Navigating the economic crisis: the CMO's role.

• Author: Coben, Jerome L.
• Position: Chief marketing officers

The impact of the worldwide economic crisis on the legal profession is deeper and more severe than any downturn in the memory of even the most senior law firm partners. In 2008, for the first time in 17 years, average revenue per lawyer and profits per equity partner declined at the AmLaw 100 firms, according to data published by "The American Lawyer." For the second hundred AmLaw firms, average revenue per lawyer was essentially flat in 2008, while profits per equity partner suffered an average decline of 2.6 percent, compared with a 4.3 percent decline among the AmLaw 100.

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In response, many law firm leaders are taking dramatic steps to try to maintain levels of profitability that will keep their top-performing lawyers from seeking opportunities elsewhere and to position their firms to emerge from the downturn in a strong enough position to participate in the economic recovery that will surely come. Many firms have already taken significant steps to reduce costs and, to keep faith with existing and potential future clients, firms are paying an unprecedented level of attention to implementing win-win alternative fee arrangements as a substitute for hourly billing. These are steps that may fundamentally change the law firm business model.

What law firms should be doing

No single course of action is appropriate for every law firm. As firm leadership considers the steps the firm should take during this recession, an experienced chief marketing officer and his or her staff--with a good sense of the internal firm dynamics and the firm's position in the marketplace--can provide valuable insights and assistance in developing the firm's strategy. This is the time for CMOs to offer assistance to their managing partners and other firm leaders, and for law firm leaders to embrace their CMO's ability to contribute to the decision-making process and to the implementation of the firm's strategy.

There are steps that all firms, including those that moved early to deal with the recession, should consider, and ways in which CMOs may--and in some cases should--be involved in the process.

Additional reductions in overhead: In light of the uncertainty regarding the timing and pace of the recovery, firms should continue to reduce costs by laying off chronically under-performing associates and partners. In addition, those that have not already done so should consider rolling back associate salaries and deferring...