Covid-19 has brought with it a whole host of financial difficulties. For a lot of law firms, new client flows are drying up while existing clients aren’t conducting business. As a result, there just isn’t a lot of work to go around.
For many firms, this means struggling to stay afloat. And while, in the midst of a crisis, there may not be a lot we can do other than try to survive, there are things we can do to blunt the impact of the next downturn in business.
Continue reading below to see our favorite tips for how to prepare for difficult financial times.
Stay Lean
One of the best ways to ensure that you’re able to endure financial downturns when they occur is to run a lean operation. Minimal staff, minimal overhead, and minimal costs should be the name of the game. Luckily, this is easier than ever to do. Modern technology allows for efficient firms to operate with very little overhead.
The secret to maintaining a lean operation is to manage your workflows. It will come as no surprise to lawyers who have been in practice for more than five minutes that work tends to follow predictable patterns. From marketing to client intake to file prep, maintenance, work, and payment usually follow the same steps. For example, real estate clients will almost always follow a familiar pattern.
For those firms that are on top of their workflows, automation through software can be a huge help. It increases the quality of client service and reduces errors while improving efficiency.
Stay Flexible
Flexibility is key to surviving an economic downturn. So while you want to be as lean as possible, you don’t want to eliminate any possibility of making significant changes quickly should the need arise.
Backup and contingency plans are key to making this work. If key support staff fall ill or an extended power outage affects your area, you should have backup plans in place for how to deal with these eventualities.
Plan Ahead
Similar to backup and contingency planning, you should have concrete, written plans for what to do in the event of an economic downturn. Budgeting and business planning should usually include a worst, usual, and best-case scenario. (In fact, the best-case scenario probably isn’t necessary since it's usually just an exercise in wish fulfillment.)
Those firms that have set plans for what to do in the event of an economic emergency typically perform much better than those firms that don’t have anything written down and are forced to wing it.
Final Thoughts
The next few months are going to be tough. Covid-19 has taken a huge toll on the ability of the average person to conduct business, which is having huge knock-on effects on law firms everywhere. But with a little bit of planning and strategy, you can make sure that the next disruption doesn’t knock you on your butt.
