Small Law Firms

Lawyers Should Nurture Smaller Clients

Why? Because sometimes, smaller clients become larger clients. And because it's just a good idea.

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Diverse business partners arguing about bad contract at group meeting Diverse business partners arguing about bad contract at meeting in lawyers office, disgruntled clients disputing about scam fraud in law firm, cheated investors having claims dissatisfied with loanLawyers often need to act differently toward smaller clients than they do toward larger ones. Smaller clients often have smaller budgets, so legal work can have a big impact on their bottom lines. Moreover, smaller clients might not have much experience with legal issues, and more hand-holding might be involved with working for smaller clients on legal matters than for larger clients. However, if lawyers play their cards right, they can help nurture smaller clients who might one day expand their operations and become larger sources of revenue for a law firm.

After starting my own practice over four years ago, I have handled legal work for dozens of smaller companies. It is often very enriching to work with smaller companies since contacts at smaller companies often have more of an interest in the business than the typical in-house counsel with whom people typically interact. In addition, smaller companies are more likely to come from a friends or family referral source, so there is a stronger connection to smaller company clients than other businesses a lawyer may represent.

Smaller company clients are usually more cost-conscious than bigger clients because smaller companies typically have less operating capital than larger clients and likely do not budget for legal expenses when they make projections on the money they will need to shell out for expenses throughout the course of the year. Smaller company clients are far more likely to ask lawyers to predict how much a given project will cost and request budgets to make sure that legal expenses do not get too overblown.

Most of the time, I try to work with smaller clients to ensure that the cost of my legal services do not eat too much into the bottom lines of these clients. Sometimes, I offer alternative fee arrangements and other times I am flexible with billable hour rates to ensure that the client feels comfortable with the attorney-client relationship and knows that I am working with them to provide services while giving them the best chance at freeing up capital to use in operating their business. Most of the time, business clients are appreciative of flexibility when it comes to fee arrangements since they like to see that lawyers are interested in developing a connection with a client rather than merely exacting fees from a business.

Since starting my practice, working with smaller clients and adapting to their needs has yielded solid benefits for my firm. Some smaller clients have expanded and have become larger operations that require additional legal services. As a result, even though we once handled a separate issue for a smaller client years ago, since we treated them well when they were in their development stage, they have used our firm for a number of varied legal matters. In addition, treating smaller clients well has yielded a number of solid referrals, which has helped my firm expand our practice. Many startup companies and other small clients interact with one another through networking groups and the like, and a referral of one smaller company to another can lead to additional work for law firms.

Of course, it is understandable that some law firms would not offer fee flexibility for smaller clients. Indeed, some shops have so much work that they do not need to think about the long game and understand that some fee flexibility now could mean business development opportunities in the future. Moreover, working for smaller clients can hurt some bigger practices. In my experience, some law firms just serve several clients, and they are used to the practices and procedures of these larger companies. When they need to learn a new way of operating for small clients, lawyers might perform work more inefficiently than if they worked for their regular clients. In addition, in certain contexts, spending time on working for smaller clients can take time away from larger clients that help keep the lights on for some bigger shops.

However, law firms that are looking to expand their business should see the opportunities inherent in serving smaller clients. Moreover, if lawyers can be flexible in their fee arrangements and other parts of the representation associates with these clients, this effort might be rewarded. Not only might those smaller clients one day be bigger clients who can be larger consumers of legal services of a law firm, but those smaller clients can be solid referral sources that can lead to additional legal work for a shop.

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Rothman Larger HeadshotJordan Rothman is a partner of The Rothman Law Firm, a full-service New York and New Jersey law firm. He is also the founder of Student Debt Diaries, a website discussing how he paid off his student loans. You can reach Jordan through email at jordan@rothmanlawyer.com.

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