The Disconnect Between Approved Budgets and Spent Dollars

Posted by on Mar 11, 2009 in Budget, Career, Law Firm CMO, Strategy | No Comments

A recent conversation with a colleague brought up an issue that really bothers me. There is a huge “disconnect” between the marketing budget that is approved by firm leaders and the actual direction of the marketing dollars spent.

Please tell me this isn’t still true. I know there are CMO’s out there business planthat really control the direction of their spending during the year once the budget is approved. They have and act upon; their authority to spend approved dollars and their authority to allocate resources based on their professional expertise. Right?

Whether a $200,000.00 expenditure on client interviews, or the $1,000.00 expenditure for a staff member to attend a conference, the CMO is accountable for the results at the end of the year. Right? The CMO is paid for their expertise in understanding and determining the best way to budget resources.

Unfortunately this was only a shadow of my experience as a CMO, and from what I gather from others, it isn’t the way it works for many firms, at least not yet.

Not that the partnerships aren’t willing to try putting a CMO into the top branches of the decision tree, but too often, in the end, it is just a title. That title, in a law firm, does not secure the empowerment that the business model of a C-suite organization encompasses. Will the new economy change that, or dilute it? Please share you comments.

Technically speaking, a CMO submits a plan to the owners of the corporation/partnership/law firm/executive board/etc., it is approved, and the CMO is charged to go forth and execute. In some cases there is monthly or quarterly oversight of progress, especially in public companies, otherwise, it comes down to the end of the year results that can be tied to the outcome of programs and investments. The CMO’s performance is on the line –pretty simple formula, period.

Why do law firms complicate this process? For example, the plan, the budget number, and tactical resources required for realizing plan objectives are approved at the beginning of the fiscal year. Outlined in budget are, among other items, 20 client interviews, key partner sales training, search engine optimization, and a nationally recognized speaker for a partner retreat.  Then when these items are initiated and the management committee is presented with the program for the interviews or the speaker for the retreat, they immediately ask for “further information.” Translate -how much are we paying – we want to approve this expenditure…. I just don’t get it.

It seems to me that at that point they are actually doubting their own hiring decision. Do we trust our business decision to hire this person? Can they give us marketing direction that moves our enterprise forward? What’s that about?

No disrespect intended to lawyer leaders whose involvement in decisions is valuable to the CMO, but once the budget and the programs are approved, let the chips fall where they lie. It’s the CMO’s responsibility, reputation, AND compensation on the line.

So, I ask, is some of this because law firm CMO’s (and marketing directors) allow it to happen like this? Is this because the pool of law firm CMO’s has been forced into accepting this model? Do CMO’s go into a position knowing it will happen and operate around it?  Is this why CMO’s with experience from outside the legal industry fail so often?  What should be done? How do we transition the industry?

I’m very curious.  Aren’t you?

Too reluctant to discuss in the comment section? I hope you’re not because it will further the conversation. But, if you are, your offline comments and insight are welcome and confidential at jln@lawgravity.com.

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