LAWYER MARKETING, THE SELLING OF BILLABLE HOURS

Law Firms are out marketing in a way that has never been seen before. This is good for competition, but also a trap for the unwary. Law firms have traditionally relied on word of mouth and good work to grow their firm. In recent years law firms have been under greater and greater pressure to increase business to keep each lawyer billing 2000 hours per year. Partner profit expectations have continued to grow and starting salaries have risen to where most larger firms pay over $80,000 [some over $100,000] for a first year associate plus fringe benefits. Today's law firms face competition not only from other firms but other sources as well, including contract and temporary attorneys, legal research companies, arbitration and mediation firms, paralegals, and other non-lawyers and off-the-shelf legal software. There is also third party encroachment as from the accounting firms which now account for $2 to $3 billion in a global legal market of about $70-$80 billion. The accountant market share is growing at a rate of $1 - $2 billion a year and will grow exponentially in the future, especially outside of the U.S. Corporate America is using a variety of cost cutting measures to defend itself against increasing legal budgets.

Many in-house counsel have reduced the number of law firms used. For instance, DuPont has gone from 430 law firms to 34; Prudential, from 1,000 to 82; Marriott, from 250 to 12; Aetna, from 125 to 28. In this volatile market, law firms are scrambling to replace business and to raise partner profits to retain partners who have been increasingly willing to move to another firm to enhance their earning ability.

It takes a savvy consumer to survive the law firm marketing blitz. Law firms have increased their supply of billable hours and now they must sell those hours to their clients. While the marketing level has increased, the amount of information available to the consuming public is probably less than ever because information overload confuses the issues. Companies are relying more than ever on their in-house counsel to sort out the market and to provide the best service available. BLG provides this guidance to the company that doesn't require a full-time counsel but still needs the benefit.

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