Smart budgeting 2021 in a post-Covid era

Interview of Prof. Laurent Marliere, CEO of ISFIN.

Many companies and firms are currently going through their budget planning. What is your advise?

Since the emergence of the Covid-19, firms have predominantly looked at cost cutting. Strategy was not the prime factor in their financial planning. They wanted to reduce costs, sometimes quite irrelevantly as the tsunami was so impactful. However, two disruptive news popped out: the US election -which will lead to less trade barriers- and a viable vaccine against the Corona.

Sound budget planning is not just about spending money. It is about investing in the right sectors to manage income streams, as well. A budget is a two channels process.

Change your mindset on your budget. The alarming media frenzy has been overwhelming, the pressure from colleagues, staff, family is substantial in an era of fear. As a decision-maker in your firm, you need to demonstrate leadership and see the mid-term picture as well. Anticipate the end of the crisis and reflect it in the budget.

Your services or products need to be adapted to the new needs of clients. It is important that you budget internal and external resources to rethink the way your deliver your services.

Some firms have been very active in handling litigation and generating income from clients in urgent needs. This is a short-term positive impact on their firm, and they might miss out the bigger picture when that temporary income dries out.

What about the marketing budget ?

On average, law firms spend 2% of their annual budget on marketing which is low compared to other sectors. Reducing your budget would be an overreaction that will impact the firm in the long run. Many competing firms will reduce their marketing expenses, which will give you more space to shine in the market.

In a pandemic, events and rallies are cancelled. Budgets in your firm become available and can be used differently. Beware, after the crisis, people will have a desire to get together and attend events while price may rise. The demand will be high, conference organizers and hotels will have to recover and adapt their prices. Networking budgets should not be cut but buffered when you will need them in some months.

Have Professionals like lawyers and CPA’s been particularly impacted by the pandemic?

The business development of independent professional firms is mainly based on peer to peer meetings at large conferences. Lawyers and accountants exchange during seminars and events organized by their traditional networks or event management companies. 

The massive cancellation of events and the fear to delegate your best professionals to places where they could get infected, heavily impacts the origination of referrals. This is particularly impactful for firms dealing internationally. International clients are usually more remunerative than domestic clienteles and international conferences are a must.

The way to go around it, is to evolve from mass networking into individual “matchmaking”. You must avoid the crowds where mass fishing is now irrelevant to precisely target prospects during one-to-one meetings organized through videoconferencing. Matchmaking is about market intelligence, fine understanding of a client’s precise needs and going bilateral instead of mass fishing. 

What other focus ?

More crisis means more digital. It is an opportunity to convince your conservative partners to step ahead in digital. People and clients are sitting at home linked to the world only through the Internet. For instance, you can accelerate:

• Content Marketing: publish content to maximize your visibility. Step into the production of short videos and create your firm’s TV channel on YouTube.
• Search Engines (SEOs): improve your website's referencing and keywords
• Cost per click (SEM): position your firm for online searches and the search for information
• App: Transform your web site in a dynamic app.
• Email Marketing: Connect with your current and potential customers with specific offers/expertise
• Social media: Improve and harmonize the use of tools like Linkedin, twitter, Facebook for professionals,…
• Statistics: develop or use datas to improve your understanding of the market
• CRM: Update and clean your clients database. Make sure you can reach your best clients through SMS and texts. Are all your clients connected to your Linkedin ? 

What about clients’ priorities? How to align with them?

Corporations and investment funds are anticipating the end of the effects of the Pandemics for June 2021.

The effects of the crisis have created a lot of opportunities to grasp low hanging fruits. This will bounce the M&A and investment market.

Before the COVID crisis, companies had two priorities on their agenda: (1) emerging markets and (2) sustainability.

Emerging markets should be considered both in terms of geographics (frontier zones with high potential) and products (disruptive and new products or businesses).

Sustainability implies impact finance, honest products, fair trade, governance, environment-friendliness.

These will be back on the agenda in 2021.

Interview of Prof. Laurent Marliere, CEO of ISFIN.