How are you future-proofing your law firm?
It’s a question we find many attorneys don’t take enough time to think about. You’re wrapped up in what’s happening how; your firm’s cases, keeping your clients satisfied, and making sure your marketing strategies are working now.
Whether it’s through CLE events, blogs, social media, email newsletters, or a combination of them all, it’s important to stay up-to-date on the trends that are shaping the legal industry – from marketing and technology to overall legal industry trends.
The start of a new year is a great time to reflect and plan for how you’ll keep up with the trends and set your law practice up for continuous growth. It’s so important, in fact, that we’ve dedicated two blog posts to the subject. In part 1, we’ll discuss the overall trends you can expect to shape the legal profession in 2020. We’ll also discuss traditional advertising trends like TV, radio and direct mail. In part 2, we’ll assess the digital and technology trends that law firms need to be aware of.
In 2019, revenue for legal services was up about 6% over the prior year. However, the revenue growth was driven largely by increases in fees, rather than increased demand. It may grow in 2020 due to a predicted increase in business litigation demand.
What might this mean for your law firm? This depends on your area of practice and location. In most cases, it means that in order to grow, law firms should focus on increasing their market share and not rely on increased demand to fuel growth. This is what makes law firm marketing so competitive, as firms are essentially vying for a finite group of people in need of legal services. Expanding geographically is another option to increase market share, but this tends to be costlier, so you’ll want to carefully evaluate any potential new offices you plan to open.
The 9-5 is becoming outdated in many industries, and the legal industry is no exception. This is changing the dynamics of how law firms operate and forcing many managing partners to re-think their approach to how attorneys work. The ability to offer flexible working conditions can go a long way in attracting young talent to your law firm, so it’s important to consider if your firm is growing and looking to hire talent over the next few years.
If you don’t already, you should ensure you have a policy on how flexible your firm can be when it comes to working remotely, working non-traditional hours or part-time. In one report, more than half of respondents from medium to large firms reported being offered some form of flexible working options.
If you cannot attract or retain the right talent, your firm’s business will have a difficult time growing its business. If it’s not already, consider re-examining your benefit offerings and perks to ensure you’re keeping up with the changing needs of attorneys.
When a potential client is researching law firms, it’s extremely easy to compare different firms through online research. In a few clicks, people have access to read online reviews and attorney biographies/accolades of your firm and your competitors.
This means the client is in the driver’s seat, and it’s not enough to simply have a strong differentiating factor. Law firms need to ensure that differentiating factor is clearly communicated whenever potential clients are conducting research, which is largely going to be online.
Think about how Amazon changed consumer expectations by offering both competitive pricing and speed of delivery. Other retailers were forced to keep up in order to save their business in the increasingly challenging retail industry.
Retail isn’t the only industry facing pressure from a change in consumer expectation. As technology has enabled consumers to research legal services more thoroughly, people are becoming more price sensitive to legal services. Research shows that for more specialized, “unique” legal expertise, there is less price sensitivity. But if your firm offers legal services in a more saturated market like family law or criminal defense, price will continue to drive potential clients’ decisions on which firm to hire.
This doesn’t mean you have to be the cheapest firm in town. It just means you have to understand how your fees compare and make sure potential clients are well-informed. Transparency goes a long way, and providing fee transparency to your clients is a great way to build trust.
It also means you should look for ways to retain profit margin in an increasingly price-competitive industry. Are there things you can automate at your firm that will save time and money? Focusing on efficiencies will help ensure you’re maximizing profitability.
Law firms have long-been a business with one task; legal services. However, the emergence of technology is resulting in some firms expanding their business offerings. Many law firms are expanding to include legal technology and consulting services.
This may work better for certain areas of law. For example, law firms with business clientele may benefit from expanding their service offerings to clients. It warrants some thought for managing partners of firms who have grown their practice and could benefit from expanding into related areas. What other needs do your clients have that you may be able to help them solve?
This trend will likely lead to an increase in people who pursue “legal adjacent” careers. These are roles like project managers, compliance and risk professionals or legal operations specialists. As law firms expand their business offerings, the mix of lawyers vs non-lawyers employed by firms will shift.
Tune into a local television station and you’re likely to see a few commercials for law firms. If you spend money on TV ads for your law firm, it’s important to understand two key trends. First, 2020 is an election year, and it’s predicted to be a record year for political advertising spend. This means small businesses may get crowded out as ad space becomes a scarcity.
Secondly, traditional television viewership continues to decrease as “cord cutters” opt for streaming services. Even local news has seen sharp declines in viewership.
Does this mean law firms should cut their spending on television advertising? First, we recommend taking a hard look at how you’re spending your advertising dollars and what you can track. If TV ads are helping bring business to your firm, it may still be a good investment. But if viewership continues to decline, there may be better ways to reach your target clients, such as online advertising.
Does law firm direct mail still have a place in a world that’s increasingly digital? Do you still check your mailbox? Unlike email which can be easily deleted or filtered to an inbox you rarely see, physical mail will hit the hands of the recipient.
Think about how you check your mailbox. Chances are, you browse through the envelopes and separate them into two piles; mail that you’ll open and mail that you won’t. If your law firm can get its letter into the “open” pile, your chances of getting their business increases.
We’ve come full circle on print advertising. As consumers are bombarded with digital ads, there is something special about receiving a piece of physical mail. Most industries that engage in direct mail marketing project increased volume in the years to come.
When done right, direct mail is highly targeted and can be very cost effective, which makes it a staple in many law firms’ marketing strategies.
If there’s an industry that has struggled in the face of increased streaming use more than television, it’s radio. But local radio has evolved with the industry, and is capitalizing on the increased digital ad spending. Radio advertising can still be a viable option for law firms, as long as you’re following best practices and have a way to understand how radio advertising is affecting your firm’s business.
With radio, you don’t have the benefit of fine-tuning your targeting to reach your intended audience. That’s why it’s important to understand the demographics of the listeners for the local stations you’re considering. The demographics should closely align with your law firm’s target client.
Many law firms use radio advertising as a way to combat the competitive nature of digital advertising. There is also the advantage of trust. Loyal radio listeners often have built trust with radio personalities, so an advertisement coming from them is more influential than other forms of advertising.
If your firm has a limited budget and is looking to build a diversified marketing strategy, we still believe direct mail is the best option. Radio advertising is certainly not dead, and you may want to consider testing into it if your marketing budget allows.
Print advertising generally entails things like newspaper and magazine ads. It’s hard to justify spending money on print advertising for most types of law firms, given the decline in readership of print publications. All other things being equal, digital advertising for a criminal defense attorney will net far more business than print ads.
However, that doesn’t mean every law firm should rule it out. There are some practice areas where print advertising may make sense. If you specialize in business litigation or represent professionals like doctors, there are many trade publications that may make sense.
Print publications have also had to adapt their advertising sales models as behavior has shifted. Many offer packages that entail a combination of ad space in a print publication and on the publication’s website or e-mail distribution list. Since this can be a one-time investment, it may be worth testing to see if the one-time investment provides a lift in your business.
Outdoor advertising is more about building your brand’s presence and recognizability, and it’s often done to supplement other forms of local advertising. It’s rare that someone passes a personal injury attorney’s billboard advertisement and calls right away.
However, if a need arises in the future, someone may do online research. They perform a Google search and recognize that law firm from billboards, radio and TV ads they’ve seen. At this point, they’ve already built some familiarity, which can influence the decision to hire that firm.
This is exactly why traditional forms of advertising like billboards, buses and benches are difficult. They influence decisions, but it’s very hard to track how many cases come in because of them. In the above example, online search would typically get the “credit” for bringing that client to your firm.
Over the years, the cost of this type of advertising has gotten cheaper, especially in smaller cities and towns. Depending on the location, it does give your law firm a large reach and may make sense if you struggle with very limited brand recognizability. For example, a law firm opening a new office location may want to consider outdoor advertising as a way to generate awareness in the new market.
Change is inevitable, and law firms need to adapt accordingly. While it’s true that marketing is becoming increasingly digital (more on that in part 2 of this blog series), it doesn’t necessarily mean that traditional means of advertising are dead. It means they’re changing, and you should carefully vet how you use your firm’s marketing budget and how things like TV, radio and direct mail fit (or don’t fit) into your strategy.