In the jargon-fueled world of legal marketing, “ROI” refers to the ratio of what you put in versus what you get out.
Even critics accept that legal directories have some value, but is that value consistent with the amount of time and money that goes into them?
Could you be doing something more productive?
In harsher terms, are they a waste of time?
I like to think that I have answers to most directories-related questions, but when asked about the ROI on directories, I am often stumped.
Over the years I have done all sorts of studies and number crunching of my own, but confess I don’t have any statistics at my fingertips.
I hear stories all the time of clients that use directories, and lawyers who have gotten work though directory referrals and recommendations, so I know they have some value, but I can’t give you any hard figures – just a bunch of anecdotes and hunches.
Two industry groups that represent the legal marketing industry – the Legal Marketing Association and Law Firm Media Professionals – have tried to attack the directories ROI issue with data.
To do so, they brought in research organization, BTI Consulting, which conducted a survey into directories, and the results were presented at the LMA annual conference in Austin (conference hotel, pictured) on April 13 2016.
To be fair to the presenters, they made it clear at the outset of their talk that they were merely presenting the results of the survey in a neutral fashion, and not taking a position.
However, the speakers at the LMA event pretty much concluded that it’s impossible to determine the ROI on directories.
Some interesting numbers emerged from the session, although bear in mind these are averages across all firms.
The figures for large firms would be significantly higher in many cases.
- 80% of law firms plan to maintain or increase the number of submissions they produce in the next year
- On average, firms prepare 58 submissions a year
- 18% of law firms have dedicated staff for submissions
- The average cost to develop a submission is $2,550 (figures of $6,000-$8,000 were mentioned for larger firms)
- On average, firms spend $157,000 to develop submissions (some larger firms spend more than $5 million to manage their annual directories programs)
- Chambers submissions cost the most to produce among a range of publications (unsurprising, since Chambers submission are often treated as the baseline for other entries)
Questions around cost were hazy.
On the original survey, respondents were asked to estimate how much they think in costs (in dollars) to produce a submission.
No standardized way to do this was put forward, so we can assume that firms figured something out for themselves or took a guess.
In Austin I don’t think it was clear to the audience that the costs referred to notional costs, not actual costs.
Bear in mind that it is free for law firms to participate in the research process for directories like Chambers and Legal 500, but the costs arise from the considerable staff and lawyer time taken to produce the materials and engage in the process.
There is, of course, a commercial dimension to the directories – they are not charities – but the advertising costs (the direct costs) for most firms are a small percentage of the overall (indirect) cost.
At the Austin session, someone mentioned the oft-repeated quote from GE boss Jack Welch that if it can’t be measured, it can’t be managed.
Well, we can measure some aspects of legal directories.
I know roughly how long it takes to prepare a submission, and how long each aspect of the directory process takes.
I can attach a time and cost to that.
What we don’t know is exactly what we get back in return.
Some firms have “directory referral” listed as an option on their matter intake systems, and from time to time I see reports that show matters that have come in to firms via directory recommendations.
That’s a fairly small number, though, because what we don’t also see are those matters in which directories played a part but were perhaps not the primary or decisive factor.
Evidence suggests that directories are often used as a secondary selection tool – for example: to generate a shortlist, to narrow down a long list to a shortlist, to validate an existing selection, to reassure a previous choice, or to act as a “tie breaker” in the event that it’s hard to differentiate between two competing firms.
Such client usage wouldn’t necessarily show up in a tracking report, hence the difficulty in establishing ROI.
During the final discussion in Austin, the audience were encouraged to challenge the directories and make them more accountable and transparent.
I agree to some extent.
Directories sometimes do things which add to law firms’ workload, and firms need to push back on aspects of the process which make the effort even more time consuming.
As an example, I’m currently working on a submission which has been converted by the publisher from an easy-to-use Word document to a clunky spreadsheet, adding a considerable amount of time.
But ultimately the market will determine the success and shape of the legal directory industry, and which products survive and thrive – not regulatory intervention.
A theme that emerged from the session was a recognition that while directories are unlikely to ever be legal marketers’ favorite pastime, they are here to stay.
The bitching of earlier years has given way to a more pragmatic realization that it’s better to focus on efficient management rather than wishful thinking that directories will disappear.
A further good suggestion was to have a frank conversion with your attorneys when deciding whether to plow on with a new submission: