Small-medium law firms should not bother with marketing…

The time and money they save can be better spent on their staff, and on doing more of the unprofitable work they have, and the profitable work they will not get!

Seriously…there is an incredible value return across a firm from Marketing strongly…in both quality and volume…

Why Marketing?

Isn’t the answer obvious?

Don’t we want more clients?

Don’t we want more work?

Both?

What about shooting for less work?

What??!!

Yes…less work, with greater profitability and a lot of other benefits as well.

Good Business Development in quality and in volume saves time and angst in other aspects of practice management…

It can also open the door to vastly improved profitability, even with fewer new files getting opened.

Firms that get B. Dev. right earn themselves the right, and the power, to choose clients and matters, and to set more favourable prices and terms on those engagements they accept. 

Put simply, by marketing well they get the power to choose clients and matters they accept and those they don’t, how and when they’ll get paid, and how profitable the work will be if done with reasonable efficiency…

For example, a firm might open 10 matters a month on average at $2000, and generate revenue of $20,000 with a genuine profit of around $2000…a typical result for firms producing any genuine profit at all.

With the right marketing the firm could significantly improve its profitability by converting just 8 matters at an average of say, $2,725. The new revenue of $21,800 from those matters will lift profit around 90%...and there is also to be considered whether all the existing resources absorbing costs are now needed to process just 80% of the previous new matter levels. May well be costs savings there.

But doesn’t marketing cost a lot?

It needn’t, but at any event, seen as an important investment in the firm’s financial health it’s only a question of whether you’re getting an acceptable return, in the short, medium and long terms.

Few lawyers actually invoice the big majority of their time invested, and in fact the big majority of lawyers invoice relatively small parts of each workday. Some good quality research puts it at less than three hours a day.

One might assume that they spend the rest of each day doing things that are valuable in pursuit of the firm’s business plan, but that’s only the case with some people, in a small percentage of firms.

The fact is that most lawyers in small-medium firms waste a lot of time every day that could be very usefully spent on business development, to lift the quality and volume of enquiry, and facilitate improvement of pricing and profitability, save time in credit management, improve cash flow and provide funds for investment in important areas of the practice.

Because they don’t get enough quality enquiry to convert what they really should be seeking by way of new files, firms accept a lot of work that is sub-optimal…that’s a given.

They may feel they need to give free consultations that other firms charge for, they don’t have sufficient confidence to get enough funds up front and topped up as matters progress, so have more credit management and cash flow problems, and they have few long-term pre-paid retainers. They’re paranoid about scaring potential clients away because they feel they need every matter they can get, to keep people busy.

That can all be changed by effective marketing, using time resource currently invested in that can be quite easily demonstrated to be wasted at present, day in day out through the year.

By building a brand based in demonstrated usefulness to people, with generous quality of informative content, they can sift out much of the price-driven market. The reason for the right people to choose their firm for assistance, rather than the cheaper alternatives, is consistently there in the market to be recognised.

It’s not hard to do, uses knowledge the firm already has, and surplus resources it is investing in that are presently providing zero return.

When there are spare resources, it is short-sighted to put them to work doing profitless matters from price-driven clients. All returns are limited.

On the other hand, using the spare resources to provide clear, relevant information on topics the statistics show are trending, to the selected marketplaces, pays off big time in the long run, and surprisingly often in the short-term as well.

There are firms that do Legal Aid work for all the right reasons. However, consider firms that do Legal Aid work because they don’t have enough full-paying work. The time they spend on the profitless Legal Aid work could have been spent more wisely building the firm’s brand, and gradually increasing the more desirable work. It may only take one or two good files a month over and above what is already coming in to take a lawyer from seriously under-utilised to busy and profitable.

The alignment between poor profitability and disinterest in quality marketing is very obvious in the big majority of small law firms. Of relatively recent years there is a trend for more young practitioners to open their own firms, and in working with them in my observation they are fully attuned to the need for marketing, and become very profitable quite quickly.

Established firms that do not adapt to the critical importance of marketing will come under more pressure as potential work does not come their way, and any existing profit margins erode.

To blame will not be the pace and scope of change in the Profession, but the lack of willingness of many practitioners to adapt the management of their legal businesses in the most basic of ways to protect their financial health for the long term.