Latest research, published earlier this month by the InsideLegal legal IT sector marketing consultancy, raises the interesting question of whether vendors are not selling systems because there is a recession on – or because they are not doing enough to market their systems?
For example, the survey found that 46% of legal technology vendors spent more than 4% of their companies’ total revenues/turnover on marketing and 25% spent more than is 6%. This sounds a lot until you consider that within the wider business world, 45% of companies spend more 6%, with most of those spending between 8%-to-10%. Or, to put it another way, legal technology vendors are spending on average half as much as other industries on marketing.
So what are vendors spending this money on? The biggest budget item (at the time the survey was conducted in the fall of 2008) was events, followed by websites (development and maintenance), marketing collateral (brochures etc), press relations and industry relations (consultant arrangements, whitepaper development with 3rd parties etc).
Interestingly, when it comes to cost cutting decisions, the first things to go – or at least be trimmed – are not the big budget items. Instead, the first to be pruned is advertising, followed by promotional items/giveaways (and if some of the giveaways at LegalTech NY were anything to go by, this would be no loss to the industry), events, direct mail and, finally, protected until the bitter end, the market research budget. Of course, since this survey was conducted, the economy has gone into a far steeper recession than was originally envisaged (viz the number of recently laid-off staff circulating their CVs at LegalTech) and it will be interesting to see how this cost cutting pans out in reality.
Reprinted with permission from American Legal Technology Insider