For Smaller Firms, Marketing Won't See Big Cuts in 2009

December 30, 2008

The Legal Intelligencer
Zack Needles

In a time of increasingly tight budgets, deciding where and by how much to cut costs can be difficult for a firm. What starts out as trimming the fat can quickly lead to amputating a vital business component.

The consensus among a number of firm leaders and legal experts is that there is one area that should absolutely not be stifled in the interest of saving money: marketing.

In fact, many believe firms should throw more resources into marketing during hard economic times because competition only becomes fiercer when there's less business to go around.

"The time to keep a low profile is not in the time when business is down; it's actually the exact opposite," said Lori Carpenter of Carpenter Legal Search.

She said there are many more superfluous expenses law firms should do away with before their marketing budgets are even considered for the chopping block.

Carpenter said many of her clients have recently been spending marketing dollars on redesigning their Web sites.

A number of firms across the state said their marketing methods lean more toward bonding than branding, but none said they expected to make huge cuts to their marketing budgets.

"We're not a firm that advertises in the traditional sense," said Matthew R. Sorrentino, managing partner and president of Tallman Hudders & Sorrentino in Allentown, Pa. "Most of our marketing is in the nature of public service things and contributions to social services and nonprofit agencies in our community. In fact, I think they need more than they ever have before. That we have not scaled back."

Sorrentino said the other major component of his firm's marketing, which centers around meeting with and entertaining clients and potential clients, will also be enhanced.

"I think we're going to make an effort to do that more than ever," he said.

Similarly, Mitchell S. Kaplan of Zarwin Baum DeVito Kaplan Schaer Toddy in Philadelphia said his firm markets itself through "personal contact" with clients and potential clients.

"We think it's important to reach out and speak to clients, whether that's through e-mail and telephone contact or by taking clients to lunch, taking them to ball games or doing seminars," he said.

And all of that, of course, costs money, one way or another.

"Even just spending the time and making an effort without actually expending dollars has its cost because attorneys are devoting time toward that endeavor," he said.

While Kaplan did not discount the importance of marketing, he emphasized smart spending.

He said his firm is open to taking a hard look at its existing marketing tools and cutting back funding for those that don't seem to be producing.

"I think in our review of things that need to be done, if we find that something has not been effective in the past or that we think is a bit excessive, we're certainly going to consider cutting certain expenses," he said. "You want to be smart about what you're doing and make sure you're effective and efficient. If that results in an outlay of fewer dollars — even better."

Kevin McKeegan, chairman of Meyer Unkovic & Scott in Pittsburgh, said his firm is analyzing its spending and could potentially scale back its marketing budget, albeit carefully.

"We are taking a very close look at all the items in our budget, including marketing," he said. "We don't believe that marketing is a line item that should be just taken an ax to. If cuts are necessary they need to be made with strategy and tactics in mind, not just because we have to reduce our spending by 10 percent."

McKeegan said his firm would likely "tighten up on miscellaneous marketing expenses" like $100 golf outings for clients or potential clients.

"They don't sound like much, but they do add up," he said.

McKeegan estimated that about two-thirds of his firm's marketing centers on "relationship building and strategic orientation."

For example, the firm sponsors entrepreneurial programs through the University of Pittsburgh, McKeegan said.

"They have real value and may even need to be increased," he said, adding that only about one quarter of the firm's marketing "could be defined as traditional advertising."

McKeegan said his firm most likely won't finalize its 2009 budget until the end of December or early January.

Similarly, Michael H. Syme, vice president of finance and treasurer of Cohen & Grigsby in Pittsburgh, said his firm has yet to determine its marketing budget for next year but that the firm is "open to making changes that are necessary, in either direction, up or down."

"Our goal is to continue what we have in the past," he said. "This firm has always offered our clients a very good value by saving costs on overhead and passing those savings onto our clients."

Carpenter had named Cohen & Grigsby as a firm that has "tried some interesting things" in terms of marketing in the past, including advertising on billboards, a medium perhaps more traditionally associated with plaintiffs firms.

"We did those a couple years ago," Syme acknowledged, but added, "I don't see us returning to the billboard."

On the other hand, he said, the firm, which recently moved to Pittsburgh's Cultural District, is currently partnered with the Pittsburgh Cultural Trust as the Presenting Partner for the 2008-2009 "Trust Presents" series, which brings entertainment to the Cultural District.

While Syme said the firm is not averse to adjusting its spending in any area, he also implied that massive budget cuts may not be necessary.

"We have not been as adversely affected by the downturn in the economy as many other firms have," he said.

Stephen A. Madva, chairman of Montgomery McCracken Walker & Rhoads in Philadelphia, said his firm will "absolutely not" cut back spending on marketing and, in fact, plans to put more money behind it.

"This is not the time, in my mind, to cut back on marketing," he said. "We don't know much, but we know that we have to stay top-of-mind with our clients and be out in the community and represent markets as much as possible."

Madva said firms looking to save money should cut back spending on overhead, not on "the means by which you generate income."

Madva also said marketing for his firm is defined by relationship building, not traditional advertising.

"I'm not convinced having your name on billboards and print media is especially valuable," he said, adding that his firm focuses on "outreach to clients" through avenues such as "surveys, seminars, newsletters [and] Web-based outreach."

Madva said he believes there are still business-enhancing opportunities for law firms even in this damaged economy and, though he's not sure exactly what they are, he's confident firms need to be aggressive in seeking them out.

"This is not the time to hunker down, it's time to get our visibility out there," he said.