The Static Dilemma: Maybe Struggling Law Firms Can’t Afford to Invest in Marketing, but They Have To

Topics: Business Development & Marketing Blog Posts, Client Relations, Efficiency, Law Firm Profitability, Law Firms, Leadership, Legal Innovation, Midsize Law Firms Blog Posts, Peer Monitor


“You can’t spend what you don’t have” — but “you have to spend money to make money.”

These two old clichés are undoubtedly at odds with one another, yet both are unquestionably true with regard to running a business. Indeed, it’s impossible to start and run a business without investing in that business; however, it’s also hard to find the money needed to run the business if you aren’t already having some success at building revenue.

Such is the conundrum faced by the Static law firms in our recently released Dynamic Law Firms Study. Across the board, the Static firms saw their ability to invest in their businesses curtailed. On a per lawyer basis, these firms contracted their spending in nearly every major category of expenses tracked by Peer Monitor, including occupancy, office, marketing and business development, and library expenses.

Some of these reductions are not surprising and are quite likely wise moves. Over the last several years, for example, we’ve seen a concerted effort across the legal industry to rein in occupancy and office expenses by shrinking office footprint, reducing and standardizing office size, relocating to less costly real estate, moving back-office services to less expensive geographies, and scaling back firm retreats. These are common and common-sense moves.

But the reductions in investment growth in technology and marketing on the part of Static law firms are a puzzlingly different issue.

For Static firms, their investment in technology grew by only 0.5% year-over-year in 2017 on a per-lawyer basis. In contrast, Dynamic law firms grew their per lawyer tech expenses by 2.9% during the same time period. Dynamic law firms also vastly outpaced Static firms in tech spending growth in the previous year. This places Static firms in real danger of falling far behind their competition in terms of the ready technology they have available to run their firms and serve their clients.


Technological advancement is not a linear curve. Firms can make leap-frog adjustments to catch up if not surpass the competition in relatively short time-frames with appropriate funding and attention. But the Static firms do not seem poised to make such a jump given the scarcity of investment.

Marketing and business development investment is a similar story in Static law firms, but perhaps an even more troubling one. In that category, Static firms’ investment on a per-lawyer basis actually contracted by 1.7% in 2017, compared to 3.4% growth for the Dynamic law firms. The result is a better than a five-percentage point growth advantage for Dynamic firms.

In a mature market where firms are competing to steal market share from one another, this places Static firms at a decided disadvantage in terms of fostering their brand and growing their market share.

And unlike tech where a large cash influx can help to quickly make up ground, it’s not quite so simple for marketing. I doubt you’ll find many legal marketers out there who would object to a big bump in their budgets; but those same people will likely tell you that it’s not a problem you can just throw money at. If a law firm’s brand is diluted from lack of attention and investment, it takes a large effort to put the brand back on the footing it once enjoyed, and even more work to put it in a position for expansion.

Without a doubt, cuts in spending are sometimes necessary. If a firm doesn’t have sufficient revenue, such cuts become inevitable. But if not carefully considered, such cuts actually have the potential to lead to even greater revenue troubles down the road.

For a more complete examination of the investment strategies of the Dynamic and Static law firms, as well as a broader discussion of what separates these two groups, you can download a copy of the Legal Executive Institute’s 2018 Dynamic Law Firms Study here.