The Benefits of Marketing to Middle-Market Companies

Law firms could learn a thing or two from commercial banks about marketing to middle-market companies.  First and foremost, banks know what the middle market is and have a fairly consistent way of defining it.  Specifically, commercial bankers define the middle market as companies that have annual revenues in a given range.  That range differs a bit based on the size of the bank.  At Citibank, the middle market might include companies with annual revenues up to $1 billion, whereas at a regional commercial bank, the middle market might include companies with annual revenues of between $50 and $500 million.  I’ve never met an experienced commercial banker who couldn’t clearly identify what the middle market meant for their bank.

Business lawyers, by contrast, rarely define their target audience as clearly as bankers do.  Too often transactional lawyers and business litigators define their target audience solely in terms of their ability to pay the lawyers’ fees and their need for the specific problem the lawyer knows how to solve.  For example, management-side employment lawyers will say that they defend wage and hour cases but won’t explicitly say that their best clients have revenues in excess of a certain amount or more than a set number of employees.  That is inexplicable given that many important employment laws only apply to employers with 50 or more employees.  In my experience as a consultant to lawyers and law firms, M&A lawyers and other transactional attorneys are more likely to use specific metrics when describing their best potential clients.  But even sophisticated deal lawyers often fail to recognize the benefits of using the middle market or a comparable metric to describe their target market.

So what’s the big deal about middle market companies as potential clients for business law firms?

For starters, companies with revenues in excess of $50 million can almost always afford to pay their legal fees.  Moreover, whether it’s a breach of contract for a business litigator or a transaction, the bigger the amount in controversy or at issue, the more sensible it is for the client to invest in quality legal services.  Moreover, it doesn’t take ten times as much effort to bring in a $5 million breach of contract case as it does one where the amount in controversy is $500k.  But the larger matter is often more lucrative for the law firm.  That is one reason why middle market companies are generally better target clients than smaller companies.

Middle market companies are also more approachable than the biggest of the big companies.  The competition for Fortune 500 companies is fierce, and the barriers to entry for landing a $10 billion company are severe.  While general counsel of the biggest companies are less tied to AmLaw 200 firms than they used to be, with relatively few exceptions their best work goes to law firms and lawyers that have large law firm experience and in many cases attended a small number of law schools.  By contrast, there are many more middle-market companies and educational pedigree is likely to be an issue to be retained.

Finally, when business lawyers describe their target as belonging to the middle market, they are more likely to define that market in terms that are understandable to their best referral sources.  And when business lawyers of all stripes define their intended market in terms of annual revenues, employees or other concrete metrics, it makes it easier for commercial bankers, accountants, and other financial professionals to picture who might be a good referral for the attorney or law firm.

So the next time you attend a networking group or have a chance to describe who your best potential clients are, go down the route that most directly describes your best potential clients.  Specifically, use financial metrics to explain that you are seeking middle-market clients who have certain problems that you can solve.

Why Being A Good Lawyer Isn’t Enough To Succeed Financially

I still come across lawyers who feel that the distinguishing feature of their practice is their technical skill as a lawyer. Most recently that sentiment was conveyed to me by a business litigator with about ten years of experience who feels that many of the lawyers he encounters aren’t as technically proficient or reliable as he is. He wanted to make that a central piece of his marketing strategy.

I understand the appeal of this message, but there are at least three reasons why it’s likely to have limited success attracting more clients.

First, lawyers are hired before they provide their services. Thus, the decision to retain a lawyer depends on whether the client trusts the lawyer, not whether the lawyer will in the future be technically proficient.

Second, It is exceedingly rare for one lawyer or law firm to have a material advantage in technical knowledge over all of its competitors. This is especially true for lawyers based in large US cities who serve business clients.  No lawyer has a monopoly or anything close to it on any aspect of legal knowledge. Clients almost always have the alternative of substituting in another competent lawyer.

Third, it is possible for clients to perceive that one law firm is the go-to firm in their community for a particular service or legal problem. But a law firm doesn’t reach that status by proclaiming that its lawyers or level or expertise is superior. That message largely needs to come from others. If enough lawyers and clients and members of the media and other arbiters of taste identify a particular lawyer or firm as distinctive in some superior way, then that firm has created a brand.

But  look around. How many  law firms outside the AmLaw 200 have a brand identity? If you just mention their name that evokes a sense of higher quality lawyering. That kind of brand almost doesn’t exist in American legal services. Individual lawyers have established a personal brand, but even there the brand isn’t built on the lawyer saying they have  better technical skills than their colleagues.

This is not to suggest that it isn’t important for a lawyer or law firm to be experts in their field. Expertise obviously matters once you are in a position to serve a client. And doing good work for a client is the best marketing strategy for keeping them as clients. What too many lawyers fail to appreciate, however, is that doing excellent work doesn’t constitute an effective marketing message for folks who have never retained you before. Part of the message to prospective clients involves your expertise. It is a necessary element, but it is not sufficient to attract new clients.

Being a lawyer in today’s turbulent times increasingly requires sophisticated marketing strategies and messaging.  Lawyers who above all prize their technical expertise often don’t like to hear this message.  But that doesn’t make it any less true.