Recession Proofing Your Law Firm
Recession Proofing Your Law Firm
by Melissa Rogozinski, Chief Executive Officer
A version of this article first appeared in the October 1 2022 issue of Law Journal Newsletters.
Everyone has heard the dueling economists debating whether we’re headed for a recession, or whether the Fed’s rate hikes will avert a recession, or whether we’vealready been in a recession for months. Does it really matter what it’s called when business slows down or clients cut back on new legal work?
Whatever term the economists use to describe the slowing pace of commerce, the real question is: how do you protect your law firm’s revenue stream when economic pressures are causing current and prospective clients to tighten their budgets?
Strategies for Law Firm Marketing in a Slowing Economy
Just as your firm’s team of attorneys would design a strategy to best represent a client’s interests, your firm needs to implement an appropriate marketing strategy to adapt to the changing economic conditions. Here are four marketing strategies to help recession-proof your law firm.
The first step should be identifying prospective clients most likely to need your services, and then focus on those prospects that already have the financial ability to engage the firm. This target market is ready to benefit from the specific services you know they need.
By focusing on the target clients’ existing or developing needs, your law firm is better equipped to identify which legal services the client will need if economic circumstances deteriorate. Finding the clients’ pain points enables the firm to highlight the corresponding services that address their problems.
In a more stable economic environment, it makes sense for law firms to seek growth, onboard associates, and reach into new markets. As commercial activity contracts nationwide, law firm marketing efforts need to prioritize connections with immediate consumers of legal services.
During the prolonged period of low interest rates that ended in early 2022, cheap-money-fueled mergers and acquisitions and capital projects acted as a virtual fountain of lucrative legal work. Now, successive rate hikes are raising concerns among business owners and corporate executives about what they’ll be facing for the next several quarters.
Market Services Needed Urgently
Businesses going through economic challenges cut back on spending but continue to buy what they need, and they may need certain legal services now more than ever. Law firm marketing could increase emphasis on a client’s need for contract enforcement, collections, tax settlement negotiation, or bankruptcy and reorganization. None of these legal services are optional for those who need them.
Expertise Equals Efficiency and Value to the Client
Needing legal services is not synonymous with spending more than necessary. The reflex for prospective clients to seek counsel charging lower fees will chip away at many law firms’ established revenue. A successful client-centric, law firm marketing campaign will emphasize the value of the firm’s expertise. Doing something right the first time is always less expensive than correcting errors and accepting the costs of the first mistake. In the legal services context, engaging counsel with less expertise or an inadequate support system risks bringing about unnecessary litigation fees and appellate costs. Working with the right firm, even if at a greater upfront cost, means obtaining a reliable product or service that reduces the need for remedial work in the future.
Continue Communicating the Firm’s Solutions to Clients’ Problems
Targeting a particular client market means sculpting your marketing messages for users of the firms’ services. Digital marketing managers create content that is designed to be read by consumers of the product or service being offered. General announcements of the firm’s existence along with a list of services will not draw the attention of prospective clients looking for a solution to a problem.
During economic downturns, highlighting business debt collection services in an article titled, “Are Unpaid Invoices Stressing Your Business?” is likely to draw clients who answer that question in the affirmative. Explaining the measures a business owner can take to increase debt collection success at reasonable costs should result in converting a number of those readers into consults and clients.
Consumers of legal services in periods of economic pressure do not hunt for legal services; they hunt for solutions to their legal problems. They buy solutions. Successful law firm marketing requires a marketing team agile enough to adapt to the prevailing circumstances. When executed adeptly, marketing and selling legal services in a slowing economy can become a growth opportunity in which a firm can expand its client base by focusing on the services needed most at that time.
When economic conditions change, clients who were served well when they needed help are prone to stay with the firm that delivered for them. A law firm marketing and sales strategy that continually communicates solutions to clients’ pressing problems will weather the poor economy and may enlarge its permanent client base.