Adapt to the Business Development Shift or Get Left Behind
Can you feel the shift occurring in commercial law today? Driven by changing trends across multiple fronts — both internally and externally — law firms of all sizes are actively reassessing their business strategies. Among this reassessment is a transformation in the area of business development — one that includes the hiring more full-time equivalents (FTEs).
According to a joint research study conducted by Bloomberg Law and LMA (Legal Marketing Association), more than two-thirds of law firms are increasing their emphasis on business development efforts. In the past two years alone, firms of 100-plus attorneys have increased their focus on business development, while firms of 500-plus attorneys have done the same with marketing and practice/process improvement. In that same span of time, 58 percent of firms have increased their budget expenditure on business development and marketing.
In the past two years, law firms have shifted resources to increase FTEs across such areas as business development, marketing, practice/process improvement, pricing and competitive intelligence. It is a trend that — as can be expected — increases as the size of the firm increases.
For firms with more than 500 attorneys, the average number of FTEs supporting business development and marketing is just over 10, with nearly seven supporting practice/process improvement and knowledge management.
The averages are still relatively strong as you move to firms with between 200–499 attorneys, with nearly six supporting business development and just over that number supporting marketing, roughly four supporting practice/process improvement, and three in the area of competitive intelligence.
This increased hiring of FTEs is one of the most prominent new business development initiatives that law firms have implemented in the past two years. Why? In short, the market has shifted. Internal pressure to generate revenue is the top motivating factor, followed by the fact that corporate counsel is reducing the number of firms with which they opt to work.
In recent years, there have certainly been macro trends in technology, recent economic difficulties and changes in client behavior; those who don’t adapt are left behind.
The motivators for increased focus on business development are plentiful, as is evidence of its growth, particularly in larger firms. But what does the future hold?
In the next two years, the trend of relying on FTEs is predicted to increase: Survey results indicate that roughly 56 percent of firms will increase their marketing/business development budgets. At the largest firms, support in the next two years is expected to stay the same for most roles, with the exception being for business development FTEs.