In today's hard economic times, law firms can take a few simple steps to survive and even prosper.

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Small Firm Survival Tactics
by Terry Graham, M.A.

Many small to medium-sized law firms (and even branch offices of large firms) face a frightening situation. Their practices have been built by one or a few rainmakers who can no longer sustain the firm's revenue requirements. Attorneys recruited when business was booming (and clients paid their bills!) were hired to do the work generated by the rainmaker. Today, these partners and associates confront an unwelcome reality: they must share responsibility for getting new business if their firm -- their livelihood -- is to survive. Fortunately, change can occur more quickly and with less disruption in the small-firm environment. The challenge is to identify what changes need to be made, and then to implement them in a timely, well organized manner.

° Commitment to Change --

Management support is the single most important predictor of a firm's ability to adapt to today's challenging marketplace. A willingness to change fundamental ways of doing business, from compensation and recruiting policies to something as basic as redesigning bills to client specifications - and then active support of the process - are critical. Anything less than a full commitment by management will delay progress and may actually create an environment that makes positive change impossible.

° Planning is the Key to Success --

Like any business, a law firm must identify its products and their markets: specifically, which services it provides and to whom. (Note: Even this basic practice description may require changes that accommodate or exploit current economic conditions.) Business and marketing plans provide the groundwork for building a strong firm.

Upfront planning allows your firm to focus its efforts by engaging in "target marketing," that is, reaching a clearly defined audience with a meaningful message that is designed to generate profitable business. A firm-wide marketing plan describes the services you provide, your clients (and thereby your best prospects), and the most effective ways to reach prospects and create new business opportunities. Once planning is completed, changes in recruiting, evaluation, and compensation should follow to gain momentum.

Soliciting client feedback is key to survival. Some firms conduct expensive, complex surveys using outside consultants, but even a standardized series of questions completed at the onset of a business relationship can determine whether clients wish to be apprised of firm-sponsored seminars, receive relevant legal updates including [e]newsletters, and so forth. During and at the conclusion of a matter, a questionnaire requesting feedback on the firm's performance provides another excellent opportunity to stay in touch with client needs and perceptions. Just make sure to thank the client for his/her comments, and tell them how they have changed your policies for the better.

When your firm-wide marketing plan is in place, the next step is to define strategies for achieving your business development goals. Strategic planning involves describing and assigning responsibilities for various marketing activities including speaking, writing, media coverage, other events, and a wide range of marketing activities within a specific time frame.

° Individual Marketing Plans --

Creating individual marketing plans which outline goals and strategies in line with the firm's objectives can ensure that everyone becomes a player.

First and foremost, individual marketing plans serve as detailed programs which complement "big picture" firm goals by defining specific activities and quantifiable objectives at the level of the individual lawyer. For example, a business/corporate attorney may be charged with bringing in three new clients or with writing an article for a professional journal.

To succeed, this plan must provide a road map for attorneys to attain their personal goals. Taking into account the personality style and skills of an attorney, the plan should identify specific activities and timelines targeting existing clients, prospects and referral sources.

Key to an individual's success in marketing is training in such areas as public speaking, writing, networking, making presentations and of course, closing sales.

And remember to track all results, including inquiries that do and do not result in business. This helps to identify the most successful, cost-effective activities and refine them for even greater results. Watch for unexpected results that may flag market shifts requiring a change in your practice.

° Recruiting --

Perhaps the easiest way to promote a change in a firm's culture is by recruiting attorneys with an existing client base and proven marketing skills. Lateral hires with "portable practices" compatible with the firm's goals help to jump start marketing efforts. It is important to describe during initial interviews that part of a new hire's evaluation, retention and compensation -- including equity in the firm -- will be based upon identifiable business development successes. This shift in priorities must be firm wide to retain strong rainmakers.

° Performance Evaluations --

Accounting and billing data can be used to tally revenues and profits generated by practice areas, services provided, and individual attorneys and clients. Using this information, performance goals can be set and responsibility for meeting those goals assigned to department heads.

At the individual attorney level, clear, attainable goals that can be objectively evaluated must be defined. These goals can be expressed in a number of quantifiable ways (e.g., number of inquiries, number of new clients, dollars generated, speaking engagements, articles published, etc.). Progress towards and successful completion of those goals should result in positive evaluations at regular intervals. The key elements here are clearly setting the level of expectations, defining the rewards for success, and then consistently utilizing recognition and financial incentives as promised.

° Compensation --

Establishing a compensation system that recognizes appropriate and successful marketing activities is critical to ensuring that attorneys assume responsibility for developing new business. This is a sensitive and complex issue. Attorneys who fear failure at business development may unite to block policies that base compensation upon their abilities to generate new business. However, only if financial rewards are tied in part to business development can a firm hope to survive in today's more competitive environment. The compensation system must also avoid creating internal competition for clients, but rather support cooperative efforts to bring in and nurture new business relationships. Rewarding marketing success also means your firm will attract and retain performers, and will not fall victim to a money maker taking key clients to a competitor or his/her new firm.

° Recognize Success --

Success needs to be acknowledged in ways other than financial incentives. Some firms have formalized their recognition of marketing coups with awards, internal announcements, or simply a pat on the back in front of colleagues. This type of recognition is especially important to associates who may not be able to actually bring in profitable clients on their own, but who participate in business develop activities that bring the firm recognition and create a presence in important markets.

° Providing Superior Service

All things being equal, superior service can take your firm to the top. To truly serve your clients beyond the norm, you must consider everything you do and make improvements as needed. Take a long, hard look at how your clients define quality. Is it how promptly their phone calls are returned? The greeting they receive from your office staff and you? Your accessibility during off hours? Your willingness to design your bill to their specifications? Take the time to understand and address these points to position your firm for success.

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Terry Graham, M.A., is a legal marketing and public relations consultant based in Marin County, California. She can be reached at 415/686-8442 or tg@terry-graham.com. Check out her website at www.terry-graham.com

© 2009 Terry Graham. This article may be copied and distributed as is with no changes, and with proper attribution to the author, including copyright and contact information.

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