According to the Federal Reserve, a recession is looming. Although recessions are a normal part of the economy, they can be devastating. Knowing when and how long the recession will last is a difficult area to predict. However, preparation is key.
Here are the top ways that trial lawyers can prepare for a recession:
A recession is when a significant decline in economic activity occurs. They can last for weeks to months to even years.
Several instances can occur during a recession including:
Unfortunately, recessions are a usual occurrence in business and the economy.
Many people are under the impression that recessions do not affect legal professionals. While the traditional law firm may appear recession-proof, that may not be the case. Although difficult to predict the results of a looming recession, industry trends point to law firms needing to be flexible. Law firms that do not differentiate themselves from competitors may experience a drop in demand.
Lawyers who do not focus on long-term goals may take the biggest hit when another recession happens. Client-centric approaches allow for predictability, better time management, cost-effectiveness, and productivity. Even larger law firms across the board will take a big financial hit if they continue to focus only on short-term strategy.
Clients are searching for niche-specific law firms. The days of offering every legal niche and hiring many partners are dwindling. Additionally, attorneys who do not join the digital revolution are most at risk in the event of an economic crash. Law firms must be digitally accessible as their reach can span well beyond word-of-mouth and referrals.
With these simple preparatory plans, lawyers can adequately prepare for the looming recession ahead:
Evaluate both your professional and personal situations. Seek out threats, errors, or issues that may arise. Questions you can ask yourself to get a contingency plan started include:
Knowing where you stand business-wise and financially is a great place to start. Assessing your current situation will pave the path to future strategies if a recession were to happen. The goal is to be prepared to protect your firm from the worst-case scenario.
Looking for new business development opportunities can float your law firm through a recession. Although your firm may take a financial hit, new business investments can fare well in the long run by bringing in new clients, new partners, and new income.
Begin looking for more business from your existing clientele. Ask for referrals and offer another consultation to check in with them and their needs. Next, build your brand using social media platforms. Spread your brand by garnering other law professionals to offer webinars and seminars.
The internet is your law firm’s best friend. It acts as a rolling digital billboard that does not require consistent maintenance. Your website is considered the first impression of your law firm. Ensure content is fresh, structured for SEO (Search Engine Optimization), and relevant to current standards.
Market your practice online. If you need assistance, you can learn the basics of online marketing and business development from various free sources such as Google Business and Yahoo! Local. Research your competitors and their strategies to assess how you can better market your firm. The more client-centric, the more likely you will land the client and garner their loyalty—even through a recession.
One of the most important things you can do is protect your cash flow. Without a consistent inflow of cash, you and your law firm may be in trouble. Review and cut any unnecessary expenses. Then use resources such as Level Case Financing to fund your trials so you don’t have to. By utilizing Level Financing, you can have access to capital to invest in and grow your law firm even during a recession. And, with Level Insurance, you can easily be reimbursed and have case expenses covered in the case of trial loss.
Look for new clients to replenish any loss of clientele. Your main purpose is to increase your profitability whilst maintaining great interpersonal attorney-client relationships for the long run.
Thousands of law firms exist. It is in your best interest to separate your law practice from others. Diversifying your law firm’s offerings can help reduce the risks for your business if a recession happens.
Reach wider audiences whilst sharing your portfolio and legal strengths. The more you can showcase your credibility and authority in your respective niche, the better. Don’t think of this as becoming a one-stop shop law firm, but rather by expanding within your niche.
Recessions can be devastating to business, so now is the time to invest in yourself and your law firm. Economic opportunities can arise even during a downturn. Keep your eyes open for these opportunities as they can help you increase client acquisitions and increase your firm’s growth.
Pause any new projects and larger overhead expenses until the recession is over. Keep your money safe by reinvesting into keeping the firm afloat. Cut additional overhead by focusing on the most important day-to-day operations of your business.
Protecting your investments helps your legal business grow. LevelEsq prides itself in protecting your law firm’s investments by offering case financing and insurance. This will allow you to keep more money for your firm during a recession by financing your trial costs at a net cost of 1%.