In a down economy, more law firms are likely to fail for a number of reasons that might not cause their downfall in boom years. And the reasons can run from how the firm is managed to how it isn’t marketed.

Judd Kessler has an article in the October issue of the Texas Bar Journal in which he shares his “Six Simple Reasons Practices Fail.” Although the article is aimed at solo and small firm practices, the failures he addresses can easily be applicable to any size firm, just not as quickly. So, what are these “simple” reasons:

  1. Poor planning and management of the firm’s finances,
  2. Inadequate technology,
  3. Ineffective leadership,
  4. Poor management of staff and lawyers,
  5. Lack of marketing planning and implementation, and
  6. Inattention to client satisfaction.

Effective data systems can help resolve many of these issues according to Kessler, who is CEO of Abacus Data Systems, Inc.;  but, that doesn’t diminish one iota the value of his short article, and I commend it to your reading.

Of course, marketing and client service issues always seem to come last. Why is that I wonder? (but I digress). The value in effective marketing planning, according to Kessler lies in (a) “establishing a brand that builds awareness, loyalty, and trust;” and (b) differentiating your firm from the competition.

As to client service, I particularly like this comment:

“Clients don’t generally express their discontent. They often feel intimidated and avoid complaining directly. Yet dissatisfied clients are often the undoing of a healthy practice as repeat business declines, receivables go down, negative word of mouth swells, referrals fall, and most dangerously, ethics complaints are issued.”

The solution is so simple really. Successful firms communicate frequently, often, constantly, all the time…..you get the idea. And they do so by returning calls promptly and also keeping their clients abreast of what’s happening with their matter(s).

Avoiding these simple mistakes can go a long way in protecting a firm in these economic times.

Isn’t the need self-evident? By that I mean, if you don’t plan what road your marketing should take, any frivolous (activity) path will get you there – to paraphrase the Cheshire cat in Alice’s Adventures in Wonderland, which I’ve mentioned before.

If you are going to the grocery store or on vacation, don’t you at least “think” about how you will get there? Of course. So, why would you give your career, your livelihood, or how you will pay for your kids’ college education less thought? Unfortunately, that is the case for too many lawyers, who just believe the legal work will always be there, which is amazing in this day and age.

I ran across an article on planning on NewIncite.com that points out four good reasons for planning:

  1. Marketing activities will be more strategic and tied to business plans;
  2. Documenting a plan allows it to be shared with everyone in firm, who can all help sell the message (See  "Marketing Should Involve Everyone in a Law Firm");
  3. Helps manage the budget and negotiate with vendors; and
  4. Keeps everyone on tract when day-to-day “firefighting” (i.e., client demands) get in the way.

Although the article wasn’t talking about lawyers or law firms, the points are applicable to our industry nonetheless.

If you are still not convinced, let’s revisit the idea that the work will always be there. That’s just wrong for so many reasons, it too should be self-evident. Planning leads to a more focused and effective approach, which leads to more business generation, and that is job security. Believe it when I say that “Rainmakers Don’t Get Fired.” 

That alone is reason enough to plan your marketing and business development activities, rather than chasing your career down a rabbit hole.

In planning for the New Year, especially since it is fast approaching, apply vision toward the kind of work and clients you really want to represent; rather than following the traditional approach of taking whatever comes in the door.

That’s the advice shared by Daniel Scocco over on DailyBlogTips in his article “Have a Vision Instead of Acting Opportunistically.” Not only does that apply to the types of clients one should seek, but the legal marketing strategies that a firm applies toward gaining those clients. As Daniel tells us, don’t “jump from project to project” – nor should you jump from marketing idea or fad of the month to the next as you try to develop business.

And this “vision” doesn’t require deep intellectual thought or lengthy strategic analysis, in my opinion. Nor is it difficult to determine. How you say? Simply take a hard look at your current client base and related revenues to ascertain what your “good foundation” is, and build your vision upon it. That analysis will tell you where your strengths lie, and in most cases the direction your vision should lead your firm’s business development efforts.

If you like most of your current clients and the type of legal work you do, then your vision should be pretty simple. Get more of the same. If not, then you need to concentrate on what part of your existing clients and work you do like, and to apply your vision more narrowly to focus on getting more of them and weaning the firm off the rest.

While some may be in denial, Warren Buffett writes in an Op-Ed piece in The New York Times (free registration required) that the “financial world is a mess”… but that he is now “buying American stocks.” He’s talking about his personal account (not his Bershire Hathaway holdings) which traditionally has been entirely in U.S. Government bonds.

His reason for buying stocks now is based on a "simple rule":

 

“Be fearful when others are greedy, and be greedy when others are fearful.”

 

That got me thinking. The same underlying principle could be applied to legal marketing; to wit:

 

When other law firms are cutting marketing budgets and staff because of economic fears, become greedy about making a meaningful impact in your marketplace by increasing your marketing and business development eforts. 

 

The time to make a difference is when others are folding their tents.

 

And Wayne’s advice from the same article: “I skate to where the puck is going to be, not to where it has been.”

 

Where does your firm want its marketing to be?

Following up on my post of last week "Too Busy for Marketing? Or Just Unfocused?,”  I ran across a post by John Jantsch over on Duct Tape Marketing where he uses the “P” word. He apparently encounters small business owners (like some lawyers I meet), who say that they’re too busy to market, and he takes issue with that. So do I.

As he says, "marketing is and must become a habitual activity in your business.” He goes on to say that "the only way to find time for marketing is to plan for it," and one way to do that is to "create a marketing theme for every month of the year, " and then carry it out on a daily or weekly basis. Anyone who reads this blog knows that I’m a big fan of John’s, but in this case I’m not sure I agree with a theme-of-the-month approach. It reminds me too much of the chasing-the-latest-fad that law firms have done over the past couple of decades.

 

Rather, I would suggest that firms develop a plan that involves multiple activities that will all contribute to reaching the business development goals that firm hopes to achieve. That doesn’t mean that a lawyer can’t focus on a particular activity for a given month (like making a speech in September, writing an article in October, and visiting the client’s place of business in November, etc.) – and maybe that is what John means.

 

In any case, the important thing is to plan and undertake business development activities on a consistent basis, even in the throes of meeting deadlines for client work. Lawyers must make time for marketing. Failure to do so is preposterous – or do I really mean disastrous?

The two best sources of new business for lawyers are current clients and referral sources (also referred to as word-of-mouth). Having just finished an action plan last week for a relatively new, young lawyer who does not have his own client base, it became pretty obvious that the place for him to start in building a client base is with referrals.

That is why I found the post “It’s Never Too Early to Pursue Referrals” by Miriam Lawrence on Automatic Referrals very timely. She shares three thoughts that “new advisors” (in our case, lawyers) should keep in mind to build a base of clients. She draws from points raised by her Automatic Referrals’ colleague Bob David:

  1. Research supports the idea that “the most important factor in a new client choosing to do business” with you is not experience but “chemistry”;
  2. Although you may not have a “track record” you do, as does everyone, have a story worth telling, and
  3. Concentrate on your strengths – whether that be a particular niche, or ability to listen well (a skill many of us lawyers could use a lot more of), or whatever.

The important thing is that you have “strengths and knowledge to offer clients and their associates right now.”

 

So, a lack of a client base is no reason for anguish, just start developing business with a focus on referral sources – whether from existing contacts or new ones you develop through networking activities.

Ran across an interesting article by Glenn Ebersole that appears on EzineArticles.com that talks about the need for a strategic action plan during a recession.

Strategic planning is always a good idea, but sometimes we consultants can overcomplicate a process when a common sense approach is all we’re talking about. Although I may not precisely agree with all his points, Ebersole recommends 10 action items that are worth considering:

  1. Never stop developing business (agreed that the pipeline for new business must be constantly fed);
  2. Reconnect with past clients (good idea to touch base with any clients who have used your firm in the past);
  3. Deliver superior service to clients (I totally agree with his advice to “WOW” your clients)
  4. Make a list of 100 existing and prospective clients to aggressively market (no reason to list that many, but it’s a good idea to come up with a dozen or two upon whom to focus your business development efforts);
  5. Implement a “Integrated Marketing Communications (IMC) Plan” (not sure what he means by this, but probably has something to do with his advertising and public relations services. Since these items take a lot longer to come to fruition in our business, I put these lower on my list);
  6. Undertake a strategy of frequent contact with clients and prospects (also referral sources, in order to stay “top of mind” for potential new business);
  7. Cross-sell clients (often not successful in our business, unless done in the context of client- or industry-based teams);
  8. “NETWORK! NETWORK! NETWORK!” (I guess he feels strongly about this. I would agree that kicking one’s networking activities into a higher gear is a good idea);
  9. Prepare a “yearlong marketing activity plan” (well, at least put a written plan in place for the next three to six months. It should get you started in the right direction); and
  10. Evaluate constantly your business development strategies and actions (however, make sure to give them an opportunity to work and bear fruit before jumping to the next fad-of-the-month).

As I pointed out in a recent post on the down economy, and as Ebersole says, much of the business development activities suggested for economic downturns make just as much sense for “normal” times too. The important thing is to “Just Do It.”

Be honest. Do you have a written marketing plan? Well, join the other 95% of lawyers who don’t – at least that is the percentage of business people that don’t have one according to Drew McLellan over at Small Business Branding. And I agree. Further, I concur with Drew that a “To Do List” doesn’t count.

His excellent post “What is your lack of planning costing you?” is short and sweet. First, he cites a number of anonymous sayings we can all agree with, which is why his point about the costs of failing to plan is right on target. Specifically:

  • “If you fail to plan, you plan to fail.”
  • “Measure twice, cut once.”
  • “A good plan today is better than a perfect plan tomorrow.”
  • “It wasn’t raining when Noah built the ark.”

What I liked most was his five reasons why a lack of planning is so costly:

  1. Spend more money
  2. Reach fewer of the right people
  3. Be swayed by persuasive sales people rather than staying the course
  4. Be less efficient
  5. Grow your business more slowly, if at all

Finally, I couldn’t resist adding a couple of my favorite adages (authors unknown) when it comes to planning:

  • “When all’s said and done, a lot more is said than done.”
  • “Planning without action is futile, action without planning is fatal.”

This is the  second installment of my responses to questions by freelance writer John Egan for an article to be published in CPAmerica International’s newsletter addressing “marketing for law firms.” Last time I dealt with suggestions and common mistakes. The next question dealt with budgeting for marketing; to wit:

3.      “Is there a rule of thumb about how much money a law firm should spend on marketing?”

No. I am not a believer in putting a dollar amount on how much a law firm should spend on marketing, merely because some firms throw out numbers like 1%, or 4% of gross revenues. It’s meaningless standing alone.

I would rather see firms approach budgeting on a zero-based system. That is, first determined what it is the firm wants to accomplish. Here’s where that planning stuff comes in again. Budgeting should only be done after the firm determines what they want to do, but how they’re going to do it. Only then should they put together a budget for their marketing and business development efforts.

There are certain basic necessities that a firm needs to spend dollars on, such as a website, promotional materials, and the like. But again, even that should be based on what it is they’re trying to accomplish in terms of goals and objectives for the law firm’s practice or practices.

It’s a good time, as we begin a new year, to consider some basics when addressing legal marketing.  I was asked this week by a freelance writer for CPAmerica International’s newsletter to respond to five questions for an article about “marketing for law firms.” Rather than present my answers in a lengthy post (which I really try to avoid – but don’t always succeed), I will present the 5 questions and answers in three posts in order to keep each short. First, I’ll take up some basic suggestions and the most common mistakes:

1.       “What concrete suggestions do you have for law firms concerning their marketing?”

  • Plan (set goals and measurable objectives for firm/practice, identify targets, and specify action items to reach those targets);
  • Budget;
  • Implement the plan, by:
  • Visiting key clients (firms will find that it is the most effectively concrete thing they can do to obtain more work),
  • Getting to know the client’s business,
  • Writing (articles, book, blog, column) and speaking to target audiences,
  • Making friends in the media,
  • Getting involved in organizations relating to target audiences, and network,
  • Seeking feedback on the firm,
  • Treating the client like a human being and partner,
  • Don’t surprise the client – about anything,
  • Returning clients calls ASAP, if not sooner,
  • Developing a personal relationship (not just a business one) with clients – or finding clients that the firm wants to develop personal relationships with,
  • Entertaining clients and referral sources,
  • Referring potential customers/clients to others,
  • Offering advice at no charge, and
  • Suggesting fixed fees, whenever possible.

2.      “What are some of the common mistakes to avoid in legal marketing?”

  • Failure to plan,
  • Failure to implement plan, and
  • Failure to get a professional to help the firm do both (since lawyers are not trained in the areas of marketing and business development – certainly not in law school).

Next: Budgeting