This has been a year of changes and unexpected turns, resulting in a financial crisis for a huge percentage of businesses in America. The restaurant and hospitality industry are both operating at an all-time low, where others, like the construction and real estate market, are thriving.
As a lawyer, you’re at an advantage. Even in the midst of shut-downs and closures, litigation and court procedures are still needed. But even though your work may be an essential service, that doesn’t mean your bottom line won’t be affected. Follow these four steps to recession-proof your business so that you can weather these bumpy times.
Change up your day-to-day schedule. Review your P&L statement
Part of preparing for financial belt-tightening is addressing the nitty-gritty details of your budget. Yes, it might be less exciting than adopting new strategic plans, but you really need to know how you’re spending money to make smart decisions. This, of course, goes for good economic times as well as bad ones.
To do this, you can work closely with your bookkeeper or accountant to review your profit and loss statements. Pinpoint where you’ve got inefficiencies and redundancies. Where is your money – and isn’t – being put to good use?
If you have personnel, they’re going to be your biggest expense, followed by occupancy expenses. Yes, firms are working hard to keep staff working right now, but given the cost of this, consider how you can optimize your staffing costs. Can some work be outsourced to contractors at a better price point? This can free up lawyers to take on more clients and increase time spent on billable hours.
If you haven’t already, prioritizing remote working. Not only does this support community health during COVID-19, but it also can drastically improve your bottom line.
Reevaluate the client experience
Just as therapists and psychiatrists provide telehealth services, you can streamline by providing virtual consultations and services instead of relying on costlier in-person alternatives. You can follow up with your client via email, video conference, or phone call and only meet when necessary.
Another option is to move to a retainer-based policy. This can help manage client accounts and make sure payments are being made on time, reducing the likelihood of outstanding balances cutting into your operating income.
Review your marketing strategy
What types of services does your firm provide? Where is your target audience hanging out? Nurture your relationships with past, current, and potential clients through a consistent schedule of follow-ups and check-ins.
Your LinkedIn profile is a valuable marketing tool that many lawyers underutilize. But don’t hesitate to build up your presence on Instagram, Facebook, or Twitter if your audience is there. Be open to reevaluating past practices to adopt more effective strategies, especially if it means your firm will benefit in the long-run.
Use those CLEs to hone in on new skills and diversify what you can offer
Now could be a great time to begin to practice bankruptcy, cybersecurity, and privacy law. Take virtual classes or attend an online seminar that focuses on the new and upcoming areas of law and pick one that interests you. Niche down and become extremely knowledgeable in new practice areas and deliver exceptional work.
Whether you’ve built a successful firm from the ground up or are just graduating and trying to decide if you want to join a firm or start your own private practice, you can implement these four steps. Nothing is ever set in stone.
Being flexible and ready to move in another direction should be something that you anticipate in business on a good day and even more so in the middle of a recession. Make a plan before you have to implement it, giving you time to build through trial and error.