New Survey: Client Acquisition is the Biggest Challenge Small Law Firms Face
Most attorneys who practice on their own or at a small firm will tell you they love the freedom and close relationships with their clients. Many lawyers leave big firms specifically for these reasons. But every rose has a thorn, and at small firms, that thorn is having to be a business owner in addition to being a lawyer.
Thomson Reuters’ annual State of U.S. Small Law Firm Survey shows that the majority of small and solo firms face the same challenges that all small businesses do, but they aren’t always handled successfully. Whether due to a lack of support, knowledge or time, many lawyers said they had no plans in place to deal with their most significant challenges. For example, 75 percent of respondents said that acquiring new clients was a “moderate or significant challenge,” yet less than 30 percent of firms said they’d done something in the last year to address it. Pretty alarming.
Finding solutions to these challenges can feel overwhelming. But to improve your small firm and ensure its long-term success, you have to start with a plan (even a small one) and work from there. To get your wheels turning, here are three common challenges from the survey and tips to handle them.
- Finding new clients
Survey respondents ranked client acquisition as their number one challenge, and it’s not hard to see why: there’s no foolproof formula for success. If this is a challenge for your firm, start by analyzing where your current clients are coming from. If most of your clients find you through Google but you haven’t gotten any clients by speaking at conferences, it’s probably best to invest in SEO and improving your Google ranking rather than filling your calendar with conferences.
- Spending too much time on administration
This was the second most common challenge, with 70 percent of attorneys saying it was a problem for their firm and less than half doing anything to address it. Many firms are woefully behind on the technology front, which plays a big part in time spent on administration. Technology can help with transcription and document drafting, practice management and digital note-taking. Just ensuring that your firm has the most up-to-date software can make things run more smoothly. Upgrading your technology may be a financial and time investment up front, but it really does make a difference in the long run.
- Clients asking for more for less
59 percent said they struggle with clients demanding lower costs, yet only 42 percent had a plan in place to deal with it. You may be able to keep costs to clients in check (or at least prevent them from increasing) if you streamline your administrative tasks by outsourcing them, investing in technology or simply cutting or reducing anything unnecessary. Also, the problem might not be that your costs are too high, but that your clients don’t recognize your value—in fact, 56 percent of survey respondents said they struggle with this. If clients aren’t seeing your worth, it may be time to adjust how you think and speak about your firm and, therefore, tweak your marketing plan.