Marketing Among Small Law Firms ©2007, Harris Interactive Inc All rights reserved May 2008 www.harrisinteractive.com Table of Contents Objectives and Methodology Executive Summary Key Findings Marketing Responsibility 10 Marketing Spend 13 Time Spent on Firm Marketing 24 Utilization of Marketing Tactics 27 Significance of Internet Marketing 35 ©2007, Harris Interactive Inc Detailed Methodology and Demographics 41 HARRIS INTERACTIVE Objectives and Methodology  In conducting this research, LexisNexis seeks to understand the marketing that small law firms undertake  This study is a duplicate of a previous study conducted by Harris Interactive in 2005 for comparative purposes  Harris Interactive conducted an online study among employees of small law firms (defined as having 20 or fewer attorneys) between August 30 and September 27, 2007 – Twenty-eight respondents who are employed by firms with 21-50 attorneys were removed for analytic purposes  All qualified respondents were either solely or partially responsible for the decision-making process of marketing their firms  Sample of current subscribers, past subscribers and non-subscribers was provided by LexisNexis  A total of 908 interviews were completed  The survey was approximately 15 minutes in length ©2007, Harris Interactive Inc  Percentages may not add to 100% due to rounding, or because “don’t know/not sure” responses are not shown HARRIS INTERACTIVE ©2007, Harris Interactive Inc Executive Summary HARRIS INTERACTIVE Executive Summary Responsibility for Marketing the Firm  Partners continue to have primary responsibility for planning and executing marketing plans  More office managers and assistants are taking an active role in marketing decisions  In 9% of firms, outside sources (marketing consultant, marketing service provider, outside agency) have primary marketing responsibility, unchanged from 2005  Solo practitioners have increased the use of outside consultants by 29% and staff members other than a partner by 60% from 2005  Mid-size firms (2-5 attorneys) increased their reliance on other staff members by 17% from 2005 ©2007, Harris Interactive Inc  Larger firms (6+ attorneys) tend to rely less on a marketing consultant and more on other staff members, including marketing managers, in 2007 than they did in 2005 HARRIS INTERACTIVE Executive Summary (cont.) Marketing Spend  Percentage revenue allocated to marketing activities has increased slightly over the past two years Overall, firms are spending at a consistent dollar level between 2005 and 2007 Solo practitioners: – Increased their spending of 5% or more of revenue from 2005 (39% vs 26%), and more than tripled their spending of 5% or more from 2002 (39% vs 12%) – Are spending at a consistent dollar level as compared to 2005 2-5 attorney firms: – More than doubled in their spending of 5% or more of revenue over the past five years (27% vs 12%) – Decreased their spending of over $10K (30% vs 33%) since 2005 11-20 attorney firms: – Followed the same pattern in allocating revenue to marketing activities in 2007 as in 2005 – Increased their spending of over $50K (19% vs 13%) since 2005 HARRIS INTERACTIVE ©2007, Harris Interactive Inc 6-10 attorney firms: – Slightly increased their spending of 5% or more (14% vs 12%) from 2005 and more than doubled from 2002 (14% vs 6%) – Decreased their spending of over $10K (39% vs 46%) since 2005 Executive Summary (cont.) Time Spent on Firm Marketing  There have been no significant changes in 2007, as practicing law remains the primary activity of the firm, while marketing remains an important “non-law” activity  Firms with fewer than 10 attorneys report no change from 2005 as to how much time they spend on marketing activities  Firms with 11-20 attorneys report a slight decrease from 2005 in the percentage of time they spend per week on marketing This may be due to assigning these duties to others within the firm, thereby freeing up their time to focus on practicing law Utilization of Marketing Tactics While firms still utilize proven marketing tactics such as yellow pages, legal listings, and client entertainment, they are increasing the use of firm Web sites and are embracing emerging technologies, such as blogs and paid placements on search engines to grow their practice  The size of the firm determines to what degree various marketing tactics are utilized Smaller firms are most likely to use yellow pages and legal listings, whereas larger firms utilize client entertainment to a greater extent However, while client entertainment is still the leading choice among firms with 11-20 attorneys, it shows a significant drop from 2005 (23% vs 32%)  The perceived value of Web sites as the highest valued marketing tactic, regardless of firm size, has not changed over time HARRIS INTERACTIVE ©2007, Harris Interactive Inc  Executive Summary (cont.) Significance of Internet Marketing  Law firms continue to use the Internet to promote their practice, and are using the latest techniques to attract potential clients  Search engine optimization has increased from 2005 (55% vs 50%), and slightly more firms in 2007 use online legal sites to attract clients (14% vs 12%)  Four times as many firms report the use of blogs in 2007 as compared to 2005 (8% vs 2%), indicating the desire to explore new methods in addition to traditional tactics to attract potential clients Perceived Value of Marketing Tactics Networking and word-of-mouth continue to be integral to building a law practice; however, online activities are also prevalent in integrated marketing campaigns  Web sites are still considered a primary marketing tool for growing a firm’s practice, and more money is allocated towards this tactic than in 2005  Blogs are beginning to demonstrate value in attracting clients; however, it should be noted that very little revenue is allocated towards this activity (1%)  While face-to-face interaction with potential clients is still important, client entertainment is decreasing in its value to attract potential clients, and less money is being allocated towards it from 2005 ©2007, Harris Interactive Inc  HARRIS INTERACTIVE ©2007, Harris Interactive Inc Key Findings HARRIS INTERACTIVE 9 ©2007, Harris Interactive Inc Marketing Responsibility HARRIS INTERACTIVE Current % Spending On Marketing Tactics Among Firms with 2-5 Attorneys  Yellow pages, legal directory listings, firm Web sites, and client entertainment are still important tactics among firms with 2-5 attorneys – Spending on firm Web sites is up 64% (18% vs 11%) from 2005  Spending on yellow pages listings, legal directory listings, and client entertainment decreased from 2005 to 2007, while spending on firm Web sites has increased Yellow pages Legal directory listings HARRIS INTERACTIVE Firm Event Client Web sites entertainment sponsorships Giving/ hosting seminars PR/ writing articles Referral services Pay-per-click Local Sponsorships placements outdoor ads on legal Web sites Blogs ©2007, Harris Interactive Inc Current % Spending on Marketing Tactics Among Firms with 2-5 Attorneys Current % Spending On Marketing Tactics Among Firms with 6-10 Attorneys  Client entertainment, yellow pages, legal directory listings, and firm Web sites are still the preferred marketing tactics among firms with 6-10 attorneys  There is less spending on client entertainment in 2007 than in 2005, although spending on yellow pages and legal directory listings has risen slightly  Spending on firm Web sites remains unchanged from 2005 Client Yellow entertainment pages HARRIS INTERACTIVE Legal directory listings Firm Web sites Event sponsorships Giving/ hosting seminars PR/ writing articles Referral services Local Pay-per-click Sponsorships outdoor ads placements on legal Web sites Blogs ©2007, Harris Interactive Inc Current % Spending on Marketing Tactics Among Firms with 6-10 Attorneys  Client entertainment, firm Web sites, event sponsorship, legal listings, and yellow pages are still important marketing tactics to larger firms  Spending on client entertainment has decreased by 28% (23% vs 32%) since 2005  Spending on firm Web sites, event sponsorships, legal directory listings, and yellow pages has risen since 2005 Current % Spending on Marketing Tactics Among Firms with 11-20 Attorneys Client entertainment Firm Web sites HARRIS INTERACTIVE Event Legal sponsorships directory listings Yellow pages Giving/ hosting seminars PR/ Referral writing articles services Pay-per-click Local Sponsorships placements outdoor ads on legal Web sites Blogs ©2007, Harris Interactive Inc Current % Spending On Marketing Tactics Among Firms with 11-20 Attorneys Perceived Value of Marketing Tactics  Networking and word-of-mouth tactics are still integral to building a law practice; however, online activities are also prevalent in integrated marketing campaigns  The perceived value of Web sites as a primary marketing tool for growing a practice, regardless of firm size, has remained consistent over time  Most other marketing tactics have slightly lesser perceived value than in 2005 % Respondents that Indicated Tactic as Valuable* 2007 2005 Law firm Web sites Printed/online legal directory/listings Public/media relations/writing articles Giving/hosting seminars Client meals/entertainment Event sponsorships/community events Print/online yellow pages Referral services Pay-per-click placements on search engines Writing/hosting a blog N/A Local outdoor advertising ©2007, Harris Interactive Inc Sponsorship/placement on legal Web sites *Top box score (Very Valuable, Valuable, Somewhat Valuable) HARRIS INTERACTIVE ©2007, Harris Interactive Inc Significance of Internet Marketing HARRIS INTERACTIVE Internet Marketing Among Total Firms  Law firms continue to use the Internet to promote their practice and are using the latest techniques to attract potential clients  Search engine optimization has increased 10% from 2005 (55% vs 50%), and slightly more firms in 2007 use online advertising to attract clients, up 17% (14% vs 12%)  Four times as many firms report the use of blogs (8% vs 2%) to attract potential clients, up 30% from 2005 2007 22% of firms not have a Web site Base: Have firm Web site (n=690) ► 55% use search engine optimization 78% of firms have a Web site ► 24% use paid placement on search engines ► 14% use online advertising ► 8% use blogs 20% of firms not have a Web site 80% of firms have a Web site Base: Have firm Web site (n=770) ► 50% use search engine optimization ► 24% use paid placement on search engines ► 12% use online advertising ► 2% use blogs HARRIS INTERACTIVE ©2007, Harris Interactive Inc 2005 Solo Practitioners  Search engine optimization has increased by 8% from 2005 (52% vs 48%)  Four times as many solo firms report the use of blogs (8% vs 2%) to attract potential clients 2007 Base: Have firm Web site (n=225) ► 52% use search engine optimization 32% of firms not have a Web site 68% of firms have a Web site ► 28% use paid placement on search engines ► 15% use online advertising ► 8% use blogs 2005 Base: Have firm Web site (n=229) ► 48% use search engine optimization 73% of firms have a Web site ► 28% use paid placement on search engines ► 14% use online advertising ► 2% use blogs HARRIS INTERACTIVE ©2007, Harris Interactive Inc 27% of firms not have a Web site Firms with 2-5 Attorneys  Search engine optimization has increased by 20% from 2005 (60% vs 50%)  More than four times as many 2-5 attorney firms report the use of blogs (9% vs 2%) to attract potential clients 2007 Base: Have firm Web site (n=304) ► 60% use search engine optimization 20% of firms not have a Web site 80% of firms have a Web site ► 25% use paid placement on search engines ► 15% use online advertising ► 9% use blogs 20% of firms not have a Web site 80% of firms have a Web site Base: Have firm Web site (n=372) ► 50% use search engine optimization ► 26% use paid placement on search engines ► 12% use online advertising ► 2% use blogs HARRIS INTERACTIVE ©2007, Harris Interactive Inc 2005 Firms with 6-10 Attorneys  Search engine optimization and the use of blogs have remained consistent with 2005 (50% and 3% respectively)  The use of paid placement on search engines and online advertising in 6-10 attorney firms have decreased slightly since 2005 2007 Base: Have firm Web site (n=105) ► 50% use search engine optimization 7% of firms not have a Web site 93% of firms have a Web site ► 17% use paid placement on search engines ► 10% use online advertising ► 3% use blogs 2005 Base: Have firm Web site (n=113) ► 50% use search engine optimization 88% of firms have a Web site ► 18% use paid placement on search engines ► 12% use online advertising ► 3% use blogs HARRIS INTERACTIVE ©2007, Harris Interactive Inc 12% of firms not have a Web site Firms with 11-20 Attorneys  Search engine optimization has declined by 9% from 2005 (50% vs 55%)  The use of blogs to attract potential clients in 11-20 attorney firms has increased by 40% since 2005 (7% vs 5%) 2007 Base: Have firm Web site (n=56) ► 50% use search engine optimization 2% of firms not have a Web site 98% of firms have a Web site ► 18% use paid placement on search engines ► 13% use online advertising ► 7% use blogs 2005 Base: Have firm Web site (n=56) ► 55% use search engine optimization 92% of firms have a Web site ► 11% use paid placement on search engines ► 4% use online advertising ► 5% use blogs HARRIS INTERACTIVE ©2007, Harris Interactive Inc 8% of firms not have a Web site ©2007, Harris Interactive Inc Detailed Methodology and Demographics HARRIS INTERACTIVE 41 Detailed Methodology A study of small law firms was conducted by Harris Interactive on behalf of LexisNexis A total of 908 interviews were conducted via an online survey between August 30 and September 27, 2007 among employees of small law firms (defined as having 20 or fewer attorneys) The length of the questionnaire was approximately 15 minutes SAMPLE SELECTION Sample of current subscribers, past subscribers and non-subscribers was provided by LexisNexis Qualified respondents for this study identified themselves as working as a solo practitioner or in a law firm with 20 or fewer attorneys and were either solely or partially responsible for the decision-making process of marketing their firm Question and response series Skip pattern Question rotation Range checks Mathematical checks Consistency checks Special edit procedures HARRIS INTERACTIVE ©2007, Harris Interactive Inc ONLINE INTERVIEWING PROCEDURES Interviews were conducted using a self-administered, online questionnaire, via proprietary, Web-assisted interviewing software The HPOL interviewing system permitted online data entry of interviews by the respondents Questionnaires were programmed into the system with the following checks: Detailed Methodology (cont.) ONLINE INTERVIEWING PROCEDURES (cont’d) To maintain the reliability and integrity in the sample, each invitation contained a password that was uniquely assigned to that e-mail address A respondent was required to enter the password at the beginning of the survey to gain access into the survey Password protection ensured that a respondent completed the survey only one time To increase the number of respondents in the survey and to improve overall response rates, up to two additional reminder invitations were typically mailed at 2-4 day intervals to those respondents who had not yet participated in the survey ©2007, Harris Interactive Inc All data were then tabulated, checked for internal consistency and processed by computer A series of computergenerated tables were produced for each of the key sample groups that showed the results of each survey question, both by the total number of respondents and by the key subgroups HARRIS INTERACTIVE Demographics of Respondents - 2007 Size of Firm Main Area of Practice 38% 43% 13% Only responses of 5% or more are shown 6% Age Region ©2007, Harris Interactive Inc Gender HARRIS INTERACTIVE Demographics of Respondents - 2005 Size of Firm Main Area of Practice Only responses of 5% or more are shown Age Region ©2007, Harris Interactive Inc Gender HARRIS INTERACTIVE