After reading for months about tons of layoffs of both lawyers and staff by BigLaw firms, one may think that the legal business is in trouble in this down economy. Not so fast. An article to the contrary by Thomas Adcock appears in the recent issue of Law.com’s Small Firm Business.

Adcock points to a number of small law firms that are doing just fine, thank you very much. The reasons are varied and include:

  • Lower fee structures
  • More litigation, generally
  • White-collar defense
  • Business restructuring, as well as mergers and acquisitions
  • Professional liability
  • Insurance coverage issues

Moreover, there were a couple of things mentioned in the article that particularly ran true for me (and are applicable to any size firm). The first was a comment by David E. Danovitch of 21-lawyer Gersten Savage that clients will “stick with you through thick and thin so long as they’re happy with your work.” The other was something consultant Ari Kaplan mentioned about “becoming business partners…rather than just problem solvers” for your clients.

So, both of these latter points relate to solid client relationships, which is the key to client retention even in tough economic times; and small and medium-sized firms have a real advantage IMHO.

  • Taking care of your clients when times are tough are the key to surviving together. If your client has fallen on hard times, do not pass them over, since when they recover, they will recall who their friends are. Think in terms of a lifetime relationship, and the lifetime value of the customer. For example, Carl Sewell, expects to sell a customer 11 cars in their lifetime, plus all the referral business from them. That all adds up, and you see your customers in a new light.