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No More 'Chalets': Legal Marketing Focuses on Building Business
The National Law Journal
August 11, 2009
The PGA Championship gets under way this week at the Hazeltine National Golf Club outside Minneapolis, but hometown law firm Dorsey & Whitney is not wining and dining clients in a chalet this time around.
When the golf tournament was last in town in 2002, the firm shelled out for a corporate hospitality tent -- dubbed a "chalet" -- at a spot along the course. Spending that kind of money this year didn't make sense -- the chalets cost anywhere from $150,000 to $375,000 depending on the hole, and that doesn't including catering. The firm purchased a bloc of tickets for partners and key clients instead.
"That was a huge expense," partner Bryn Vaaler said of the firm's chalet in 2002. "That decision reflects our broader philosophy, and we've really re-examined our sponsorship spending for things like sporting events and tables at luncheons."
Dorsey & Whitney is hardly the only law firm rethinking its approach to sponsorships of everything from golf trips and charity events to arts groups and industry conferences amid this harsh economy, according to legal marketing experts. Law firms are looking closely at their sponsorship spending and are trying to focus on events that offer the best opportunity to generate business.
"It certainly seems like firms are cutting back," said Lisa Simon, chief marketing officer at Denver firm Brownstein Hyatt Farber Schreck and past president of the Legal Marketing Association. "Firms have to strike a balance. I don't know that clients want to see that a firm is doing so well that they can afford a large tent at a PGA event. Those types of elaborate events can send the wrong message."
Simon said that there are three general categories of sponsorship spending: Client entertainment, industry associations and charitable sponsorships.
The economy is leading firms to focus more on sponsorships that can generate business, as opposed to "branding" sponsorships that get the firm's name out in public but aren't specifically targeted at prospective clients, said Jennifer Manton, chief marketing officer at Loeb & Loeb and the sitting president of the LMA.
Firms are zeroing in on opportunities that allow their attorneys to get out in front of a specific group of potential clients, such as industry conferences.
That's the approach Dorsey & Whitney is taking, Vaaler said. The firm is still spending marketing dollars at the request of clients and at client-sponsored events, but has rolled back funding in other areas. For example, it has reduced its sponsorship dollars for theater and opera companies in Minneapolis.
"How many new pieces of business walk through the door because of that? Probably not that many," he said. "We're trying to be more judicious. Spending hundreds of thousands of dollars for a tent with your name on it, it's hard to measure the business benefit."
Spending on sponsorships varies from firm to firm, Manton said. Loeb & Loeb spends between 10 percent and 20 percent of its marketing budget on sponsorships. The firm hasn't cut back on its sponsorships, but Manton knows of others that have.
A survey by BTI Consulting Group of chief marketing officers at the country's 200 largest firms in late 2008 found that sponsorships were the second-largest of planned budget cuts, behind only advertising. BTI President Michael Rynowecer said that 13 percent of chief marketing officers responded that they would spend less on sponsorships in 2009.
Ohio law firm Roetzel & Andress is among those reconsidering its sponsorship spending. Like Dorsey & Whitney, it decided to forgo a hospitality tent at a major golf tournament this year, said Brad Wright, managing partner of the Akron office. In the past, the firm bought a tent at the Akron's World Golf Championship Bridgestone Invitational, this year's version of which concluded on Sunday with another win for Tiger Woods. This year, the firm just offered tickets, although it increased the number of tickets available to attorneys and clients.
"It was never an option not to support this event," Wright said. "This is the premiere sporting event in the Akron community, and we need to support it to keep it here. However, the final dollar amount we spent will be less than last year."
Like other firms, Wright said, Roetzel & Andress is trying to "be smarter with our dollars" when it comes to expenses like client entertainment.
