Thank you for sharing!

Your article was successfully shared with the contacts you provided.
Housing starts are down 28.4% versus a year ago, foreclosures are up 57%, unemployment was 5% in December 2007 and gas prices reaching $4 per gallon hardly seems out of the question. Whether we are heading into or are actually in a recession, there is little wonder why businesses in all industries find themselves uncertainly pondering their next move. As a vital part of the business community, the legal industry is just as susceptible to succumbing to the Chicken Little that exists in all of us. And, while some have suggested that the legal industry is recession-proof, that sentiment fails to take into account that there is no singular legal industry, but rather a variety of legal areas, each with specific nuances that are affected in different ways by economic changes. How law firms will survive or even thrive in such an environment is, in part, a function of how each views the role of marketing in securing the short- and long-term health of the firm. But “marketing” does not refer to promotional tactics alone. Rather, it means the overall means by which business is conducted and, in this case, is defined by the traditional marketing model of the four “P’s”: product, place, promotion and price. Clearly, economic cycles bring change. And with change comes both the potential for adversity as well as an opportunity for significant financial gains. Firms that adjust their 4 P’s to accommodate new economic realities will be the ones, in most cases, that ultimately weather the storm. Adjusting the mix of services “Product” refers to the goods or services that a business sells. For law firms, this involves a specific scope of legal services. The way a law practice adjusts the “mix” of services it provides will have a direct impact on its business development fortunes. Smaller, niche practices have the least flexibility in this regard, with those focusing on real estate, for example, certain to face some challenging times. But this need not be confined to real estate alone. A practice that emphasizes a very specific area (e.g., reproductive law) may also find itself bucking against the cost-saving energies of its clients and/or prospects. Weathering the storm may require a greater emphasis on creative promotional efforts (to be discussed later). Yet other practices focusing on a single area, such as personal injury law, may experience no change at all. Down times do, however, provide the impetus to get back to some promotional basics, tracking calls and Web site hits and pursuing opportunities to carve out a bigger share of the market. Law firms with multiple practice areas are in a better position to address economic downturns through a re-evaluation and reallocation of their product mix. A firm might decide not to dramatically increase its promotional spending in the coming year. But it can shift personnel to accommodate market changes � a challenging proposition given the difficulties in judging the new-business pipeline. For example, one of the variables a firm could look at is the relative skew of residential versus commercial real estate work. Equally important is leveraging unique offerings that the firm can offer. A particular strength in the area of environmental law might be leveraged to a firm’s advantage in a host of legal areas � including real estate. Analyzing and leveraging the firm’s product mix also means seeking out opportunities that come as a direct result of the recession itself. Bankruptcy services are an obvious example, but difficult times mean that companies requiring cash, purchasing distressed businesses, etc., will all be seeking appropriate counsel. Similarly, during difficult times, contracts are broken and desperation can set in � often leading to a greater reliance on litigation services. Staying close to clients Under the 4 P’s model of marketing, the concept of place in traditional consumer goods marketing refers to the manner and location in which a product is distributed or sold. For law firms, services are usually distributed through the interaction of the attorney and the prospect or client directly (regardless of whether this transaction takes place at the attorney’s office, the client’s office or over the phone). This fact points to the need to re-examine and readdress the manner of these transactions. It is important that law firms stay as close to existing clients as possible. This is particularly true for financial clients, whose need for legal counsel may be great � both for good as well as for not-so-pleasant reasons. It also is the marketing variable in which the greatest opportunity for cross-selling firm services lies. The relationship-building aspect of business development also suggests the importance of building a positive reputation. And not far removed from this is the image a firm wishes to convey. The third “P” of the marketing mix � promotion � is the means by which this is accomplished. “Promotion” means all of the elements necessary to create an environment in which a sale can be made. It refers to the variables that go into creating a market positioning, generating awareness and branding. Here, larger, well-heeled law practices enjoy a tremendous advantage � if they choose to see and capitalize on it. During difficult times, buyers are more leery of trying something new. The old adage, “No one ever got fired for hiring IBM,” applies. This is particularly true for intangible offerings such as legal services. Those firms that have worked to develop a brand based on a meaningful premise that resonates with their target market are much more likely to prosper both during and after a downturn. For such firms, an economic downturn offers an opportunity to thwart competitors, increase profits and gain valuable market share. Studies have shown that companies that take an aggressive approach to promotion during a recession are much more likely to increase market share and realize higher net income and profitability during a downturn as well as after the downturn ends. See “Recessions Provide a Perfect Opportunity for Advertising to Do Its Job,” MacTech: The Journal of Macintosh Technology, www.mactech.-com/adsales/recession_marketing/; Tera Johnson, Chrysalis TCF LLC, “Marketing in a Recession” (PowerPoint presentation). The challenge for smaller firms is much greater, although certainly not insurmountable. These firms need to become more tactical during down times. The ability to generate broad amounts of prospect awareness or “brand” themselves is limited by their financial resources. Therefore, such firms need to resort to short-term, guerilla promotional activities to build their business. Some of these are obvious: newsletters, seminars and ads sponsoring local civic or charitable organizations. Particularly effective are those tactics that turn an intangible into a tangible. That means offering prospects something (e.g., an informational brochure or seminar) that allows the prospect to begin a relationship with the firm, without any real commitment. Some firms get quite creative in implementing programs like this. An example of this is development of an informational brochure to educate (not sell) prospects regarding the major tenets of a particular area of the law. Aside from giving out the brochure at the office, at seminars and at presentations, the firm can forward the brochure to the local news media for free dissemination to each outlet’s viewership or readership. Another example involves turning the firm’s Web site into more of an informational portal, creating a weightier presence that allows the prospect to appreciate the depth of the law firm’s knowledge base and brings higher placement on the Internet’s search engine directories. In fact, Web site optimization is one very controllable promotional element that smaller firms can implement to facilitate prospect calls. The many ways to do this are fodder for another article. Integrating efforts Another concept smaller practices need to consider is one of “integration.” This means utilizing various promotional tools in a synergistic manner so as to maximize their effectiveness and cost efficiencies. For example, one might host a live or Internet seminar as a means of getting prospects. This is also a means of developing a database of individuals and companies for the firm’s e-newsletter mailing list. In the example noted above, the informational brochure can be used not just as a handout, but as the basis for a press release that finds its way into the local papers. Limited, low-cost advertising efforts touting an elder law firm’s free informational guidebook doesn’t just promote the book, but generates awareness for the firm itself and increases its prospect database. Offering free information or sponsoring a worthwhile cause is a great way to generate exposure and highlight the firm in a manner that is classy, but does not need to squeeze every last penny out of the firm’s coffers. When speaking of cost-saving marketing tools, public relations comes to the forefront. Having press releases and articles placed in the local newspapers and in national trade and legal industry publications, and landing interviews on broadcast media, can be positives for law firms of any size � if for no other reason than they require minimal out-of-pocket spending. That alone should make them attractive tools for the smaller firm. But it should be noted that they also are not without their costs. First, unlike other types of promotional tools, public relations cannot be controlled in the same manner as advertising, direct mail and the Internet. Second, results from such efforts tend to be more long-term in nature. Should the small firm institute a public relations campaign during tough times? Absolutely. But it is also far better to have implemented such a program well in advance of such periods. (Again, the importance of gazing into the crystal ball and forecasting and tracking prospect calls, Web site hits and volume of clients can’t be overestimated). Doing so increases the firm’s opportunities to ride out a recession, but also increases its chances to thrive even more thereafter. The third cost of public relations is the significant amount of time that’s required. It’s been pointed out that most marketing tools can be plotted along a continuum of less cost/more time to greater cost/less time. Public relations skews towards the former and can sap a firm’s resources in a manner that perhaps other vehicles cannot. Hence, the smaller firm, which exists without an in-house marketing individual or department, must make a conscious decision to take on this cost, if only because, unlike hard, out-of-pocket expenses, this cost can, in fact, be absorbed through hard work. The final “P” in the marketing model is that of price. Not much controversy exists here. Most of the prevailing wisdom suggests that law firms should avoid the temptation to be a low-cost provider. Although many firms, particularly smaller and/or midsize shops (often outside the big city) seek to compete with larger, “downtown” firms by hawking a “big city parity/lower cost” positioning, this approach is still based on a value premise, not on necessarily offering legal services at the lowest fees. Reducing fees to ride out an economic downturn can also lead to false expectations that such fees will remain in place once the economy turns around. The best thing any law firm, of any size, focusing on any area of the law, can do to weather an economic storm is to anticipate its arrival and plan accordingly. The next best thing is to analyze the business right when the downturn hits and explore the appropriate product mix, improve existing relationships, promote aggressively through either branding and/or tactical methods, and maintain normal pricing guidelines. Although none of the above guarantees a firm’s surviving/thriving in a tough economy, not doing so certainly limits the possibility greatly.

This content has been archived. It is available through our partners, LexisNexis® and Bloomberg Law.

To view this content, please continue to their sites.

Not a Lexis Advance® Subscriber?
Subscribe Now

Not a Bloomberg Law Subscriber?
Subscribe Now

Why am I seeing this?

LexisNexis® and Bloomberg Law are third party online distributors of the broad collection of current and archived versions of ALM's legal news publications. LexisNexis® and Bloomberg Law customers are able to access and use ALM's content, including content from the National Law Journal, The American Lawyer, Legaltech News, The New York Law Journal, and Corporate Counsel, as well as other sources of legal information.

For questions call 1-877-256-2472 or contact us at [email protected]

Reprints & Licensing
Mentioned in a Law.com story?

License our industry-leading legal content to extend your thought leadership and build your brand.


ALM Legal Publication Newsletters

Sign Up Today and Never Miss Another Story.

As part of your digital membership, you can sign up for an unlimited number of a wide range of complimentary newsletters. Visit your My Account page to make your selections. Get the timely legal news and critical analysis you cannot afford to miss. Tailored just for you. In your inbox. Every day.

Copyright © 2021 ALM Media Properties, LLC. All Rights Reserved.