Archive for October, 2012

Market Research Leads to Law Firm Marketing Plans That Work

Wednesday, October 31st, 2012

You can’t have one without the other:
Market research leads to strategic plans that work

By Janet Ellen Raasch

Janet Ellen Raasch is a writer/ghostwriter who works closely with lawyers and other professional services providers – helping them promote themselves as thought leaders within their target markets through publication of instructive article, books, white papers and content for the Internet. She can be reached at (303) 399-5041 or jeraasch@msn.com.

How is your law practice perceived by the consumers in your target market? Should you add a new practice group or a new office? How loyal are your existing clients?

When faced with questions like these, too many law firms continue to make decisions based on a subjective “gut reaction” or a “best guess.” Most businesses, by comparison, make their bet-the-company decisions based on objective, valid market research.

Market research is a systematic and scientific process for gathering, recording and analyzing outside information – information that should provide the basis for a law firm’s strategic plan and operational decision-making.

“There is no intrinsic value in market research for the sake of market research,” said Marci Dunning, president of Access/Information. “The value lies in what you do with the objective information you acquire; how you use it to make better decisions.”

An introduction to market research in the law firm environment was provided by a three-person panel that addressed the monthly meeting of the Rocky Mountain Chapter of the Legal Marketing Association, held Nov. 8 at the Denver Athletic Club.

In addition to Dunning, participants included Deirdre Martel, director of marketing research at Quality Education Data (www.qeddata.com) and Wanda McDavid, vice president for business development and network operations of Access/Information (www.access-information.com).

The advantages and techniques of both primary and secondary market research were discussed. Primary market research is original research; information is collected directly from a respondent. It can be either qualitative or quantitative, depending upon the needs of the law firm. Secondary market research, often called “desk research,” focuses on the collection and interpretation of research already conducted by others.

Most law firms will turn to an outside consultant for primary market research – someone who understands how to formulate the hypothesis and then create a qualitative or quantitative research design that will yield valid and reliable results about the hypothesis.

Primary research – qualitative

“Qualitative primary market research is exploratory in nature,” said Martel. “It can provide an understanding of how things are, or why they are a certain way. It is a valuable tool for pre-testing a hypothesis before you take action based on the hypothesis. It is less structured and, therefore, usually less expensive than quantitative research.

“For example, a law firm could use qualitative research to test the reaction of a sample of target clients to a proposed brochure,” said Martel. “Does the piece actually convey the message that the firm wants to convey? If not, it can be re-designed – saving the firm a lot of money on printing and mailing something that does not work.”

A law firm could also use qualitative research to discover why it did not get the expected response to a particular proposal or a presentation – and then use this information to refine its process the next time around. It could be used with a sample of mock jurors, to pre-test the effectiveness of courtroom arguments.

Qualitative research uses a variety of tools, including in-depth interviews and focus groups of various sizes. “In-person interviews and focus groups allow the researchers to supplement what a person says with observations of non-verbal behaviors,” said Martel. “They also allow the use of physical props like storyboards, prototypes or samples.

“An increasingly popular tool is a hand-held device that allows members of a group – say in a retreat or a conference setting – to push a button to indicate their reaction to an idea or a product,” said Martel. “This allows the collection of large amounts of data quickly, and can also be used to collect quantitative data.”

Qualitative research can also be conducted online. “With a properly designed tool, this is a good way to reach widely-dispersed populations,” said Martel. “It protects respondent identities and increases the participation of those with social inhibitions. Participation is usually higher, it is faster, no travel is involved and it may be less costly.”

Primary research – quantitative

Quantitative primary market research uses statistics to test hypotheses about the marketplace. Random samples of individuals in the target population are selected and surveyed – usually no fewer than 100 individuals and often more. Surveys must be properly designed with measurement in mind; they can be conducted in person or by mail, telephone, email or the Internet.

If the correct process is followed, the results of the survey will represent the attitudes or behaviors a much larger universe. “Quantitative research provides a ‘snapshot’ of the market at any given point in time,” said Martel. “It is more time-consuming and costs more money than most qualitative research, but the results are highly accurate.

Quantitative research is used to measure client satisfaction, to measure the impact of marketing programs (including brand recognition), to quantify the size of new markets and new market opportunities, and to determine which new and existing legal services clients intend to purchase in the future.

“Quantitative research can also be used to help an attorney prepare for litigation,” said Martel. “For example, in a case involving drowsiness claims in antihistamines, lawyers for Pfizer sponsored an independent research survey that asked 1,000 physicians if they considered its product, Zyrtec, to be sedating or non-sedating.”

Secondary research

Secondary research is an organized process of collecting and interpreting information that has been published elsewhere. “In the old days, this had to be done the hard way – combing through the dusty stacks of libraries,” said McDavid. Today, the bulk of secondary research is done online.

“If you read them purposefully, as sources of marketing information, there is still a lot of information that can be gleaned from newspapers and magazines – especially those with a legal, business or industry focus,” said Dunning. “There are clues about the economy, your competitors, and current and emerging markets.”

Ideally, a law firm has adopted a strategic plan that identifies its most valuable current clients and its most desirable future clients. “With this information in hand,” said McDavid, “you can use research to understand their industries, identify legal trends within their industries, and analyze the kind of legal work they need.”

There is a wealth of information about most companies – especially public companies – available on their websites. “For private companies, Dunn & Bradstreet is the best resource,” said Dunning. “Use the Internet to search for information, including the gossip that appears on blogs, about the company.”

Yahoo! Finance is a free service that allows a secondary researcher to search by company or competitor name, by ticker symbol or by industry. Search Systems Net provides free access to more than 35,000 public records databases. Industry association websites sometimes include their own primary research; almost all include links to good sources.

“There is a wealth of good information available to the public, if you have the time and the knowledge to find it and plow through it,” said McDavid. “Professional market research consultants know how to find information, how to interpret it, and how to prepare executive summaries that save lawyers and law firm marketers a lot of time.

“In addition, a number of players in the legal industry have created customizable products that law firms can use to greatly simplify their secondary research efforts,” said McDavid. “They are not free, but here is where you might have to spend money in order to make money.”

The most prominent of these new tools are Practice Intelligence by CCH Incorporated (www.cch.com), Market Intelligence by LexisNexis (www.lexisnexis.com) and Firm360 by Thomson (www.firm360.com). Following the panel presentation, representatives of Firm360 offered a preview of their product, which is typical of these tools.

Firm360 offers a litigation profile function that aggregates information from reported cases and dockets from Westlaw in order to reveal the litigation trends of companies, industries, law firms, attorneys and judges.

The company monitor function aggregates information from public records, Westlaw, Thomson Financial and numerous third-party providers to create online ‘company watch lists’ that are updated automatically.

The report builder function creates printed reports about key clients that can be used to prepare for meetings with clients and potential clients.

“In these rapidly changing times, where information spreads over the Internet almost instantaneously,” said Martel, “what you don’t know CAN hurt you. No law firm should make a business decision without the appropriate objective market research.”