Legal Marketing 101

Become a Niche Law Practice Ninja: Step 1

April 08, 2024 Rosen Advertising Season 3 Episode 12
Become a Niche Law Practice Ninja: Step 1
Legal Marketing 101
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Legal Marketing 101
Become a Niche Law Practice Ninja: Step 1
Apr 08, 2024 Season 3 Episode 12
Rosen Advertising

Narrow Down to Scale Up: Maximizing Law Firm Profitability

Join our host, Toby Rosen, as we unravel the myth that more is always better. Learn how honing in on a particular practice area or process can transform your firm into a powerhouse without the unnecessary sprawl that often spells doom for ambitious practices.

This method isn’t merely theoretical; it’s a practical blueprint for those who want to lead, not bleed, in today’s competitive legal market. By spotlighting high-profit services and using recent successes as a roadmap, we show you how to identify and scale the most lucrative aspects of your practice.

Visit: Legal Marketing 101 Youtube

For more, visit rosenadvertising.com

Brought to you by: ThumbsUp Survey

Support the Show.

Show Notes Transcript Chapter Markers

Narrow Down to Scale Up: Maximizing Law Firm Profitability

Join our host, Toby Rosen, as we unravel the myth that more is always better. Learn how honing in on a particular practice area or process can transform your firm into a powerhouse without the unnecessary sprawl that often spells doom for ambitious practices.

This method isn’t merely theoretical; it’s a practical blueprint for those who want to lead, not bleed, in today’s competitive legal market. By spotlighting high-profit services and using recent successes as a roadmap, we show you how to identify and scale the most lucrative aspects of your practice.

Visit: Legal Marketing 101 Youtube

For more, visit rosenadvertising.com

Brought to you by: ThumbsUp Survey

Support the Show.

Speaker 1:

This episode of Legal Marketing 101 is brought to you by Thumbs Up Survey. Build better online surveys faster with Thumbs Up Survey Mention Legal Marketing 101 when you request access to the beta at thumbsupsurveycom to get access to features and discounts first. Thank you to our partners at thumbsupsurveycom. Welcome to Legal Marketing 101. I'm Toby Rosen.

Speaker 1:

Imagine this pushing against the market, expanding your territory and your budget bit by bit, little by little, hoping to carve out a larger slice of the proverbial pie. It's kind of like the conventional war version of marketing. Our soldiers advance step by step, yard by yard, and slowly expand our kingdoms. You see this with big corporations, but you also see it with law firms across a pretty large spectrum of practice areas and sizes of law firms, and I think that a lot of you actually really like this idea. You start on your block and you gradually conquer your city, your county and maybe even your state. For big national law firms, this is usually how we see things organized. They start in one city and they slowly expand state by state. Perhaps they eventually have a dozen practice areas and they have dozens of lawyers focusing on each practice area in each city and each state in which they serve clients.

Speaker 1:

It's time we had a frank conversation about this force of will approach, because, while most of you have spent your career seeing lawyers get rich and sometimes famous from this strategy, it's really just not all it's cracked up to be. Especially right now, in the process of expanding your territory, you're going to spend some money and time and you'll probably expend some staff in order to get where you want to go. If you're offering divorce services or real estate services, or immigration or bankruptcy or elder law, whatever it is, you're going to spread your resources out over all of those practice areas. And then, when you want to expand your territory, you're going to spread your resources even thinner within each of those practice areas so you can execute your attrition marketing strategy. And at the end of this, there are essentially three outcomes. Outcome number one is that you're successful, your business runs itself and it continues to expand constantly. That's pretty unlikely, if not probably impossible. Outcome number two is that you become enough of a nuisance to a larger firm in your area or in the country that they're effectively forced to buy you out. We can call that sort of the Silicon Valley or the Instagram outcome. This is also very unlikely, but it's slightly more likely than option number one, let's say. Option number three, though, is that you slowly, painfully, eventually go out of business. Your marketing collapses, your staff leaves and you'll be applying for a job at the same firm that would have offered you a buyout in option number two. But then there's also option number 3A, which is basically the same as option number three, but the going out of business portion of that is extended until your retirement, and then your firm is dissolved in the associate's leave for other firms. So I count that as part of option three.

Speaker 1:

I'm not saying 3A is better. This is just the trajectory of most businesses, and particularly law firms. In the case of 3A, it's not something that's related to you or to the recent development of AI or anything like that. It's just how the cycle of businesses often goes, but that doesn't mean we can't change our outcome, despite the odds that are invariably stacked against us. You see, the legal landscape, and the business landscape in general, I could say, is changing. It is becoming more competitive and more specialized. We've talked about focusing on your niche before, whether in your overall practice or simply within your marketing, but now more than ever we're coming to a crux point. Firms, big and small, are going to make significant changes to processes and to headcounts due to the rapid advancement and infiltration of AI throughout our lives and our businesses. Governments will implement it and the legal process is going to change. This isn't something that's up for debate. Even if we don't go so far as to replace our court system with some kind of all-knowing AI that determines the outcome of disputes with some kind of all-knowing AI that determines the outcome of disputes. Ai has already changed business in general and the practice of law more specifically, forever. Now picture this Instead of spreading yourself and your team too thin across too many practice areas and different types of services, what if your firm could become the recognized authority for a specific niche? What if you were the go-to expert for the type of law that you practice, either in your state or maybe even nationwide? What if, every time someone had a question about the thing that you do, they were essentially forced to pick up the phone and ask for your help?

Speaker 1:

Niching down has benefits across the board. I've talked about them on this podcast before, from simplifying your customer or client archetype to minimizing the number of advertising sources needed to reach that target client. It is undeniable that this kind of focus brings results faster and just with less effort. Technically, you're actually able to speak directly to your client rather than just generically shouting into the void. But rather than niching down to a singular practice area, there's one more step you can take that's highly, highly effective, and that's focusing in on one specific process. Perhaps that's something like trademark registrations or LLC setups or uncontested divorce, k-1 visa, whatever it is. All of these processes fall under an umbrella of a practice area, whether that's IP law or business law, family law, immigration.

Speaker 1:

But focusing in on one specific process not only just streamlines your marketing, but it streamlines everything from top to bottom. And more than streamlining in one practice area, it streamlines everything top to bottom and more than streamlining in one practice area, it streamlines everything. It streamlines internal systems, billing systems, case management systems, relationship management systems. Look, you get it. It makes everything better, and improved efficiency should lead us to increase profits, even if we aren't going to be increasing our top line as well. That's where the marketing comes in.

Speaker 1:

But before I go further at this point, you're probably asking won't I be limiting my potential client base? And sure, in theory, yes, we are limiting the number of processes we handle, so we are limiting the full potential client base, but in practice it's just very unlikely that you actually serve any significant percentage of the potential client base. I'm really sorry to put it so bluntly, but unless you're doing hundreds and hundreds of intakes per month, in most markets you're just not going to be the biggest player. What we are doing here, by limiting our client base, is again enabling focus. We'll generate stronger leads that are more likely to convert because we're speaking very directly to those potential clients. Those clients are more likely to view you as an expert off the bat because you focus specifically on the thing that they need and more often than not, that leads to an incredibly loyal client base that will provide referrals and word of mouth marketing for years to come.

Speaker 1:

So, instead of just being a lawyer, how do we become the lawyer for our specific process? Because if we can do that, the next part, where we can be the expert, that gets to go on CNN and NBC and et cetera the next part is a lot more fun and the marketing is, frankly, is a lot more fun and the marketing is, frankly, just a lot more interesting. And, of course, it's a long process and it's definitely not something we're going to cover in a single podcast episode. You're still going to be running a law firm. You're still going to be doing legal stuff, if you want to. The real change is just scaling back the work we no longer want to take, usually the stuff that's not as profitable for us, and so that's just going to be anything other than our chosen process, which I'm going to talk to you about how to choose it.

Speaker 1:

So this next step and there are many law practice management writers and podcasters and lawyers who have said this before me the next step is to just pick your niche. You'll be able to find plenty of ways to do this with a bunch of Googling, or a little bit of Googling, probably, but I'll give you my very simple system. This is the basic system I do, and this actually works for any kind of business, for your homework today. Here's what you need to do in a spreadsheet, number one, make a list of all the processes you complete. Some are going to be specific, like submitting an application for a particular visa, but some will be sort of compound processes that'll be hard to price separately, like a divorce, where there's maybe multiple forms that need to be done, or multiple specific processes with the court, and there are things like a separation or financial stuff that still needs to be dealt with. So how you define these processes is up to you, but in an ideal world you want to break them down into their components, the base components, as much as is possible.

Speaker 1:

Number two identify the cost to complete each of these processes. Tally up the software you need, the cost of your time, everything, everything that goes into that thing, except for, probably, the rent, but you'll have to decide how that factors in at some point during your budgeting. Everything that goes into completing these processes, though, put that into the cost for one unit, let's call it, and put that into your spreadsheet. Number three identify the market price for this service. And again, like number one, you can kind of decide how to define the market price for the service, but do a little bit of research, for sure Google around.

Speaker 1:

And the other really important thing here is to be honest with yourself, because, yes, what your competitors are charging matters, but the quality of your work is a factor here, and you just want to be honest with yourself about where you are in the market. If you under or overestimate things about that, the only one who loses is you Now put that number in the spreadsheet as well. And number four is calculate the profit margin for each of the services. It's pretty easy to do in a spreadsheet, but if you need the formula or instructions, you can Google it. It is really not hard, so I'm not going to go through that. Number five and this is the important part of this entire process is to pick a service and focus on that with everything. With the list you've just created, you'll instantly see where you can make more money for your time, and once you see those numbers, it should be pretty easy to figure out what your niche should be.

Speaker 1:

And yes, I did skip something here. That's pretty major, but we are going to talk about it Figuring out how worthwhile it is to sell that service by using some market research and figuring out how many potential clients there are. It is important, but we are going to cover that in a future episode. So for today, I would look at the things you already sell and use your current sales as a guide If you want to focus more on something that's high profit so you can make more money.

Speaker 1:

Focus on something you already do and that you're able to scale up and spend more money marketing that If you've sold some of this product in the last 12 months or so and it has the highest profit margin for your firm, then you can probably assume that there is a market for you to ramp up the sales there a little bit. I wouldn't say spend $10,000 on Google ads. But yeah, we're going to dig into market research very soon so that we can get a better idea of how to apply these things within the markets we're currently in. But for today, that's it for Legal Marketing 101. Check out RosenAdvertisingcom for more Thanks.

Maximizing Law Firm Profitability Through Focus
Market Research for Legal Marketing