Law Firm 101 Legal Marketing Association Capital Chapter

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 Economics 101

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 3

What Affects Budgets? Less work Higher expenses Lower rates Write offs Lower realization (roughly, the percentage of money collected vs. fees billed) Unforeseen capital expenses 4

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 5

Determining Partner Pay Originations Billing/matter responsible Hours billed Realization Firm administration/management Seniority Cross-selling and/or Good citizen Business development activity Non-billable time 6

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” 7

Where Marketing Fits Firm Operations / Administration – Finance – Human Resources – IT – Professional Development – Marketing and Business Development – Office Services 8

Why Marketing Is Highly Regarded Can help bring in business Highly visible Helps partners 9

Typical Marketing Department Structure 10

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 11

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 Place it (PR) Update bio to highlight relevant experience (MarTech) Send client alert or list (BizDev and MarTech) Turn your article outline into a Webinar or pitch as conference topic (BizDev and Events) 12

Pick Your Focus BizDev, MarTech, PR, Events Be great at it Incorporate other framework activities Become indispensable 13