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Amid the merger and acquisition mania, small and midsize law firms are struggling to maintain both their identity and their earnings. One way to do this is by mastering strategic niche marketing. Whether your firm is considering a merger or working to maintain the status quo, penetrating a viable niche market with a long-term, dedicated marketing campaign can make the difference between sustained growth and dissolution. Legal professionals have various notions of what niche marketing is. In marketing lingo, it is an approach designed for a specific niche where the firm can leverage its strengths in order to increase penetration. Niche marketing is based on a written plan with a fine-tuned marketing message to a well-defined list of contacts within the niche. The plan includes an integrated marketing campaign that encompasses channel marketing, public relations, advertising, and communications planning. A targeted strategic niche marketing plan will pre-qualify the law firm as a preferred provider of services to the defined target market. The desired results are increased revenues, cost efficiencies, and an identity for your law firm. CHOOSING A NICHE MARKET Managing partners say they already practice niche marketing, but do they? A viable niche is one in which a law firm has a strong foundation in the industry and the market size is large enough to sustain long-term growth. If a midsize firm is building the desired niche from scratch, it should generate a minimum of $1 million in revenue, realized over a two- to three-year period. If you have some critical mass in the niche, your goal is to double revenue within a three- to four-year period. (These guidelines vary with size and revenue of the firm.) Critical to choosing your niche is knowing your firm and which stage of the life cycle it’s in. The strategy for a small firm may be to become the city or regional leader, while a larger firm may choose to penetrate a niche market on a national level. A midsize Midwestern law firm chose real estate finance as its niche. This market included lenders and brokers who needed legal solutions to finance problems. On the local level, the firm began cultivating relationships with bankers, then leveraged these relationships when their offices began serving national lenders. The senior managing partner and his committee pooled their experiences within the firm and began a targeted campaign to bankers, brokers, and lenders on the local level. They joined marketing activities with national associations in the real estate finance industry. They attended and spoke at conferences and published articles in the national trade press to broaden their market base. The partner picked an inspirational leader, or niche champion, who demanded the respect of the entire firm and was able to keep the team focused on the strategic marketing plan for more than two years. DEVELOPING THE CAMPAIGN Most legal professionals find the implementation of a strategic niche marketing campaign to be a challenge because it takes a long-term, dedicated effort by a respected leader and a team that has marketing savvy. The leader or champion should have a marketing plan that forecasts the next two to three years for each niche market. Equally important is the full support of the management committee or senior managing partner, and the approval of overall marketing and financial goals for the chosen niche or niches, including profit-and-loss statements. More steps to a successful niche marketing plan include the following: � Stay with the marketing plan for each niche. It may take from two to four years to realize returns. � Coordinate the strategic niche marketing plan with the financial plans and forecasts of the law firm. � Pick a growing niche or one in which your law firm has an initial client base (at least three to six clients) and practice experience. � The champion must devote 80 percent of her marketing time to the niche marketing campaign. Team members must devote more than 50 percent of their marketing time. � Conduct your own analytical assessments of opportunities, including definition of the business problem faced by buyers, the firm’s strengths and weaknesses in the niche, market segmentation, competitive analysis, and market perception. � Identify the following in your marketing strategy: strategic position, “foot in the door” wedge products and services, cross-selling opportunities, detailed objectives of a marketing program, and management sign-off. � Execute a marketing communications plan for each niche, including: a positioning message for the niche, a targeted “A” list of contacts for each niche, communications plans and schedules, collateral materials, a public relations plan, marketing activities, and events. � Make a formal presentation of results on a periodic basis to the management committee or managing partner. COMMON PITFALLS If the strategic niche marketing approach is so systematic in its applications, why do so many legal professionals fail to apply it successfully? Some common reasons are lack of dedication in managing the process, choosing the wrong niche, making poor assumptions about the strength of their practice, or losing key rainmakers in the niche. Moreover, many partners do not commit the resources and long-term dedication required to achieve the desired results from the niche champion, marketing team, and firm leaders. They are often fixated on their own practice area and achieving short-term success. The shift to niche marketing thinking must be from individual to group goals that are set by management and implemented down the line. Here are some additional pitfalls: � Breakdown in communications in the firm regarding the strategic niche marketing campaign (lack of periodic updates and progress reports with the marketing team and the firm). � Lack of discipline to stay focused on the long term and inability to keep the group focused. � Inability to continue the building process of the niche bases. For example, if the niche is Internet companies, then the marketing campaign must focus on developing expertise and resources in this niche, targeting clients that will help build the reputation of the firm. � No advance planning of financial goals for the niche market and failure to win approval from firm management. � Inability to leverage the niche so that the firm can be known as “the Internet firm” or “the real estate finance firm” in the marketplace. � Choosing the wrong niche (one with inadequate market size or flat growth, or one in which the firm has little experience and expertise). � Inability to keep up with market changes and incorporating them into your practice. � Lack of communication with niche clients that you are on the leading edge with your niche (holding joint symposiums or conferences with your niche associations or trade groups to highlight the latest industry practices). As the economics of law firms change and evolve, the firms that successfully use niche marketing will be the winners. If the managing partners truly know their practices well and position themselves in a successful niche or niches, they can increase their profitability when their marketing plan is implemented consistently by a respected leader who has the support of the entire firm. Whether your firm is a merger or takeover candidate or not, strategic niche marketing creates both a valuable asset for future business and good will for the partners. Andre Lerman is director of law firm marketing consulting for the national law firm consulting practice of American Express Tax and Business Services Inc. ( www.axptbschicago.com). He can be reached at [email protected]. Donelle K. Duvall is a marketing manager at American Express Tax and Business Services.

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