Big Data? How About No Data?
There’s a joke that 50 percent of marketing is effective, we just don’t know which 50 percent. The joke is even more exaggerated at large law firms, which tend to overlook marketing and business-development metrics.
Only 29 percent of large law firms engage in deep data analytics, according to a survey presented at the Marketing Partner Forum staged recently in Southern California by Silvia Coulter of LawVision Group and Steven Petrie of Faegre Baker Daniels. Data analytics, simply put, entails measuring the results of every action a law firm takes to guide decisions in the future.
The survey tells us that although all firms measure some things — profits per partner or revenues, for example — they lack systems to take a hard look at the big picture. Here are examples of potentially valuable data that law firms are ignoring.
• The cost of a seminar in terms of work hours plus actual dollars spent against the resulting growth of business in that market.
• The cost of creating a white paper against the size of its readership, quality of the identified readers and any subsequent follow-up with readers flagged as high-value targets.
• The cost of a new website against profile views, bounce rate (how quickly a visitor leaves the page), conversion and content. Does the firm track where the visitors come from? The first pages they view? Where they go next?
• How large is the firm’s spend on business -development lunches each year? How does it measure the effectiveness of the lunches and the relationships built?
What gets measured gets managed. How can we manage anything if we aren’t measuring?
Some of the most successful chief marketing officers in the legal industry come from the accounting industry, because they know how to follow the data trail. It is simple — yet why can’t law firms pause, take a deep breath and get their analytics together?
The answer is simple. Most nonlegal businesses are addicted to data analytics because they know their survival depends on it. Lawyers track billable hours as though their lives were at stake but view everything else as secondary. The result is that major law firms leave management of a major business responsibility to busy partners who don’t understand the value of data analytics and treat it as a hobby to look at as time allows. This needs to be flipped.
Some law firms solve this problem by bringing in a full-time chief executive officer who doesn’t practice law; others hire chief financial or operating officers to analyze these data. Most firms aren’t there yet.
That’s no way to run a business. But like Richard Susskind says, it’s tough to walk into a room full of millionaires and tell them they are doing it wrong.