This blog post, which is my first on COVID-19 in a while, is an update on our observations about how the business of law firms has changed with a focus on how solo practitioners and small firm owners are thinking about their online marketing.
The information in this post is based on our conversations with prospective and current LawLytics customers about their law practices, as well as on directly observable information about the website traffic and behavior of consumers of legal services since the COVID-19 shutdowns began.
COVID-19 is likely to widen the chasm between attorneys with “engage and invest” and “bet and forget” legal marketing mentalities.
As a starting point, there have always been solo practitioners and small firms that thrive while others, owned by lawyers of equal background and intelligence, have struggled. Some lawyers take the time to make educated choices about their business and marketing. These lawyers make investments in marketing rather than bets, and the results are consistently better than the results achieved by lawyers who focus on the practice of law and leave business to chance.
The COVID-19 crisis has accelerated the chasm between the outlooks reported by those who make investments vs. those who bet. And it’s causing an accelerated shift in attitude about legal marketing from “bet and forget” to “engage and invest.” This acceleration appears likely to widen the chasm in performance between the cohorts as the COVID-19-altered world solidifies into a new and likely permanent law business reality.
Exogenous market and political forces beyond lawyers’ control have impacted different practice areas and locations at different times as courts and businesses toggled between closed and open, and as protests, riots and political uncertainty dominated the news.
With so many causes of potential law practice distress or failure, there is also an abundance of opportunity directly related to how attorneys approach the situation. Some law firm owners are proactively securing their futures, likely at the expense of their passive cohorts.
The “hunker down” vs. “seek opportunities” mindset.
As law offices physically shuttered and firms began working from home, we saw two very different approaches from law firm owners.
- Hunker down and weather the storm.
- Seek out opportunities.
When the situation started looking economically ominous, and I started blogging about COVID-19 and legal marketing to help attorneys navigate the uncertainty. I shared some thoughts about recession-proofing a law firm as well as the legal marketing mentality that works through booms and busts.
In general both the “storm hunkers” and the “opportunity seekers” reported decreases in revenue between March and the end of May 2020 (June and July were mixed due to factors that we’re still analyzing and that will be the subject of another post). The web data in almost all practice areas and locations tracks with this and shows an obvious correlation between web activity and law firm revenue.
Lawyers are rethinking what expenses are necessary and rapidly moving towards greater efficiency and sustainability.
Despite mild concerns with revenue declines, attorneys reported greater concern with the efficacy of ongoing expenses. While lawyers remain eager to invest in their businesses, the economic uncertainty is prompting what I believe is much healthier scrutiny of each expense.
Specifically, lawyers are questioning two significant categories:
- Office expenses (rent, utilities, insurance)
- Advertising expenses (agencies, ad spends, directory listings)
While lawyers view expenses like payroll, E&O insurance, and technology infrastructure as necessary, the physical office and advertising expenses are now subject to increased and justifiable cost-benefit analysis.
Forced to work from home and utilize the phone and Zoom for client meetings, many lawyers are realizing that their physical offices are not as necessary as they once thought. They are starting to ask the question:
What if most of my clients and potential clients would tolerate (or even prefer) remote meetings to office meetings going forward?
Lawyers are scrutinizing ad spend with marketing agencies and legal directories and looking for proof of ROI.
Many lawyers have written checks to marketing agencies and directories for years despite not knowing the true return on investment. Ineffective or inefficient performance remained hidden to some lawyers until COVID-19. The crisis has provided some attorneys the time and motivation to trace the contribution of marketing expenses to bottom line profits. Here’s what they are saying:
- Many are finding that the returns don’t justify the expense.
- Many are realizing that their agencies and directory ads are black boxes — that there is simply not enough transparency provided by the vendors for the lawyers to make a determination one way or another. The report the vendors are either unwilling on unable to add clarity.
- A few believe there is a nexus between money spent and revenue, though they have trouble backing it up with data.
None of the above three groups report feeling secure that the money they are spending on agencies and directories now will contribute in any way to the creation of future reliable and sustainable revenue. In other words, even those who report a belief they are getting a return on investment today are nervous about relying on it going forwards and believe that any benefits they are getting will cease when they stop paying.
This is consistent with what I noticed in my own law practice. It’s what I’ve been telling lawyers for years, and what I recently articulated about marketing agencies and legal directories in the context of COVID-19.
The pre-crisis status quo is unlikely to return, but the new reality is full of opportunities for attorneys who are looking.
It’s clear to me that the pre-crisis status quo will not return for the legal profession. The forces that are in motion will, I believe, will permanently disadvantage law firms that don’t embrace change and take control of all aspects of their practices, including their websites.
The new reality is full of fresh opportunities for attorneys who are willing to adapt and evolve. I’ll talk more about those opportunities in other posts. For attorneys who aren’t willing to embrace change and take control within practices that they own, there are still a few viable paths forward as well as some exit strategies that I’ll discuss in another post.
If you’d like to see how safe and easy it is to take control of your law firm’s website and use it to secure your firm’s future, I want to invite you to schedule an interactive demo of LawLytics. It takes about 20 minutes, and we guide you as you control it through your web browser. Somebody from my team will guide you through the demo and show you how it works, and will not try to sell you anything. And if you want to know exactly what your price would be before requesting the 20-minute demo, you can calculate your price in a minute or less.