It is important to analyze current marketing costs to determine the level of future activities. In a well-known case history, one group of attorneys analyzed their budget and determined they were already spending 14 percent of gross fees in marketing. They therefore felt they were making adequate efforts. In reality, their budget was very misleading because it included everything from birthday parties for the staff to subscriptions for magazines in the waiting room.
Attorneys may choose to put all these things in the "marketing" budget, but what is actually represented should be understood. Here are recommendations of what should and what should not be included in business development budgets.
WHAT BUDGETS SHOULD INCLUDE
ATTORNEY, PROFESSIONAL, AND SUPPORT STAFF COSTS
Non-administrative, non-billable time for activities devoted to the broad range of business development activities as discussed in this article series. This includes attorney time for speeches or article writing to client or potential client and referral audiences, including other attorneys.
Other costs are time devoted to the following:
- Development of internal consensus and preparation of marketing plans
- Client surveys and new market research
- Certain types of pro bono work
- Membership activities during business hours
OVERHEAD COSTS, ADMINISTRATION
- Business development salaries and expenses
- Business development overhead portion (rent)
- Travel and entertainment expenses on behalf of clients
- Storage costs of business development materials (brochures, etc.)
- Internal newsletters and other employee information costs
- Employee relations costs, such as parties, gifts, bonuses related to building morale, and increasing productivity
- Cost of attorney and administrative time devoted to employee training and communication
DEPARTMENT HARD COSTS
- Capital expenses used exclusively for business development (computer software, dedicated mail list management, etc.)
- Depreciation of equipment devoted solely to business development
PRACTICE DEVELOPMENT ACTIVITIES
- Cost of seminars, including related printed materials, meals, room, and equipment rentals
- Cost of attorney-sponsored socials, such as client lunches, open houses, holiday parties, and so on
- The portion of the cost of attorney retreats that is devoted to business development
PRACTICE DEVELOPMENT MATERIALS
Direct mail to clients, including newsletters, fact sheets, updates, briefs, holiday greeting cards, announcements, invitations, notes and all non-case specific and non-billable correspondence, and postage/ handling related to same
Gifts to clients
Subscriptions to periodicals and magazines used for client/market research or for general business development purposes, that is, client- centered publications (trade magazines), general business publications (The Wall Street Journal? Business Week, etc.), and general media (local newspapers).
Cost of design and printing of brochures and other materials developed to provide information to clients at no charge, such as firm information sheets, recruiting brochures, fact sheets, attorney biographies, practice group descriptions, and so on Cost of reprints of any article or speech for use for non-law audiences outside services purchased to support the marketing effort Fees and expenses paid to outside consultants for services such as strategy development, sales training, public relations, advertising, and graphic design
Media space and time costs for all product and service advertising including "tombstone" advertising. Yellow Page listings and advertising. "Image" advertising in programs, directories, and yearbooks Client research, market research
- Cost of design of letterhead, business cards (but not including cost of printing)
- Media clipping services
Frequently, many items get placed into marketing budgets that do not belong there. An attorney or firm may elect to call these items marketing expenses, but it should be clearly understood by all that they can artificially inflate the budget.
BUDGETS SHOULD NOT INCLUDE
- Subscriptions to practice-centered media such as bar journals, National Law Journal, American Lawyer, Law Practice Management
- Noncapital expenses, office supplies
- Capital expenses of computers, printers, software used by business development staff but also by others for general purposes
- Cost of printing letterhead, business cards, and so on
- Office artwork and signage (interior and exterior)
