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… 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.

Now is not the time to panic. Panic can take several forms in today’s economic climate; most notably in the firing of lawyers and staff, hounding clients for payment (not smart marketing for the long term), and cutting costs excessively. That is part of the message garnered by LawPRO magazine from a panel of knowledgeable folks and reported in an article entitled “Surviving the slide: what firms should (and shouldn’t) do to ride out the economic storm.”

The panel, consisting of Ed Flitton, Karen McKay, Gerry Riskin, and Merrilyn Tarlton, provided insight on such topics as: Leadership; Human capital; Employee relations, engagement & morale; Client relationships; Marketing; Finances; Firm compensation; Operations: costs, expenses, budget; and Technology. All of the topics are obviously important and the panelists’ comments on each are worthy of a read.

For my purposes, a few of their comments specifically on marketing and client relationships warrant a mention here. Among other things it is very important to get close to your existing clients. It is vital that you know what they are going through, and determine if you can be more efficient and economical in serving them.

One interesting idea put forth by Tarlton involves putting associates in client offices for training (getting to know the client’s business better) and relationship building purposes. Also, developing creative fee structures, and conducting joint recession planning sessions with clients are additional ways to help each other get through the tough times.

Riskin advises firms to

“…do more marketing, but you (should) focus more on existing clients. Firms generally are reluctant to talk to clients in bad times… Get over that and call… It’s a time to get close to these people.”

One way to do that according to McKay is to

“[c]hange your focus to one-on-one. Pick up the phone and call your clients, go and visit them on your way into the office … but make sure they know that the visit is off the timesheet."

Again, there is a lot of good advice that the panel shares with law firms on how to survive the current downturn, and every firm will pick up valuable nuggets by reading this article.

P.S. Thanks to Mark Beese over on Leadership for Lawyers blog for the heads up on this panel and other resources contained in his post “Advice on Weathering the Storm.”

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’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.

The American Bar Association recently asked lawyers to predict the future. Over 14,300 lawyers responded, and yesterday the ABA issued an early summary of the survey results to those who had participated. Some results:

  • 19% of lawyers expect to lose their jobs,
  • 78% anticipate that "everyone" will be affected in some way by the recession,
  • 59% agreed that the profession will be "rocky for awhile," and
  • The majority held that the legal business won’t improve until 2010.

Based on these early results, it seems clear that it’s time to crank up your marketing going forward. The reasons are pretty straightforward:

  1. Take a look at my January 2005 post "Rainmakers Don’t Get Fired!," and
  2. “Plan to Crank up Marketing Budget in 2009. Huh?,” because many firms are likely to be cutting their budgets next year, and that means it is a great time to get out ahead of the competition.

So, now is the time to increase, not decrease the firm’s business development efforts.

Thanks to John Moore at Brand Autopsy for the alert to Neal Stewart’s YouCan’ blog, and especially his post “Recession Marketing Strategies.” Both John and I particularly liked Neal’s strategy when it comes to existing customers (read clients):

"Find ways to engage in conversation with your heavy users and fanatical consumers. More than ever, your brand’s stalkers (again, read clients who could make referrals) are going to help you spread the word."

Neal’s other strategies which I also liked include:

  • Invest in good people, as they’ll figure out to get the job done even in the bad times,
  • “All hands on deck,” meaning that everyone in the organization should have a “sales mentality,” and
  • Remain consistent, since you don’t want others (clients, referral sources, vendors, or anyone for that matter) to get a whiff of panic emanating from the firm.

But, the key to remember is focusing on existing clients. John’s conclusion really says it all: “As we marketers know, it is far less expensive to market to current customers than it is to acquire new customers … especially during this dismal economy.”

The ABA Journal is surveying lawyers about the job market and the current state of the economy. Since I’ve had several posts on this blog about the down economy and its relationship to marketing, I’m thinking my readers might want to see how they compare to other lawyers out there in the legal marketplace.

Although the ABA Survey does not deal with marketing issues per se, it may give you and your firm some intelligence that may bear on your marketing efforts. Obviously, the more lawyers that respond to the survey, the better the results. The Journal will post the results on their web site the last week in December, I am told; and I’ll report them here as well.

It only takes a couple of minutes, literally. I did a test run. So, give it shot here.

Although we lawyers were taught in law school that we could do brain surgery – if only the light was right, please don’t utilize a surgical knife when scrutinizing your coming year’s marketing budget.

As many investment advisors (oh yeah, we were taught we could do that too in our sleep) are telling their clients, now is a time to buy not sell. Well, for firms that want to take advantage of their competition, now is the time to avoid major surgery or selling short when it comes to the marketing budget.

Unfortunately, too many firms look at marketing as an expense, rather than as an investment in the firm’s future. Having said that, the budgeting process, if not well underway in your firm, undoubtedly will begin as year-end approaches. Michelle Golden has a few posts dealing with marketing budgets that are worth looking at:

The important point is to not amputate marketing from your firm’s budget at a time when your competitors are; rather, invest in your firm’s future now and let them try to catch up later.

Recently, I did a post on how important it is to stay close to your clients in these troubling economic times. Well, it seems that the idea is supported by Hildebrandt’s “Special Client Advisory: Fall 2008.”  

The special advisory suggests nine steps for firms to consider in weathering the storm; and includes such things as concentrating on collections early vs. end of year, work on next year’s credit line now, scrutinize vendor support expenses (even consider hiring an outside vendor contract negotiator like my client, Mattern & Associates), review under-performers and excess capacity, and consider shedding undesirable practice areas, while reassuring key partners and associates who may be anxious.


The one step mentioned that is closest to my heart has to do with marketing and client relations. The advisory states:


“… stay in close touch with your clients, especially those key clients that are important to the firm’s future.  Now is not the time to save money by cutting back on productive marketing expenses.  Your clients are experiencing the same anxieties and uncertainties as the firm itself, and ramping up communication to them will stand the firm in good stead when economic conditions improve.  Lawyers have time on their hands, so put it to good use with increased focus on client development, client teams, and appropriate business development training.”


As I mentioned in that earlier post, in times like these stay close to your family, and closer to your clients.  But, don’t just take my word for it.

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?

 Some law firms will feel the pinch more than others during the current downturn. But all firms will feel it one way or another. Whether it is less work, losing clients because of mergers/acquisitions, or because of difficulty in collecting fees from financially stressed clients. When it comes to making payroll or paying your lawyers, what do you think clients will do?

Thus, it is very important for firms to do everything they can to minimize the impact of what certainly will not be a smooth road for the foreseeable future and beyond. One way is to work very hard at “bullet proofing” (as Gerry Riskin advises) your existing clients (or in Gerry’s words “crown jewels”) as much as you can. 


And as Thom Singer at Some Assembly Required accurately tells us in an article that applies to any company that it is the “relationships with those (with) whom you do business that…(leads) to beating the competitor in good times and in bad times." Those relationships are even more important in a down economy, because business is just that – “down”- and competition definitely gets more intense when times are tough.


So, how are your client relationships these days? Does everyone in the firm realize the importance of their interaction with clients, referral sources and prospects? From the receptionist to the firm couriers, to the associates and partners, everyone has a role in developing and enhancing client relationships – and avoiding damaging those relationships.


Two ways to improve client relationships are: by visiting your key clients, and seeking client feedback. Both will help reduce the adverse impacts of a recession on your firm.