How to be a successful and sustainable small/medium law firm
Hawkins Parnell & Young, New York City
After introductory remarks and introduction of the panellists by Francesco Dialti, Foutoun Hajjar began with the definitions of law firm size (a small firm would be anywhere from 2-15 attorneys and a medium firm from 16-350 attorneys) and the issues that would be covered by the session.
Dragan Dameski presented the results from the survey that involved attorneys from primarily small and medium-sized firms around the world. Some of the takeaways from this survey were:
- Client satisfaction ranked highest among the respondents as key to performance, success and sustainability of their firms, among the choices of use of legal technology, client satisfaction, innovation, development of new business, people management, professionalism/self-development, competition from larger firms, knowledge management, crisis management and adaptability.
- In terms of retaining clients, quality of services and the implementation of a customer relationship management strategy and an innovative/differentiated approach were the most important factors.
- For developing new business, quality of services was deemed most important, along with the creation of a business development strategy and an innovative approach.
- In order to retain talent, professionalism/self-development/firm culture ranked as most important, followed by people management. Teamwork and learning, closely followed by leadership/mentoring, was the model best suited to retain talent. Interestingly, attention to mental health issues ranked low, perhaps because there is more a life-work balance at small and medium-sized firms.
- What was somewhat surprising was the common theme among the responses that small and medium law firms did not factor competition from larger firms as a significant factor. These small and medium firms are not as afraid of the big firms and are still able to compete in the world of AI and technology.
Moray McLaren asked what other terms can be used to describe a ‘small firm’ (perhaps ‘specialised’?) and challenged the panel to present the proposition for this type of firm.
Zeina Obeid, speaking on behalf of a Lebanese firm of fewer than 20 attorneys and founded and led by a woman, described the key advantage of her firm as the partners’ control over the business in terms of finance, management and human resources, which allows more adaptability. A small size also fosters loyalty and a willingness to be part of the firm’s success story. The relative disadvantage was that there is a heavier burden for partners in terms of providing client services, marketing for the firm and smoothly running the operations of the firm.
Andrea Puccio, as the founder and sole partner of a criminal practice firm in Italy, spoke about the flexibility and simplicity of a small or boutique firm structure. There are eight professionals and two secretaries in his firm, and there is less hierarchy, which allows for quicker response and adaptability. The disadvantage, according to him, was the challenge of remaining healthy, especially during these times, because there are no substitutes.
Moray asked Andrea about decision-making: do other people in his firm have a seat at the table and make their voices heard? Andrea responded that he feels that this can be a new model of law firm and have a more collaborative approach, especially among younger attorneys who are still growing.
Fabíola Cavalcanti, as the attorney from a big firm in Brazil (1,000+ attorneys) but running an office of eight attorneys in Rio de Janeiro, said that clients are demanding more specialisation, although their attorneys need to continue to be more generalist because they need to know everything about their clients, whether it’s data protection, environmental, litigation etc.
Marx Ikongbeh, as a practitioner in Lagos, Nigeria, the biggest legal market in Africa, noted that there were two models of law firms: one founded by attorneys of specialised experience, who continue to build on what they already know; and the other similar to a startup, which is typically founded by attorneys who are fairly new out of law school and develop a client base with a generalised approach. He pitches to potential clients with the promise of a personal touch and faster lines of communication.
As the founder of a New York City-based legal marketing agency, Deborah Farone sees three main disadvantages of small and medium firms: 1) the lack of a marketing staff; 2) the lack of international branding; and 3) the lack of reach and capability in doing legal work. On the other hand, such firms are nimbler, do not have to navigate the bureaucracy and know their partners and clients much more intimately. Larger firms have to concentrate more on cohesiveness and culture, which comes more naturally to smaller firms. There needs to be a strategic plan that does not necessarily need to be lengthy, but have to set out ‘smart’ goals that are specific, measurable, attainable, relevant and time-based. Social media can be incredibly powerful, especially in times like a pandemic.
Danielle Vidigal runs a marketing firm that issues legal directories and rankings. She believes that such directories are particularly relevant for small firms and spotlights their work. With regard to the question of how can small and medium firms compete against bigger competition, she believes that directories really work as a way to attract clients. She advises for small firms to improve their rankings, they need to get quality feedback from their clients and continue to network.
For these firms, Deborah identified four items that can be done:
- Create a system that tracks where business is coming from;
- Develop your network and referral base by asking the referral group what else you can do to stay involved and rotate the partners so that they all get an opportunity to do work;
- Use dollars to narrow your broadcast and determine who would you rather serve, as opposed to just casting a large net; and
- Create a system to stay in touch with people, e.g., each partner is in charge of five prospects.