New research amongst law firms and accountants with more than 15,000 employees reveals that marketing and business development budgets were cut to 2.6% of turnover in 2022 from 3.1% in 2020. For a typical professional services firm with a £20 million turnover, this equates to a £160K cut to each of their budgets this year alone.
The cuts in marketing budgets were at a time when most firms were growing again. In 2021 80% of participants saw an increase in turnover, 53% an increase in headcount and 75% an increase in technology expenditure.
While 84% of participants expect to continue to see turnover increase in 2022, only 65% expect their marketing budget to increase, and only 35% expect headcount growth in their marketing and business development (BD) team. Only 19% of firms expect to see an increased headcount in their marketing / BD team in 2022.
The average law firm now employs 2.9 people (4.2 2020) in marketing and business development, with accountants on average 1.2 people, but all respondents report increased dependence on outsourcing. 98% of firms outsourcing at least one area of marketing last year. 75% of firms outsource design, 69% outsource SEO, 61% outsource Public Relation, 50% of firms outsource digital marketing, 31% client feedback processes.
The research also highlighted how firms were very reliant on technology with 20% of marketing/BD spend on digital advertising, 19% on website, 15% on 3rd party consultancy, 13% BD, 11% sponsorships, 9% non-digital profile, 8% events and 3% CRM. Of these 68% expect to see an increase in events in 2022, 57% digital advertising, 45% in BD and CRM.
Clare Fanner, CEO, Law Firm Marketing Club, comments: “The research highlights some fundamental changes that have happened to law firms over the pandemic. My experience, and the research shows that partners have embraced technology and outsourcing as better ways to resolve their marketing and business development. I think the days of the ‘jack of all trades’ marketing department are over and we can expect to see far greater sophistication in law firms' marketing.”
Jonathan McGill Head of Marketing, Conscious Solutions, comments; “Questions arise from this research, primarily can marketers do more with less resources and are marketers setting unrealistic expectations both for themselves and the leadership teams? The data highlights the importance of digital with advertising and websites both receiving additional focus, interestingly 69% of participants are planning on outsourcing their SEO work.”