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Big Law firms are losing market share at an accelerating page to midsize and boutique law practices and here’s why:
Mega law firms follow a defense-based marketing and business development strategy while specialty and regional practices chip away at the Big Law client roster with a proactive approach.
This difference is more fundamental than varied marketing plans, it’s something ingrained into Big Law and I think, absent a tectonic change of strategy, will be a primary factor in the demise of many former powerhouses.
It comes down to the difference between a Drive to Win and a Drive Not to Lose.
The idea is supported by varied sources from statistical sports analysis to neuroscience all of which make a stong case for a gain-oriented mindset in all aspects of life.
When a business is changing and conditions are shifting, those who take calculated, but nonetheless significant, risks are always one step ahead of those who merely attempt to prevent disaster.
Where others see threats, the gain-oriented mind sees opportunities, and after many years in the business of promoting lawyers and law firm brands, I can clearly see that we are living in such a moment in American law today.
While the top national and global firms struggle to maintain a revenue flow to sustain their massive structures, new players come on to the scene, with a thirst for victory and much less to lose. Because the amount of legal business available is generally not growing, there is a constant hustle to get a bigger piece of the pie.
Last January, the annual forecast by Citi’s Private Bank division, forecast that middle-market firms that attempt to be “all things to all clients” would not fare well in 2018, but midsize firms with strong brands and niche boutiques would thrive. As we approach the third quarter, it cannot escape any savvy observer that time has only proved them right – certainly in law.
Elite Lawyer Management represents remarkable individual lawyers, small and midsize practices, and specialty practices at mega legal firms, and I have seen time and again how the most proactive among them beat the traditional leaders, those who are just coasting on their reputation and good old boy contacts.
To the stodgiest, a massive branding campaign might culminate in adding the word "aggressive" to their website. Meanwhile, the hottest firms, the ones who allow themselves to take risks, are branding, promoting, and publicizing truly innovative individual attorneys and specialty practices, the amalgam of which make up the firm.
As traditional risk-averse mega players merge with smaller or boutique groups to shore up their aging brands, proactive ones are amping up revenues in every possible way by hustling for major clients and offering them a package attuned to the times.
At the same time midsize firms, typically regional ones, are taking business away from the mega firms by truly hustling, and a handful of boutique firms are crushing the mega firms, one niche specialty at a time.
But you don’t need to take my word for it.
An April 2018 report by the Economist Intelligence Unit clearly established that global companies with a turnover of over $1 billion are currently spending under 50 percent of their external legal budgets on large law firms.
28 percent of that massive pie is now in the hands of specialist firms, with freelancers and online platforms taking 18 percent. These multinational corporations cited cost as the biggest challenge when dealing with law firms.
As for why they are choosing small and medium-sized firms, in their own words, the answer is a “stronger value proposition.” Over half of survey respondents agreed on that particular point.
In today’s market, profits go to the smart lawyers who brand well and hustle, the ones who focus on offering these strong value propositions.
I know this first-hand, because I see it every day with my clients.
What usually happens is we are contacted by an attorney who is among the best in their specialty, be it energy, insurance, criminal defense or family law, securities or mergers and acquisitions, and maybe they are absolutely top-tier, but the public needs a reminder of that, so, we showcase them in a way that people will hire them because nobody knows more or is more up-to-date about their field, because they have a track record of multi-million-dollar settlements - multi-billion in the case of some of our clients - and because you cannot read the news or turn on the television without seeing them speak about their field of expertise.
How do we achieve this? We understand the market, we understand our clients, and we put their greatest virtues and talents in the spotlight, every chance we get.
When there are no chances, we simply create them; that’s what makes the Elite Lawyer Management team special.
The historic brand value or standing of a massive firm is no longer enough to bring in the biggest, most promising clients. That is why we prefer to represent a limited number of attorneys. We want to represent the hottest and most successful lawyer in each niche and region, and we don’t work for people who may be competing in the same market.
This requires risk and a gain-oriented mindset.
Again, it’s drive to win vs drive not to lose.
We pick winners, and we take them to the finish line.
If a firm comes to ELM, telling us they know other firms are not better than theirs, but they are losing ground, the first thing we do is change that mindset, from, “What can we do to avoid losing,” to “What will it take to be Number One?”
What’s the takeaway?
The drive to win trumps a drive not to lose in elite legal marketing circles – every time.
Jay Jessup, a bestselling author on the topic of branding and public relations, founded and leads Elite Lawyer Management, managing agents and PR reps for America’s best lawyers and law firms. Connect [hidden email]