When back in March the pandemic hit and governments across the world imposed lockdowns or work from home orders, many law firms quickly announced austerity measures, and braced for the impact to come. To everyone’s surprise that impact did not come and many law firms booked similar or better results compared to the same period the year before.
The reasons behind this are mixed. Associates working from home made on average more billable hours. This was in part caused by having fewer distractions and in part by the fear of being made redundant. Secondly the share of partner hours increased, which drove up the average rate. Thirdly in March there was still an existing portfolio of ongoing matters and new matters in the pipeline. On top of that came a flurry of Covid-19 related questions and matters. In short: without too much business development effort, law firms managed to perform well during the past 6 months.
Menacing clouds ahead
There once was a time when lawyers were not allowed to solicit for work and just had to wait until a client came with a new matter. These days are well behind us, but still developing new business feels weird and uncomfortable to many lawyers. Today many law firm partners have ‘inherited’ at least part of their practice from a partner that retired. This especially true for the baby boomer generation.
As is comes to practice development there is a distinction to be made between the older established partners and the young and coming partners. The established partners have built their practice on the partners before them, have a large network and a recognized reputation in the market. An ALM analysis in 2018 found that about half of all partners in the 200 largest law firms in the US came from this category.
So what about the other half? Building a book of business is much harder these days as every young partner can confirm. The baby boomers tend to hold on to power and are far less generous in sharing and/or transferring their clients and introducing young partners into the relationship. Having to start from scratch is hard in normal times, it becomes even harder in times of recession. As the pipeline of work is slowly drying up, and clients get more cautious in hiring lawyers, the younger partners are starting to feel the pressure.
What we normally did
In order to build a practice, potential clients at a basic level need to know that you are there. Being a partner in a reputable law firm helps, as there will be an existing network and quality reputation, but it is not enough. Young partners must build a network of their own. This involves attending networking events, business lunches and personal introductions. None of which are realistic options right now.
Worldwide all but a few in-person networking events have been cancelled. There will be no conferences and no client entertainment. During the past six months we have tried to replace these by webinars, but despite the initial enthusiasm the general conclusion is that clients are now tired of webinars and do not want more.
So how to build a book of business if there are no in-person events and virtual substitutes are not the answer? This is the million dollar question for lawyers. In the first few weeks after the summer holidays many law firms have held internal meetings on how to organize their business development and marketing over the months/year to come. No need explaining that these will be tough meetings as partners do not like business development in normal times, let alone that they will have a myriad of innovative ideas to adapt to the extraordinary times.
Opportunities, opportunities!
There is comfort in knowing that also your competitors are struggling to come up with innovative and effective methods of business development in times of pandemic. It reminds me of the classic joke from Billy Connolly about the two camera men filming a lion. The lion sees the two camera men and proceeds to chase after them. One camera man stops and puts on a pair of running shoes. His colleague tells him “You will never outrun the lion in those”. He replied, “I don’t need to outrun the lion, I just need to outrun you!!”.
In a situation where everyone is on the brink of panic and clients are pushing the reset button, you just need to be a tiny bit smarter than your competitor to be much more successful. The current crisis creates great opportunities for those lawyers and law firms that succeed best in engaging with clients and attracting new business. It does not matter so much who was stronger in the past, as it is about who will be smarter in the future.
At TGO Consulting, innovation is our hallmark. If anything, we have the ability to come up with new, effective and innovative solutions. We understand the business of law, like few others. If you are looking for inspiration and new business development ideas, contact us right now. On this aspect we can only accept one client in a certain market, so be quick.