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Legal Marketing in Latin America

Marco Antonio P. Gonçalves & Silvia Hodges


A recent survey highlighting trends in the increasingly important Latin America market underscores an inexorable business reality for expanding law firms: To succeed in this changing competitive landscape, firms must quickly rethink how they market their services.

In 2007, the Legal Marketing Association (LMA) commissioned research involving law firms in the seven largest regional economies: Argentina, Brazil, Chile, Colombia, Mexico, Peru, and Venezuela. The findings of the study provide both Latin American and foreign firms with an in-depth view of legal marketing in a region that, while often overlooked in the shadow of economic development in China and India, has reached a regional gross domestic product (GDP) for the entire region (also including countries not researched in the survey) of $2.95 trillion dollars.

With a population of 546 million, that’s 10 percent more than China.


An International Phenomenon

One might argue that successful lawyers have always marketed their services in one way or another, but the past 30 years have obviously seen a more purposive and organized movement toward deliberate activity. Business-driven changes such as deregulation, as well as technology innovations, have created an increasingly competitive marketplace that forces law firms to compete in new ways.

As is the case with any new competitive market, success in Latin America now requires adopting a strong client orientation and developing greater awareness of the competition. The need for firms to compete has prompted a number of firms to actively market their practices and attorneys. However, as has been true for US firms, Latin American firms are discovering that many of their attorneys have a rather strong aversion toward marketing, while shorter-term and less-than-strategic thinking often remains the norm.

That said, legal marketing in the largest economies in Latin America ranges from just tentative to relatively sophisticated. Based on each country’s unique cultural and ethnic background, as well as the stage of economic development, regulatory restrictions, and competitive situation, law firms approach marketing with different urgencies and apply different instruments.

In some countries, the national bar association significantly regulates and limits marketing and promotional activities, an additional challenge for lawyers and marketers alike.


Customization Required

Firms looking to expand their marketing in Latin America will quickly discover that cookiecutter campaigns across the entire region are likely to be counter-productive. Effective instruments in one country might be detrimental or even forbidden in another. Likewise, instruments deemed acceptable and effective in one nation may be rejected by lawyers and clients in another.

Generally speaking, however, Latin American law firms appear rather enthusiastic about the overall concept of marketing. Of those responding to the LMA survey, 82 percent indicated that lawyers in their firms perceive marketing as “very important” or “important.” However, this attitude might not necessarily translate into active participation by lawyers in marketing activities, since many say that a lack of time prevents them from converting intentions into concerted practice.

Marketing departments in Latin American law firms are relatively small compared to US law firms. Their activities are generally restricted to communications, public relations, and business development. The two largest economies in the region, Brazil and Mexico, typically have the largest marketing departments, with often four or more full-time staff members.

Legal marketers in Colombia and Chile are most likely to work in one- or two-person departments, whereas half of the Venezuelan law firms have one or two marketers. Law firms in Argentina and Peru were the least likely to have a full-time marketer and typically put lawyers in charge of marketing.


Planning, Budgeting, Decision-Making

A little more than half the firms in the study reported having a strategic marketing plan. Mexican, Colombian, and Chilean firms are rather likely to plan strategically, while Argentinean and Peruvian firms generally appear to prefer a more ad hoc approach to marketing. Firms in Brazil and Venezuela show no clear preference.

While a marketing plan without an associated budget makes little sense, more firms allocate their marketing dollars without the guidance of a strategic plan. Law firms in Peru, Colombia, and Chile appear to frequently have a marketing budget. Mexican and Brazilian firms had a slight preference for budgeting, while firms in Venezuela and Argentina were ambivalent regarding their decision to pre-determine marketing spend .

Latin American law firms on average allocate less than 2 percent of the firm’s annual revenue on marketing, excluding personnel costs and marketing-related lawyer travel expenses. Depending on what gets categorized under “marketing,” that 2 percent is somewhat less than the spending found by studies in other markets such as the United States. Interestingly, about onethird of the responding firms from Mexico and Peru, and a quarter of the Venezuelan firms, reported spending more than 4 percent of their annual revenues on marketing activities.

Marketing-related decision-making is still very much in lawyers’ hands in Latin America. By and large, marketers do not appear to have earned their seat at the table as have many Chief Marketing Officers (CMOs) in US firms. The managing or senior partner typically makes the decisions on the firm’s marketing plan and budget. Less often, the marketing partner, a marketing committee, or the marketing manager has decision-making power.

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Tracking Time, Rewarding Performance

One important ingredient for success is the quantification of effort. Incentives based in part on that effort is then critical to ensure the active and effective involvement of lawyers in marketing activities.

Slightly more than half of responding firms in Latin America track lawyer time spent on marketing and business development activities. Among the ones that do so, the time spent on marketing is typically taken into account for lawyers’ performance appraisals and compensation.

Venezuelan and Colombian lawyers are most likely to be appraised and compensated for their marketing efforts, followed by firms in Mexico, Brazil, and Chile. Argentinean and Peruvian law firms have yet to show widespread adoption of policies to evaluate and reward lawyers for their time spent on marketing.

However, despite the rather widespread practice of quantifying marketing effort, the survey found that law firms in Latin America typically do not measure the other, and arguably more important, qualitative dimension, which is effectiveness. Only a third of respondents reported that they measure the effectiveness of their marketing activities.

While measuring marketing in terms of overall activity is generally a useful first step, the evolving of marketing from a tactical activity to a strategic process demands proof of effectiveness. Comments from the participants in the study, however, suggest a lack of sensitivity along these lines. Marketing still appears to be perceived mostly as a “cost” based on purely promotional activities.

It will likely take some time before marketing evolves to a more strategic activity that will be seen as an “investment” rather than a cost.

Latin American law firms use a wide range of sources for education and information about legal marketing. Professional organizations and Web sites are the most popular, followed closely by magazines, seminars, networking groups, and newsletters and books.

Blogs are by far the least used source of education and information, which might seem surprising, given the many blogs that are available on legal marketing and related themes. On the other hand, most of the successful legal marketing blogs are available only in English. The fact that just a few are available in Portuguese or Spanish likely accounts for their relatively low impact in Latin America.


Marketing Transformation

Like other jurisdictions that have experienced the birth and growth of formal legal profession marketing, it is likely that firms in Latin America will gradually move from the current focus on relatively tactical communications and promotional activities by lawyers to more sophisticated strategic activities carried out by seasoned marketing specialists in growing marketing departments.

Marketers can help accelerate this process and earn their seat at the table by demonstrating that legal marketing is not a management fad directed only toward enhancing institutional visibility, but by definition a necessary focus on client needs that has a lasting beneficial effect on competitive positioning.

Instead of simply quantifying marketingefforts, regional firms will therefore need to measure the qualitative effects of marketing and in so doing emphasize results, establish marketing credibility, and increase the probability of commitment from the lawyers. Marketing will have to become a more integral part of the professional culture of lawyers instead of an extra or optional task interrupting the normal work day.

With trillions of dollars at stake, it must become much more of a proverbial need-to-have, not just a nice-to-have.


Legal Marketing in Latin America: A Nation-by-Nation Overview

The following summarizes the specific findings of a Legal Marketing Association (LMA) study of marketing activities by law firms in the seven largest Latin American economies

Argentina

The participating law firms from Argentina consider newsletters, brochures, directories, Web sites, customer relationship management (CRM), media/ public relations, sponsorship, and speaking engagements to be effective more often than do those from other countries, whereas advertisement, blogs, and give-aways/gifts are, compared to the Latin American average, less often seen as effective.

Firm events and pro bono activities were less popular here than in other countries in Latin America. Currently, none of the leading Argentinean law firms use give-aways/gifts, marketing research/competitive intelligence, or client satisfaction surveys. According to the study, firms in Argentina believe that responding to requests for proposal (RFPs) is effective, more often than do law firms in other Latin American countries.

Brazil

Firms in Brazil appear to be more likely than law firms in other Latin American jurisdictions to use advertisement, CRM, and give-aways/gifts, as well as marketing research/competitive intelligence and client satisfaction surveys, to advance their practices. They are relatively less likely to have a firm brochure, get listed in directories, or participate in RFPs than the Latin American average.

The bar association’s very restrictive rules appear to be among the biggest challenges for the lawyers and marketers in Brazil.

Chile

Chilean law firms appear to frequently choose listings in directories and media/public relations as well as sponsorship of third-party events to market their practices. As any kind of “promotion” is forbidden in the country, Chilean firms are less likely to use newsletters, speaking engagements, and give-aways/gifts. Not one firm reported using advertisement, blogs, CRM, marketing/sales training of lawyers, or marketing research/competitive intelligence.

Colombia

Leading Colombian law firms use client satisfaction surveys significantly more often than other firms in Latin America. Newsletters, sponsorship of third-party events, firm events, and RFPs also appear to occur rather frequently in Colombia, whereas brochures, directories, media/public relations, speaking engagements, give-aways/gifts, and internal marketing/communications are less likely to be used.

Currently, no law firm in Colombia uses blogs or CRM as marketing instruments. More firms in Colombia deem firm events ( e.g ., seminars, dinners, etc.) effective than in any other Latin American country in the study. Despite the apparent usage frequency, leading Colombian law firms less often believe in the effectiveness of newsletters, RFPs, and, even more surprisingly, client satisfaction surveys. Brochures, advertisement, blogs, CRM, networking, pro bono, and give-aways/gifts are also seen as less effective.

Mexico

Mexican law firms appear to perceive marketing as a cultural challenge as it was defined by a managing partner: “Marketing in Mexico must be done in a way that it is not seen as ‘vulgar’ and does not look like ‘soliciting.’”

The research suggests that directories have a strong foothold in Mexico, as three-fourths of respondents list their firms in legal directories, compared to about one-third elsewhere in Latin America. Similarly popular are law firm blogs and Web sites. Mexican firms tend to use advertisement, sponsorship of third-party events, networking, and give-aways/gifts as well as internal communications less frequently than firms in other countries in the region.

Media/public relations and sponsorships are less often deemed effective than the average for firms in Latin America. No Mexican firm in the survey considered pro bono /charitable activities or marketing research/competitive intelligence as effective tools.

Peru

All Peruvian firms in the study used brochures, Web sites, firm events, and speaking engagements. Similarly popular are directory listings, media/ public relations, sponsorship of third-party events, networking, and internal communications/marketing. On the other hand, Peruvian firms do not seem to use blogs, maintain CRM, do pro bono work, give gifts, participate in RFPs, train lawyers in marketing and sales, or conduct marketing research/competitive intelligence or client satisfaction surveys.

Venezuela

Law firms in Venezuela are more likely to use brochures, CRM, RFPs, and marketing/sales training than firms in other Latin American countries, and less likely to use newsletters, Web sites, media/public relations, sponsorship, and client satisfaction surveys. None of the leading Venezuelan law firms appears to currently use advertisement or blogs to promote their practice, as the promotion of law practice is forbidden by the code of ethics.

Law firms in Venezuela seem to be less enthusiastic about the effectiveness of individual marketing instruments than firms in other jurisdictions in the research. In particular, print tools (newsletters, brochures, advertisement, and directories) and technology tools (Web sites, blogs, and CRM) do not receive high marks for effectiveness.

More than one respondent remarked that the political situation poses the biggest challenge for Venezuelan law firms, as it is currently a “country in which the Government nationalizes the private industry and where there is little faith in the law,” according to one respondent.

About the article

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  • Of Counsel The Legal Practice and Management Report, nÂș 2, vol. 27 [Feb/2008]

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