most critical methods for attracting clients.
To offer a window into the ways firms are pitching clients, Best Law Firms also asked firms about the language they use to describe themselves to potential clients. Those answers show that firms primarily focus on the way they deliver services rather than the legal work they do or the value proposition they may offer.
Firms most often used keywords and phrases like “innovative,” “efficient,” and “client-focused,” “responsive,” “timely,” and “practical advice” to describe themselves. Meanwhile, pricing and fee transparency-related language—“cost-effective,” “fixed/flat/alternative fees,” “predictable/transparent fees”—was rare.
What Firms Are Spending
Getting their messages out requires a substantial investment. According to the survey, 55% of Canadian firms spend 1% to 5% of their annual revenue on marketing. One-third of firms devote less than 1% of revenue, and just 1 in 10 allocate 6% to 10% of revenue for marketing efforts.
More than two-thirds of large and midsize firms said they are dedicating 1% to 5% of revenues to marketing. Less than half of small firms are doing the same.
Small firms were also far less likely to have increased their marketing budgets this year. Forty-two percent of firms with fewer than 20 lawyers said budgets had increased. That compares to three-quarters of firms with 100 or more lawyers, and more than half of firms with 20-100 lawyers.
The good news for marketers? Only 3% of firms surveyed said they had cut their spending. The rest held budgets steady.
ROI Issues
While spending rose—or at least held its own—at nearly every firm surveyed, many of the respondents lack the means to determine whether their marketing investments are paying off. Because less than half the firms surveyed have systems and technology in place to measure marketing returns, they may not be focusing on the most effective messaging or marketing channels.
The issue is less pronounced at large national and global firms, which have significant marketing and business development teams. Indeed, 78% of the large firms surveyed said they have the systems and technology to measure ROI. The number plunges to 50% at midsize firms, and 34% at small firms.
Small firms face another complication. Sixty-four% do not have a documented marketing and business development strategy. Of those, 26% said they are in the process of creating one. Another 7% acknowledge they need one. That leaves 31% that said they don’t have a plan—and don’t anticipate having one.
Without a marketing or business development strategy, firms may be sabotaging their efforts to attract viable prospects and retain existing clients. Having a clear plan and a way to measure results is critical to attracting the kinds of clients firms say they want.
As for the mix of clients firms hope to attract, corporate and business prospects are the key targets for 42% of the firms surveyed; 24% are looking for general consumer clients; and 25% are seeking an equal mix of businesses and consumers. The remaining 9% are looking for other types of clients—such as government agencies.
How Firms Are Marketing
The most common way Canadian firms are attempting to reach their targets is word-of-mouth. Ninety percent of large firms, 96% of midsize firms and 92% of small firms said they relied on positive buzz among their clients as a key weapon in the marketing arsenal. Word-of-mouth efforts are popular for a simple reason: They work, firms said. Fifty-three percent said word-of-mouth marketing was their most effective client-generating strategy.
Eighty-six percent of firms also said their websites were one of their top marketing channels. Larger and small firms ranked websites as their second most-used type of marketing behind word-of-mouth efforts. Midsize firms put websites first.
Two other marketing channels—events/speaking engagements and social media—are also being used by more than 70% of firms. Just under half of firms rely on blogs and search engine optimization (SEO). And print is not dead yet. Some 36% of firms said print advertisements were among their most-used marketing methods.
While technology is clearly important, few firms described a single digital strategy—such as websites or social media—as the linchpin of their client acquisition efforts. Live events and speaking engagements were just as impactful as tech-based strategies, firms said. And large and midsize firms were also more likely than small firms to deploy paid options, such as print ads and search engine advertising.
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David L. Brown is a legal affairs writer and consultant, who has served as head of editorial at ALM Media, editor-in-chief of The National Law Journal and Legal Times, and executive editor of The American Lawyer. He consults on thought leadership strategy and creates in-depth content for legal industry clients and works closely with Best Law Firms as senior content consultant.
