When lawyers talk to me about marketing, they usually mean finding new clients. But most of them should be focusing first on defensive marketing: protecting the clients they already have.
For one thing, there’s the economy. This series about the down economy started last January (see Part 1, Part 2, Part 3, and Part 4), and there is no sign that it will end any time soon.
On July 3, the Wall Street Journal Law blog predicted that in 2008 many lawyers will be lucky to match last year’s revenue. As long as they are not going backwards, it’s a win. Or, as the headline put it: “Flat is the new up.”
Similarly, in an August article in The American Lawyer, Dan DiPietro wrote: “Early this year, in a joint advisory issued by Citi and Hildebrandt International, we projected that profits would increase by 3 percent to 5 percent. Based on the six-month results and our sense of the dynamics in the market, we now believe [that profits per equity partner] will be flat, or even down by as much as 10 percent, in 2008. The top-tier firms will have an even tougher year, with profits down by 5 percent to 15 percent.”
When Business Week published a piece titled “The Bear Starts Mauling Lawyers” in its August 18 issue (p. 58), I thought: OK, now it’s official. When general news magazines start writing about the specific impact on lawyers, then you know things are getting serious.
The Business Week article mentioned Cadwalder “pink-slipping 96 attorneys” (15% of its lawyers), Thacher Profitt cutting 60 lawyers so far this year (25% of their lawyers) and Sonnenschein laying off of 37 lawyers and 87 staff. It also predicted that the downward trend will continue.
When the economy goes down, clients are pressured to cut all of their costs, including lawyers. And when lawyers see their billable hours go down, their motivation to find new clients goes up. Some will get desperate enough to try things like cutting their hourly rates and experimenting with value-based pricing. Some will even offer introductory services for free.
And who will they be making these offers to? Your clients. Now, perhaps your top clients have worked with you for years. You’ve sat through many a ballgame together, and they know in their hearts that you are not just the best lawyer on the planet, but also a heck of a human being. But do you think they might be just a little tempted to give another lawyer a try, if they could save a lot of money? How about if their boss was pressuring them to cut costs?
Over the long run, the legal market is basically a zero sum game. Every time one lawyer wins a new client, another lawyer loses one.
And if the economy is not challenging enough, there is also the matter of business development sophistication. Your competitors have been getting more serious about marketing for quite some time. Law firms may not move quickly, but once they get started they are hard to stop. When the Legal Marketing Association was founded in 1985, there were only a handful of members. Last summer, there were 2,700 members, and today there are 3,100. More law firms than ever are using satisfaction interviews, client teams, sales training, coaching, and more. As the 2008 Hildebrandt Client Advisory (p. 13) summed it up: “The competition to win and keep clients is intensifying notwithstanding the downturn.”
Are you worried yet? If you are ready to invest a little time and money into defensive marketing to protect your top clients, exactly what should you do?
This blog is full of advice, and so is the rest of the web. If you don’t have time to search the internet, go visit your marketing department, or hire a coach, or consider getting started with our books and CDs.
Or you could skip all the reading and just call your top client to arrange a free meeting to learn more about their business. It should be at their office, and it must be free. When we coach lawyers to do this, they often end up with new engagements. Because sometimes the best offense is a strong defense.
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