How to Prepare Your Law Firm for a Recession
9–11 minutes to read
Hard times don’t discriminate. They don’t care if you have a family of six or if your law firm is performing the best it has in years. Since you never truly know what’s coming next, the best thing you can do is have an action plan.
Take the current state of the world for example. A recession is coming to the United States. The sooner you accept that, the stronger you can get through it.
In this article, we’re going to go over:
Understanding the Difficult Truth
Does this sound like you?
Your firm’s caseload has been steadily declining, and you struggle to maintain consistent cash flow month-to-month. No matter how hard you work, the numbers don’t ever seem to add up.
If this sounds familiar, your day-to-day life as a law firm owner must be overwhelming. Now imagine yourself this same law firm owner during a recession.
Newsflash: it’s not going to get much easier — but that doesn’t mean it has to bring you and your firm down.
Let’s face facts: a recession is heading toward us.
But that doesn’t mean you need to close your firm’s doors permanently. It doesn’t mean this is the time to go into hiding and wait for the madness to end either. In fact, this is the perfect time to turn up your marketing efforts, improve your business foundation, and reach out for support.
During a recession, the economy struggles, people lose work, companies make fewer sales, and the country’s overall economic output declines. The point where the economy officially falls into a recession depends on a variety of factors, such as when a nation’s economy experiences negative gross domestic product (GDP), rising levels of unemployment, falling retail sales, and contracting measures of income and manufacturing for an extended period of time.
As a law firm owner, running and hiding isn’t going to bring you the security you’re looking for. Think of your firm as a living, breathing organism: it needs clients to sustain it — and as we know, hard times don’t discriminate. People are still going to need your help as a lawyer, and if you decide to go dark during a recession, that’s business you’ll be missing out on in addition to that would-be client not receiving the help they need.
Are you seeing how pulling back is a lose-lose situation for everyone involved?
In fact, a recession can be seen positively as a way for you to do a complete overhaul of your marketing and other areas of your law firm. Just because something worked a few years ago doesn’t mean it’s going to work forever, so instead of trying to force results for something out of nothing, take the time to reevaluate and reassess.
Big time players make big time plays. If you’re already running a successful law firm, chances are you’re going to be much more prepared if the unthinkable happens. Your market knows who you are because you’ve invested in strategic marketing efforts and put time and effort into building your brand on the whole. Your competition knows you, is afraid of you, and wants to quickly scramble to attempt to copy your efforts in order to ensure their long term success. Your loyal followers are going to continue working with you because you’ve kept them at the forefront of your law firm’s operations, and they enjoy feeling cared for and appreciated.
Doesn’t this sound like the kind of future you want?
After learning about what could happen, this begs the question: If a recession does happen (which it’s looking like it will), what should I, a dedicated law firm owner, actually do?
We’re glad you asked.
What to Do During a Recession
It’s hard to know the exact right moves to make when things go awry, but that doesn’t mean you have to be aimless.
As we’ve learned, running, hiding, and going dark are the wrong things to do. If you want to continue to help people with your work and try to combat the effects of a recession, go against the grain.
Let’s go back in time and take a look at the last major recession back in 2007-2009, appropriately called The Great Recession. The decline in overall economic activity was modest at first, but it steepened sharply in the fall of 2008 as stresses in financial markets reached their climax. From peak to trough, US gross domestic product fell by 4.3 percent, making this the deepest recession since World War II.
According to a Millward Brown study, 60 percent of the businesses that decided to cut themselves off from the world during the Great Recession saw their brand use and image decrease by 24 and 28 percent.
The craziest part? We don’t even have to go all the way back to 2007 if we want to see what a recession looked like. Let’s go back even just a couple of years to 2020 when the COVID-19 pandemic shocked the world.
We all remember the constant state of panic, the never-ending Zoom calls, the strict social distancing rules, and all of the other new oddities that came with this unknown virus, but remembering the effect it had on businesses — particularly law firms — stands out.
If you want to avoid going back to that new era of dark ages, here’s what you need to prioritize doing for your law firm:
- Double up on all of your content. Think outside the box, triple your presence on social media, and don’t stop catering to what your clients need.
- Focus on your clients. They are the reason your law firm is still operating successfully. Show them that even during the tough times, you’ve got their best interests in mind.
- Streamline your processes. Think of a recession as a time of rebirth. Figure out what is working for your firm and what needs to change. Don’t be afraid to do a complete overhaul in order to find the results that work best for your individual clients’ needs.
- Train and develop your team. Even if you’ve got the greatest team in the world, there’s always room for improvement. (In fact, A-players want constant challenge and growth.) Take this time to analyze what your team may need in order to give your clients a world-class experience to ensure they won’t want to work with anyone other than your firm ever again.
The key takeaway for being successful when others aren’t? How you treat your clients will determine your level of success. Focusing on their day-to-day touchpoints as well as their long-term needs will ensure that they feel secure in their decision to partner with your firm and your team.
Clients want to work with brands that they recognize and trust, so by investing early to ensure your brand is well known in your market, you will continue to attract new clients as well as keep current clients pleased with your ability to grow and stand strong — even under pressure.
Don’t be afraid to try something new in a time of crisis. Similar to your law firm’s vision, understand that you may need to be flexible. Whether you need to change up your policies, protocols, procedures, or pricing, everything should be ready to change if needed. Nothing is meant to stay the same, and trying something new could be exactly what you need in order to get your law firm back on track and moving forward once again.
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What NOT to Do During a Recession
Though a recession might feel like a lawless time period, it doesn’t mean you can’t build something structured and sound out of it. Your law firm doesn’t have to crumble just because times are tough. What’s the point in building it in the first place if it will falter at the first sign of danger?
The most important thing to avoid doing in a recession is shutting down completely. That will get you nowhere and in fact will ensure that you won’t come out stronger on the other side.
Take a look at this:
Craig Greening of Greening Law first made the decision to partner with Crisp to produce a brand video to tell his firm’s story, then ramped up his commitment to his firm and joined the Crisp Coach program in 2019. With an impending pandemic on the horizon, Craig quickly realized his decision to partner with Crisp was one of the best he had ever made. In his words:
“I never would have survived COVID without Crisp. I wanted to transform my business, make it into an enterprise, and spread my message of ‘getting back on the right path’ to all of the people who have hit a low point in their life and needed someone to lift them back up.”
If Craig hadn’t been thinking ahead the game, he never would have partnered with the catalyst that would propel his law firm forward, even causing it to earn over $200,000 in revenue during peak COVID-19 months.
How’s that for being prepared?
One of the reasons Craig was able to prepare his firm for the future was because he stepped up to support his clients in ways he hadn’t before. They had all grown loyal to his firm, and when the time came to show them that he cared, he did it.
You can do this, too — and it doesn’t have to be during a recession either. Keeping your clients in the loop has many different looks, whether it’s sending them an annual birthday card, inviting them to an event at your office, or keeping them in the loop with a client community newsletter, anything you do to make them feel special will help build your relationship. Always find ways to stand out from your competition.
Remember: your clients are also experiencing a recession. They are undergoing the difficulties that come with economic stress and trying to remain calm and competitive in their own respective industries. Don’t count them out just because you’re scared.
Here’s a quick recap of things that you should NOT do during a recession:
- Lay off your team
- Ignore your clients and stop reaching out to potential clients
- Hit the brakes on marketing and making your firm known
- Go dark and stop all operations completely
- Keep your processes the exact same if they’re not working
Your law firm and your team members will thank you if you can remain cool, calm, and collected when experiencing life in a recession. Be the leader they need you to be.
A recession is not a death sentence — but the wrong response could be.
Many companies have made it through recessions before this incoming one, and there’s no reason why you can’t make it through too. As long as you’re prepared ahead of time, keep your clients and potential clients at the forefront of your business plans, and focus on turning up the heat on your marketing efforts instead of going dark, then you’ve got a lot of fight in you.
Instead of viewing this as a negative experience, do everything you can to turn it into a positive one.
The future is unknown, and that’s okay — but how you respond to the unknown will prove your willingness to be a successful law firm owner.