During economic shifts and times of uncertainty, use these law firm strategies
If you have practiced law for awhile, you have experienced economic shifts and uncertainty before. During low cycles, it helps to have some law firm strategies in place that will reduce the impact of the market on your business.
These strategies include:
Offering diverse practice areas
We often advise independent lawyers and small law firms to focus on a niche practice area as a way to grow business. During an economic downturn, however, your niche may have taken a hit. If so, now may be a good time to consider complementary practice areas that can backfill your client roster. For example, if you specialize in employment law, you might shift your focus to layoffs and unemployment.
This law services provider observes:
“Generally speaking, firms can add counter-cyclical practice areas by laterally hiring attorneys who practice in these areas, retraining their current attorneys and staff, or simply marketing for these cases and then referring the cases out and collecting referral fees.”
Pay attention to business news and note trends on the rise in the current economic climate. Your expanded practice area offerings should meet the needs of clients affected by those trends.
Collaborating strategically
A recent Thomson Reuters survey showed that midsize firms will weather the current uncertainty better than larger firms:
“Midsize firms stood alone among the market segments in seeing demand growth in 2022. The report describes this apparent willingness by clients to move work in search of high-quality but more cost-effective counsel as ‘striking.’ While larger firms saw stark deterioration in all practices, midsize firms were increasingly competitive, especially in litigation, labor & employment, and intellectual property.”
Independent lawyers and small law firms can take advantage of clients’ desire for more affordable and personalized service by collaborating with strategic partners. The right collaboration with complementary law firms can help you provide more robust offerings to clients of all sizes.
Managing your reputation
Think of your networking and marketing as avenues for maintaining and boosting your reputation. Social media, blogging, podcasts and speaking engagements offer no- to low-cost ways of creating a reputation that potential clients will remember.
Don’t forget to activate your network as well. Existing contacts, friends and past clients can help spread the word about your firm when marketing and advertising budgets need to shrink. Ask for testimonials and reviews on social media to help increase your digital reach.
Innovating
Innovation remains one of the best ways for law firms to pivot and reach new client bases. Small law firms often have more nimble business models that allow them to innovate at a faster pace than big law firms. Use that to your advantage.
CASEpeer advises that law firm leaders should “keep innovators close”:
“Foster an environment where bold ideas, contingency plans, and new areas of business can be formulated to make your firm recession-proof.”
Opening up your definition of what’s possible could give your firm an edge that others haven’t yet discovered.
Reducing expenses
One of the smartest ways to prepare for inevitable economic cycles is to shore up expenses and make wise investments. A long-term office lease will not make sense for most small law firms right now, and large firms may need to reconsider how much space they really need.
Choosing a shared office space (for small firms) or subletting space to non-competing firms (for large ones) can reduce your real estate line item significantly.
Other places to reduce expenses include insurance, technology, travel, association memberships, software/hardware, advertising and more. Take time to review where you spend your money and whether you can find lower-cost or more streamlined options.
Looking to grow your law firm in Denver or Las Vegas? Reach out to us to learn more about our shared offices and real estate solutions for law firms.
