The downturn in the economy that is affecting all businesses has not spared law firms. Like all other businesses, law firms have been forced to cope with fewer and thriftier clients. Specifically, law firms have had to deal with sharp reductions in transactional and real estate work, large increases in litigation and bankruptcy matters, and clients who are often unable to pay for legal services. Providing legal services to clients that may declare bankruptcy in the near future has become commonplace.
Law firms have responded to these trying times with various strategies. Many law firms have primarily focused on reducing costs through hiring and compensation freezes, recruiting cutbacks, and event cancellations. Other firms have started to transition transactional attorneys to bankruptcy or litigation work.
Not all strategies, however, are created equal. The reduction of costs is always a worthwhile aim, but when conducted without strategic vision, it can leave a firm with frustrated employees and choke off any avenue for organic growth. The transfer of attorneys to other divisions certainly creates revenue for the firm by keeping otherwise inactive attorneys productive, but the work product can suffer. For example, transactional attorneys will not necessarily provide the highest level of service to a client with litigation or bankruptcy needs.
Firms that take a different approach may be best suited to not only survive the current economic difficulties, but to emerge on the other side as stronger firms. This approach is simple: Focus on the client. While all law firms profess to keep the client’s interest at heart, in these times, paying more than lip service to that ideal is the key to success. Now more than ever, many clients are not able to afford full service legal representation. Obviously, providing the highest quality legal service to the client is always the first priority, but providing value should be a close second. Focusing on the client and its specific needs allows attorneys to add value by identifying and zeroing in on the particular requirements of that client. Once the particular needs are identified, it is simple to eliminate any superfluous services that do not add value, and to concentrate only on the services that really move the client closer to its ultimate goal. This focus keeps the representation more efficient, less costly, and will ensure that the client is satisfied with all of the legal services provided.
One major example of how an increased focus on the client is more important than ever is the looming prospect of bankruptcy. Recognizing that a bankruptcy could be on the horizon for a client is very important to shaping any legal strategy. Most importantly, a bankruptcy provides unique legal challenges and opportunities that need to be addressed in a timely manner. Identifying the possibility for a bankruptcy, and when it might occur, allows the lawyer to properly gauge which long-term strategies will be ineffective, and how to use the limited time and resources as efficiently as possible. Moreover, a possible bankruptcy underlines the client’s absolute necessity for value from legal services. Particular attention from the attorney at the outset of a representation can identify a possible bankruptcy, shape the representation, and let the law firm know which services will be most valuable to the client under the circumstances.
With the need to adjust to the current economic difficulties paramount for all law firms, smaller firms may be the best equipped. Like the tugboat and the ocean liner, smaller firms are more nimble and able to focus resources to needed areas more quickly than larger firms. Most importantly, small firms often provide a higher level of personal attention and a greater focus on the client’s needs. Focusing on the client is the best way to ensure success for both the law firm and the client.
Charles J. Morrow also contributed to this article. He is an associate at Galbut & Galbut. He can be reached at email@example.com.