To say that the COVID-19 pandemic caused uncertainty and economic strife all over the world in 2020 would be an understatement. Law firms and the legal industry as a whole were not immune to these effects, seeing declines in revenue and staffing overall. That’s overall, but not all. To the surprise of many, though maybe not to these firms themselves, there was a significant number of firms that increased revenue over 20% in 2020, according to the High Growth Study 2021 conducted by the Hinge Institute.
Many of these firms that were able to grow their revenue and increase profitability during the pandemic had common marketing strategies and operation processes. Read below to find out how high growth firms beat the odds when so many businesses and industries struggled to make it through 2020. In the information below, you’ll also notice several recurring themes throughout the High Growth Study:
All these topics are associated with high growth firms that increased their growth and profitability in 2020—despite the pandemic.
The High Growth Study 2021 included 1,300 firms from all continents, with the legal industry represented by:
Year Over Year Trends: Embracing Technology & Marketing
For firms, we continue to see technology and marketing play key roles. While businesses in other industries have relied on technology and marketing for decades, the legal industry was slower to adopt technology, such as automation and marketing strategies, for increasing and tracking business leads. COVID-19 helped speed up this process in 2020.
Comparing Legal to Other Industries: Legal Is Most Profitable
For all professional services firms, COVID-19 impacted profitability and growth. But the legal industry fared better than the others, leading in profitability and seeing one in four law firms experience high growth. With the pandemic all but eliminating face-to-face marketing, law firms refocused and accelerated marketing in digital areas, such as email marketing, networking on social media, and advertising (like targeted online banners). The law firms that focused digital lead-gen efforts from these sources successfully experienced less of a COVID-driven financial impact than other industries.
High Growth Firms: Growth During COVID-19
As mentioned earlier, law firms were slower to adopt digital business marketing practices. But firms that had adopted implementing marketing plans and business growth strategies not only survived better in 2020 during the pandemic, but they actually thrived, seeing as much as 26% growth. These firms increased marketing spend and were more agile and able to react to economic changes, switching marketing efforts to digital platforms, making these efforts more targeted to specific audiences and pulling in more digital leads.
High Growth Firms: Characteristics
Making More Money
High growth firms come in all sizes, and unsurprisingly are also highly profitable. Though mid-size firms are more likely to experience rapid growth.
Spending More Money
High growth firms weren’t afraid to spend money. These firms spent money to conduct research and increased their advertising budget to boost digital leads during the pandemic. Marketing intelligence lowers risk and uncertainty, while digital leads allow firms to target their audience based on specific needs and interests, resulting in higher quality leads. Because of this, even though high growth firms spent more marketing dollars, they still became more profitable.
Overcoming Business Challenges
When it comes to addressing business challenges, high growth firms focus on areas that relate to having the right people at the firm with the right skillsets, as well as firm competition. While no-growth firms focus on catching up to automation, reacting to unpredictability in the marketplace and client demands.
High Growth Firms: Impact of COVID-19
When COVID-19 impacted the global economy, high growth law firms were impacted just as every other industry was impacted. But having the right technology and processes in place allowed these firms to more smoothly adjust their office configurations and marketing spend.
Conclusion: How to Become a High Growth Firm
As the High Growth Study 2021 confirms, there’s no secret to becoming a high growth firm and it’s not by chance or luck. It takes a willingness to embrace technology and to accept the idea that law firms should prioritize marketing and implement marketing strategies just as any other business in any other industry. Based on actual results, here’s where to begin:
Understand how your target audience thinks and behaves
In a world marked by unpredictability and rapidly changing buyer behavior (which was the third most anticipated challenge for law firms), research provides powerful insights into target audiences’ key issues and evolving concerns.
Put in the effort
The research clearly shows that high growth and high profitability are a viable option in any professional services industry, including legal—and for any size firm.
It’s time to go digital
Digital marketing is a mainstay for modern professional services and has a proven, high return on investment.
Demonstrate your relevance and expertise
Buyers (clients) are looking for firms that understand their industry and business issues and have the expertise to solve their problem. Making your expertise visible works.
Be flexible with working remotely
The best talent is likely to demand a flexible, remote (or hybrid) work environment.
Use a holistic approach to marketing
Marketing for professional services involves focused efforts, true insights, and the right skillsets all working cohesively and within a well-planned, thoughtful strategy.