Transcript Law Firm 101 Legal Marketing Association Capital Chapter

Law Firm 101
Legal Marketing Association
Capital Chapter
Law Firm Economics 101
• Net revenue – Expenses = Profit
– Revenues = fees collected
– Expenses = rent, salaries, operating cost, etc.
• Partners paid a % of profit, not a salary
– Draw
– Bonus
• Everyone else paid salary
Example: Firm of 3 partners collects $1,000,000
and pays $400,000 in expenses
Partners make $200,000 each
Law Firm Budgets
• Law firm budgets are an art, not a science
– Take last year’s revenue and add x%
– Subtract expenses
– Estimate profit
– Divide profit by some number to determine draw
with bonus pool left over
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What Affects Budgets?
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Less work
Higher expenses
Lower rates
Write offs
Lower realization (roughly, the percentage of
money collected vs. fees billed)
• Unforeseen capital expenses
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Partner Pay Structures
• Equity v. Non-equity
• Types of Comp Plans
– Percentage
– Units of participation
– Percentages or units of participation with a
reserve
• Modifiers to comp plans
– Weighting
– Incentives
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Determining Partner Pay
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Originations
Billing/matter responsible
Hours billed
Realization
Firm administration/management
Seniority
Cross-selling and/or Good citizen
Business development activity
Non-billable time
Why Partners Care About Marketing
• Originations are clearest measure of criteria
considered in determining comp
• Business development activity often next
highest weighted criteria
• Small client may one day be big (want to
preserve or claim “credit”)
• Ego/competitiveness
• “I helped”
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Where Marketing Fits
• Firm Operations / Administration
– Finance
– Human Resources
– IT
– Professional Development
– Marketing and Business Development
– Office Services
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Why Marketing Is Highly Regarded
• Can help bring in business
• Highly visible
• Helps partners
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Typical Marketing Department Structure
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Marketing Framework
• Think of all marketing / business development
activities in terms of framework
– Most actions have related, overlapping activities
• No matter your focus, ask if other framework
activities can be done
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Framework Activities Example
• One action: Attorney says he/she wants to write an
article.
– Help place it
• Multiple actions: Attorney says he/she wants to write
an article.
– Apply framework
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Place it (PR)
Update bio to highlight relevant experience (MarTech)
Send client alert or email list (BizDev and MarTech)
Turn your article outline into a Webinar or pitch as conference
topic (BizDev and Events)
Pick Your Focus
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BizDev, MarTech, PR, Events
Be great at it
Incorporate other framework activities
Become indispensable