Law firms aren’t immune to these challenges. Yet firms that invest in themselves, work hard to stay profitable, and continue to serve clients will thrive despite the economic downturn.
This article offers a number of recession-proofing strategies for law firms here in Canada.
These are naturally cause for concern.
Some law firms excel during a recession. Lawyers who specialize in foreclosures and bankruptcy, for example, do quite well in desperate economic times.
Many law firms, however, need to adopt key strategies in order to succeed in a recession. As the economy slows down, you’ll want to keep your revenues strong and your clients engaged.
Making good decisions now will help you prepare for the future. All you need is patience, important insights, and a thoughtful plan.
Law firms in Canada should consider the following strategies. These will help you survive even the most challenging economic times.
Diversify your practice areas
Rather than adopting a scarcity mindset and focusing on cutting back, you’ll want to revisit your practice areas. Specifically, we encourage you to look at the services your lawyers are offering, not to mention how you offer them.
From there, we encourage you to diversify your practice areas—and your offerings in general. This is an effective way to reduce risk without sounding any alarm bells. Simply expand your services, continue to build your portfolio, and connect with new audiences.
Diversification will help your law firm to leverage new revenue streams, connect with new clients, and promote lawyer (and client) satisfaction.
Take inventory of your expenses
You may feel the urge to cut every last expense during an economic crisis. The most successful law firms, conversely, take stock of their expenses and make mindful choices about what to cut and what to invest in further.
With that, we want you to review your budget. Take a look at your net income and all of your expenses. Is there anything that isn’t serving you? Are your top performers being compensated as they should? Are there any visible ways you can reallocate costs (and improve both your top and bottom lines)?
By taking inventory of where you put your money, you can make meaningful decisions that will improve your firm’s performance. This will help you keep your proverbial ducks in a row during the recession.
Invest in marketing
We mentioned cutting costs where necessary. That said, we can’t emphasize enough how important it is to continue investing in yourself. This is where marketing comes in. Though you may want to slash your marketing budget, try not to go there.
Why? The truth is that your law firm still needs to operate—and your lawyers can’t operate without marketing their services. Make sure that even during an economic downturn, you are working to increase your visibility. Aim to capitalize on the downturn instead, and educate your clients.
Get creative if needed. And of course, don’t overspend. Just continue to build your value proposition, and be consistent in your approach. From building your email list to posting on your blog more frequently, there’s a lot you can do here.
Offer subscription services
Just like the law firms that serve them, many clients also feel the need to cut back during a recession. To accommodate those price-sensitive clients without discounting your rates, your firm may choose to offer a subscription model.
Offering a subscription for basic legal services will give your clients the predictability they crave. You can offer different tiers for those with different needs, and focus on upselling where you can. Legal services like employment contracts, lease agreements, and more can all be included in a subscription bundle.
Subscription services can ultimately help to build trust. This will make clients more likely to come to you when they have additional needs beyond the scope of your agreement.
Provide fixed-fee billing
A subscription model isn’t your law firm’s only option—far from it, in fact. Another billing approach that many firms value is per-project or fixed-fee billing. This approach gives clients the same sense of security and predictability we mentioned above.
How so? Most clients would rather know how much a specific service will cost than brace themselves for an expensive bill. Even if fixed-fee billing doesn’t save them money, they’ll appreciate the transparency this approach brings.
Combined with a subscription model, your law firm can offer a clear but significantly more flexible billing structure. Your clients will thank you and stick with you far beyond the recession.
Invest in technology
Digital transformation is essential, and tough economic times are no exception. Cloud-based solutions like file storage software, project management platforms, online collaboration tools, and antivirus software will keep your law firm one step ahead.
So, be mindful of where and how you spend your money—but don’t be afraid to invest in what really matters. Prioritizing technology will help you streamline your operations without compromising quality, and your lawyers and clients will thank you for that.
While there are clear signs of a recession in the near future, law firms that are sufficiently prepared can continue to thrive. We’re confident you’ll be one of them.
Is your law firm looking to hire candidates who value these recession-proofing strategies?
Based in beautiful downtown Calgary, Urban Legal Recruitment provides access to top-tier international legal talent and resources. Our office is home to an extensive pool of candidates covering the full range of legal expertise.
Please contact us for more information, or complete our job order submission form with a description of the position you’re hoping to fill. We look forward to hearing from you!