Cut costs, reduce marketing, ‘do not do’ business development: law firms in 2020
One of my clients, the managing partners in a large law firm- „we shine with the light of our clients”. The light of some law firms’ clients is dimming, sources of income are running dry, and managers of lawyers fear the crisis and cut costs, at the same time in panic searching for clients. After reducing employee salaries, the next step is reducing marketing. The irony of it is that it is a „low-hanging fruit” of cost optimization. Should marketing be reduced? How will it affect sales?
Is it the right approach and how will it affect sales?
I have emphasized many times that treating marketing as a „slightly better” assistant (unfortunately still popular in legal firms) is a big mistake among lawyers. Currently this approach is backfiring on organisations and management presenting such an opinion. The main role of marketing is responding to the needs and challenges of the market. Marketing should be the partners’ eyes and ears, informing them what is going on in the business, both on the domestic market and abroad. Unfortunately, daily business operations in marketing- preparing events, rankings and ordering gadgets and a not strong enough position in the organisation effectively hinder the development of professional services marketers. Or maybe this is the time to change the game?
Marketing in the times of coronavirus
The main task of internal marketing teams as well as external marketing companies in the last month (and probably in the months to come) has been to aid advisors, consultants and lawyers in effectively advising their clients. Undoubtedly, leaders of marketing teams will deal with very limited budgets and reducing workforce. This will require a much more creative approach to resources. Marketing teams and external firms will be assessed more closely in terms of expenses and their activities. Those organisations which have a CRM a nd assess their marketing activities on a daily basis will gain an advantage from the start. I hope that this will be a signal for those companies, who have not yet adapted a CRM, to implement one as fast as possible. Currently, the Internet is swarming with offers of webinars and on-line courses. It becomes visible who is experienced in them and who is a „neewbie”, forced to change the course of marketing actions due to coronavirus. Definitely, law firms will not spend their planned budget on conferences, stationary trainings and sponsoring, but I highly recommend diverting a portion of the budget to online activities.
Should you do a follow-up after webinars? In my opinion- yes, but with care. It is worth contacting participants and letting them know that we are at their disposal. If they have additional questions, the firm will be glad to answer them. I would however avoid direct sales pitches.
How can marketing help me?
Marketing (internal or external) in professional services should act as a strategic partner. The role of marketing professionals is also to hinder ideas that may be a source of operational and reputational trouble, given the condition that partners will listen.
What am I talking about? A large number of law firms are declaring pro-bono aid. As a rule, the intentions are good, but if a campaign like this is not executed correctly, it will rather do more harm than good. We have to have knowledge of many issues- do we have enough human resources to answer the demand? It is also worth knowing that it will be more difficult for us to return to our normal services and their prices. Another argument is how our current clients see us- those for which we provide services for and pay invoices.
Will they feel like an old telecommunication client with an old telephone and expensive subscription, while the new client gets “more for less”?
If we want to help and we have the resources, we can do this through associations, charities and chambers with which we cooperate on an everyday basis. We will minimize the risk of a PR setback, and provide help where needed.
In my next article, I will point out which activities pose to bring the most advantages.
Tedros Adhanom Ghebreyesus, the Chief of WHO used the term „infodemia” during an official statement. Infodemia is a situation where there is an excess of information, often unfounded. In the current state of things, most information is shared through social media. How to navigate them? What to publish in a newsletter and what on LinkedIn, Facebook or Twitter? This is the domain of a professional marketer- for once, trust them and hide your big-lawyer ego…
What is the future of law firms?
In the upcoming future, teamwork will play a very important role, and I do not mean only the marketing team, but the entire firm. I predict that many law firms will have to change their business model. It is worthwhile to include not the management and lawyers, but also managers responsible for HR and marketing as well as external specialists that know the business. The more the merrier, or rather- the more diverse, the better.
It is obvious that in the case of firms that have several specialties or business lines, some, such as restructuring or employment law will be on demand, and others, such as mergers and acquisitions will be sidelined.
A survey done by Acritas (as of now a part of Thomson Reuters) interestingly shows lawyer opinions on the position of their practice within the company in the next 6 months. Only 15% of lawyers state that it will be weaker, 20% cannot show any predictions. Others think their practice will be remain the same or become stronger. Optimistic assumptions prevail.
No one could have prepared for the 2020 scenario, but those who are flexible towards market needs and correctly communicate their business to clients will win.
Wrapping up – a huge mistake is to drastically reduce the marketing budget, shooting into your own goalpost. Right now is the time to decide who positions themselves in the top slots during the pandemic and after the crisis.
What can legal firms do now?
No one knows what the world will look like in 2020. Will it be different? Definitely. There are, however, a few things that lawyers can do now. I recommend 6 things:
1. Call your client There are a plethora of materials available on how to handle coronavirus. Shield 1.0., shield 2.0 (1.1?), anticrisis packages, etc. How to navigate the business? This is what lawyers are for. Clients expect support in this difficult, era and advice on what to do. Of course, it is necessary to take into account empathy and how you express yourself during the conversation.
2. Arrange a virtual meetup with key clients: their priorities have changed. All business plans must be revised. Prepare a list of things that pose a threat to the clients’ business. Advise the client on how to handle them. What key areas should you cover?
Company cash-flow Cybersecurity threats of remote work
Mergers and acquisitions- freezing or searching for market opportunities. Most importantly, provide solutions, not options.
3. Prioritising and assessing the situation
During the 2008-2009 crisis, internal law departments had to reduce external advisory costs by 20%. This time, it will be no different. According to my conversations with managers of internal legal teams, this already happened in March and April. If your law firm will be the one to support the client with their priorities during a time of limited resources, it is definitely your lawyers that will be on the “short-list” of external advisors that the client will contact.
4. Prepare to talk finance
Financial issues must be a part of conversations about every new project. The financial crisis has already begun. This means that clients are already reducing their advisory budgets and must learn to navigate a new business framework.
Be prepared to:
You have to know what the cost of your work is and explain to the client why it may become more expensive. Clients will now more than ever avoid additional costs exceeding the budget.
Show the worth of your work for the clients’ business in relations to your price. Importantly, don’t scare the client with potential consequences. Everyone is already scared, even if they do not admit it. Negotiations may be long and hard, so argue:
How will your services affect operational continuity?
What costs or penalties are you helping the client avoid?
How can you help to control the clients’ costs
5. Effectiveness will be key
Today, more than ever effectiveness and efficiency are what distinguishes top legal from the competition, and is of particular importance in the case of companies who want to be proactive and do not wait for the client to come to them. If you want to be seen as the company who provides specific recommendations, talk about:
Secondment/ interim management/outsourcing – or other elastic forms of HR management in Times of increased demand for employees, at the same time with limited resources
Trainings for internal teams – propose training of the internal legal department, HR, production or taxes to help the client in difficult times
Write down internal processes and procedures, so that the client can quickly contact the correct person and diagnose the problem
In the legal and advisory profession, trust, recommendations and client loyalty is key. Below, the ladder of loyalty shows that developing client loyalty is a process. Actions which I described in the previous sections will definitely move your client up the ladder and enhance their loyalty (even more important in times of crisis) and their recommendation on the market. (source: Thomson Reuters)
6. “Business as usual” is gone
Think fast, think creatively, think differently- that is not how a lawyer is perceived. Many partners and advisors will have to leave their comfort zone, and the argument “Let’s do how we did it a year ago and two years before that”- as I often heard working in Big 4, has just gone down the drain. Will these partners be brave enough to change their organisations and build new business models, confronting their ideas in a diverse team or inviting external experts? Probably not all. Time will show who adapted the right strategy to their business.
About the Author:
Kamila Kurkowska, CEO of Firemind, President and Founder of Women in Law Foundation, Ambassador of European Legaltech Association in Poland.
Kamila is experienced and innovative business manager, focused on legal marketing, Legaltech and corporate innovation. She have gained her knowledge and experience leading marketing and business development teams at Deloitte Tax and Legal Advisory and Harvard Business Review. Since 2015 she has been successfully running Firemind - consulting company, specialized in strategic and marketing advisory to professional services and technology companies. She advices Clients on digital and offline marketing, business development strategy and ongoing projects, serving as Head of Marketing on a number of occasions. Thanks to years of effective management of large and complex teams, combined with effective building of relationships with different groups of stakeholders, business partners and clients, she has been able to build a broad and strong business network.