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What the small firm market looks like going into 2022

When you run a small law firm or solo practice, it is essential to continue to do market research. This is especially true as we approach the start of a new year. Doing so can provide you with crucial information that can help you better prepare your marketing materials and other plans for the upcoming year.  

With that being said, 2022 is looking like another exceptionally competitive year for the legal industry and the small law firm market. Here’s what you can expect.  

COVID-19 and the Small Law Firm Market 

The small law firm market has been dramatically affected by COVID-19 over the last nearly two years. First, you need to offer virtual consultations. No matter where you are in the country, all of your major competitors have already started offering virtual consultations and have continued to provide them despite some of the world opening back up to in-person meetings.  

The market is also even more competitive than it was pre-pandemic. More and more attorneys began working from home and saw the benefit of branching out and opening up their solo practices or small law firms. You will need to keep up with the trends and the legal market as the Covid-19 pandemic continues to impact the country.  

How To Stand Out in the Ultra-Competitive Legal Market  

You know you have to make sure that your target clients know who you are and why your small law firm is the one to choose among the countless other attorneys in your area. You know you must offer virtual consultations and adapt to the technology of virtual court hearings and the like.   

But it would help if you also devoted a good chunk of your attention to making sure you are marketing online. One industry that was not negatively impacted by the global pandemic was the digital marketing industry. More people are online than ever before. This is a new normal where your small law firm must focus its efforts. 

There are multiple digital marketing areas where you could direct your attention. But choose carefully based on which area you are most likely to see the most leads. For example, if any of your clients come in through Facebook, social media marketing is the right choice for you. But if you are a small law firm just starting to get your name out there, you might instead focus your efforts on building your website and working on your search engine optimization and content marketing strategies.  

These are just a few ways you can help your law firm stand out in a market as competitive as the legal industry is going to be in 2022. You will need to continue to do your market research every few months or so to make sure you’re staying on trend and appealing to your ideal clients.  

Small Law Firms in 2022: What You Need to Offer Clients   

Now that COVID-19 has changed the way we live and do business, your law firm adapting to the times is essential if you hope to find or remain successful in the small law firm market in 2022. In addition to being prepared technologically, offering virtual consultations, and focusing on digital marketing, there are other steps your small law firm can take to meet your clients with what they need.  

Now is the time to refine your current onboarding processes. After everything your clients have been through, you need to guide them through their legal journey seamlessly so as not to overwhelm them. You also want to be sure to set expectations for communicating. In the digital age, your clients will expect to get a hold of you and get answers to their questions promptly. Disappointing them in this area could mean the loss of a client or, worse, a poor review.  

But do not forget that your clients are human, and they still need to connect with you. They need to feel they can trust you during some of the most challenging times of their lives. Make sure your small law firm keeps this pivotal point in mind in 2022 as the market continues to be over-saturated with options for legal representatives.  

Why solo and small law firms have a competitive advantage in 2021

Corporations are cutting legal spend as the COVID economy continues to ravage business. They are looking for accessible and affordable lawyers. Small law firms and solo practitioners can provide instant access to top legal talent at a fraction of the cost.

In addition to corporations, general counsel firms are interested in how small law firms utilize technology to create efficiencies. They are also considering how cost savings might be passed on to them through the reduced overhead achieved by independent attorneys.

Capitalizing on Competitive Advantage

By focusing on competitive advantage, small law firms can bolster their caseloads by highlighting how they benefit their clients. Corporate clients demand attention and services that are unique to their needs. Solo practitioners that understand these needs are better-prepared to position their services in the market to attract new clients.

Here are three competitive advantages of outside general counsel:

Small Law Firms Are More Effective

Legal issues are challenging to predict. However, outside general counsel is becoming more widely-utilized to assist with this problem, especially when atypical cases arise. They have the resources and knowledge to handle them more efficiently and effectively than in-house counsel.

Remaining flexible and innovative is critical to small law firms. Keeping skills sharp, taking on exciting cases, and consistently improving processes are excellent ways to stand out among the sea of law firms in Colorado.

Small Law Firms Provide Unmatched Agility

Without the “red tape” of the Big Law firm environment, independent attorneys typically do not need to run decisions through a chain-of-command. Therefore, they tend to be more responsive and agile versus their larger competitors.

General counsel clients and corporations are demanding more opportunities and flexibility. Solo practitioners must create a service delivery process that is reasonable and works well for both sides. Ensure that the processes you create are insulated from legal mistakes while keeping expenses as low as possible.

Small Law Firms Offer Predictable and Efficient Pricing

Outside counsel offers predictable and efficient pricing to clients in many ways. However, the market is driving the need for independent attorneys to innovate when reducing overhead costs. Areas to consider include office environment, technology, human resources, and other operating costs.

For example, more legal professionals utilize co-working spaces in Denver than in the past, especially in environments that are exclusive to small law firms. This option allows them to retain the advantages of working near other lawyers while reducing their rental costs.

Streamline On-Demand Services

The most vital areas that you should streamline include billing, flexibility, and client knowledge. In-house attorneys and corporate clients are looking for outside counsel that can provide well thought out and quick answers to questions as they arise. They do not merely want “just a lawyer,” but they also want a business partner and advisor.

Become Client-Centric

Most legal clients are not given enough opportunity to offer feedback to their attorneys. Rather than view feedback as an irritating way to invite criticism, do not be afraid to solicit it. Ask clients how satisfied they are with your services, what they like, and how they think you could improve.

Focus on Billing Processes

Cost predictability is crucial to satisfying today’s clients. All billings should be airtight and submitted according to their needs. Ensure that the billing process is repeatable without duplicate steps to reduce potential errors. When meeting with the client initially, discuss the methodologies that they use to address billing and let them know that your team can rise to the occasion.

Reduce Overhead

Since efficiency and cost are competitive advantages, look for ways to reduce overhead costs. If there is unused office space, consider renting it to adjacent practice lawyers or complementary businesses. It is also possible to rent a co-working space in Denver, Colorado that exclusive to lawyers. Find as many opportunities as available to mitigate the number of expenses being passed along to clients.

Small law firms and independent attorneys can be more accessible to general counsel and corporate clients. Focusing on a relationship-based experience allows you to meet their needs in the right place at the right time. Doing so will allow you to provide services that generate word-of-mouth and attorney referrals, even amid the roaring coronavirus pandemic.

Jordan Deifik and Jay Kamlet are Colorado based commercial real estate professionals. They co-own LawBank, the largest and oldest shared office space for lawyers. LawBank has multiple locations in the Denver metro area and Downtown Las Vegas, and offers flexible leasing options to attorneys throughout the region. LawBank also assists larger law firms sublet their vacant office space with small law firm tenants. Learn more about LawBank’s amenities, and the Las Vegas and Denver locations.

Looking to expand your law firm? This is the place to go

Lawyers looking to expand their solo law firms into small law firms need to examine their location options, ensuring that their new market will provide ample work for them while still being affordable.

Many attorneys will find that large metropolitan areas like New York and Los Angeles are too costly; however, there are a handful of states with large cities that are still affordable.

Nevada is one of the best options for a second location outside of Denver due to the plethora of businesses that call Nevada home, the seemingly endless amount of different industries in the state, and the low cost of living.

Excellent Economy and Tax Benefits for Businesses – More Work for Attorneys

Nevada’s recent job growth is 100% higher than the national average, while economists forecast their future job growth to be 33% higher than the rest of the United States.

Nevada was hard hit by the pandemic due to the shut down of the ever-popular hospitality industry. Still, past figures show that Nevada consistently has a lower than average unemployment rate when all businesses are up and running.

While all states’ economies were affected by COVID-19, Nevada saw a three-place rise in CEO’s annual Best and Worst States for Business study, from number 6 to number 3.

Some of the largest draws for business owners is the state’s lack of:

  • Personal Income Tax
  • Corporate Income Tax
  • Franchise Tax
  • Inheritance or Gift Tax
  • Unitary Tax

Nevada also boasts some of the lowest annual fees for businesses in the nation and has based its business courts on the Delaware model, meaning that the state’s business court minimizes the time, cost, and risk of commercial litigation by prioritizing businesses to avoid disruption and active judicial participation.

A Hot Spot for Industries

Nevada hosts many of the same industries that Colorado does, like tourism, mining, aerospace, and technology. While it’s impossible to list every company based in the state, many brands are setting up an office or warehouse, including Amazon and Starbucks.

At the same time, industry leaders like Zappos, AMERCO Real Estate Company, Bigelow Aerospace, and Just like Sugar have their headquarters in the state. Nevada also boasts a booming tech industry with a seemingly endless number of tech start-ups launching every year.

Of course, tourism is the most significant industry in the state, generating $67.6 billion in 2018 alone. Colorado-based solo attorneys looking to create or expand a small firm with a specialization in the tourism industry will find a thriving market, with Las Vegas bringing in almost all tourism revenue, versus Denver, composing nearly half of Colorado’s $22.3 billion in annual tourism revenue.

Low Cost of Living

Due to the state relying on gambling for a large part of its annual revenue, Nevada has one of the lowest living costs in the nation.

The lack of personal income tax and corporate income tax means paychecks have a minuscule amount of payroll and federal income taxes removed.

Property taxes are some of the lowest in the United States as well. Some people will complain about the slightly elevated sales tax rate of 8.14%; however, that amount is still smaller than Denver’s 8.31% in addition to much lower housing and rent costs.

Those who choose to base their practice out of the Northern Nevada region, including Reno, will have a slightly higher cost of living. Still, it usually stagnates around the national average. Incidentals cost somewhat less than other states, meaning residents have more buying power than they do in other states. Commercial real estate costs are some of the lowest in the Western market for those who need designated office space.

Solo practitioners looking to expand their practice into other markets should give Nevada a second look. With its tax benefits, a plethora of different industries from tech to clothing to mining, and a low cost of living, the state has more than enough resources for a practice to expand into a profitable market.

Nevada’s ability to bounce back after financial markets take a severe hit is proven, and attorneys are always in demand in the city that never sleeps.

Jordan Deifik and Jay Kamlet are Colorado based commercial real estate professionals. They co-own LawBank, the largest and oldest shared office space for lawyers. LawBank has multiple locations in the Denver metro area and offers flexible leasing options to attorneys throughout the region. LawBank also assists larger law firms sublet their vacant office space with small law firm tenants. Learn more about LawBank’s amenities and Denver locations.