Recently, we have worked with several successful law firms interested in protecting their home turf in the face of dominant regional law firms that are expanding into their areas aggressively looking for clients. We are seeing this trend with personal injury law firms as well as firms in other practice areas. A recent Altman Weil study also highlights this growth and consolidation of these large firms.
Clearly, the large law firms have several advantages that give the smaller, boutique firms reason for concern. In many cases, the biggest concern is in the battle for new clients. The large firms often have extremely large marketing budgets, and can afford television advertising, billboards, phone book covers, and aggressive business development efforts.
In the face of this aggressive marketing, the smaller, local firms often worry about how they will thrive with the new competition, and in some cases they concede to the larger firm without fighting back. And unfortunately, many of these smaller firms don’t realize that they do indeed have competitive differentiators against these firms. Just a few of these differentiators are below:
- Personal Service- Ok, this one is easy. In smaller firms, clients are typically handled by a partner or shareholder rather than an associate or a paralegal. To many clients, especially those with serious cases, this is very important. To put some perspective on this issue, imagine if your primary contact with your accountant, broker, or doctor was through their staff.
- Deep knowledge in specific sub-practice areas– In many situations, the large firms have wide breadth of knowledge, but little depth in any one specific sub-practice area. It’s the old saw “Jack-of-all-Trades, Master-of-none.” They have grown either by selling additional services to current clients or by economically handling general issues. In contrast, smaller firms often build their business around a narrowly defined area of law- such as accidents resulting in catastrophic brain injuries, SEC Arbitration, etc. This specialization should be highlighted and branded. It provides for a differentiated message that resonates both with prospective clients as well as other attorneys who may refer a case. It is an easy way to build a reputation and differentiation.
- Flexibility– Compare the difficulty that a large ocean liner has in making a course correction with that of a smaller pleasure boat. This analogy holds true when comparing law firms and their ability to change. In many big firms, bureaucracy, overhead constraints and the inability to get shareholders together to make decisions cause these powerful firms to be slow to react. Smaller firms, on the other hand should use their agility to their advantage. Whether pertaining to potential new practice areas, changes in law, marketing opportunities or technological trends, the smaller firms can take advantage of these trends to grow both their top line revenues and bottom line profits.
- Web presence– Google doesn’t care how big your law firm is when ranking your website. Smaller law firms have the same ability to create a high-impact website that is both found and positively ranked by the search engines and that is read by prospective clients. Given some of the issues highlighted above, smaller firms also have better opportunities to create high impact blogs, take advantage of the latest web trends and use the web as a lead generator, rather than just a firm brochure.
Large law firms clearly have some inherent advantages over smaller firms. But solo and smaller firms can compete and succeed through strategic use of their strengths. Remember, Goliath doesn’t always win.