Marketers have long-understood the connection between brand strategy and an organization’s financial standing. Now with the release of the Acritas Global Elite Law Firm Brand Index, law firm marketers are equipped with the data to demonstrate how a firm’s brand can improve its bottom line.
The Acritas report, based on data from 1,600 senior executives from large global organizations with responsibility for buying legal services, found brand awareness and brand favorability can improve a law firm’s financial performance. Brand awareness was shown to correlate with an 81% increase in revenue growth and favorability linked to a 76% increase in profit growth. Given this, what strategies can firms employ to ensure that brand strategy augments financial performance?
Law firms often focus lawyers’ reputations as a key foundation for the firm’s brand strategy, and the Acritas report validates this approach. When a client identifies star lawyers at a particular law firm, that client tends to substantially increase its share of wallet with the law firm. For example, if a client can identify just one stand-out lawyer at the firm, the client, on average, doubled their share of wallet with the firm, according to the report. And client spend increased more as additional high-caliber attorneys were identified, with some firms’ share of wallet hitting two- to five-times as much as they had earned previously once a client nominated two and three stand-out lawyers, respectively.
If a client can identify just one stand-out lawyer at the firm, the client, on average, doubled their share of wallet with the firm, according to Acritas.
This clearly demonstrates that law firms should seek out ways to encourage high-performing lawyers to engage and build relationships with in-house clients, as these interactions may pay off substantially down the line.
But it may not be enough to focus only on the lawyers. Global and large national law firms have dedicated marketing and business development teams to promote individual lawyers and practice areas in order to build the firm’s profile. But these teams may need to go beyond showcasing attorneys’ bios to enhance the firm’s brand. Such a strategy should also aim to demonstrate to clients why choosing firms of their size is a sound business decision — not just a legal one.
As underscored by Acritas’s findings, one way for firms to do this is to promote their investment in innovation, technology, and business operations. Innovation — or the perception of innovation — can benefit a law firm’s financial standing through increased client advocacy and budget spend. In fact, according to the report, the advocacy rate among clients who perceive firms to be innovative is 66% versus a 36% advocacy rate for firms considered non-innovative. Additionally, clients commit an average of 30% of their legal spend to firms perceived to be innovative, a 10% improvement over firms not considered innovative.
On April 8-10, the Legal Marketing Association holds its annual conference in Atlanta, bringing together legal marketers to discuss and exchange ideas on building effective brands, increasing the attorneys’ profiles and demonstrating innovation to clients. While approaches may differ, we hope that data like this from Acritas helps inform conversations around what has proved to be effective.