Larry Bodine Law Marketing Blog : Law firm marketing, legal editor, legal marketing, attorney marketing, business development, marketing consultant, legal consultant, business development

You read it here first: the US will be in an economic recession, probably by the end of the year.  Prepare now, because the facts are everywhere:

• The "wealth effect" that makes people feel prosperous is vanishing, because the median price of a home is expected to fall this year for the first time since the agencies began keeping track 56 years ago. Nigel Gault, an economist with Global Insight, a research firm in Waltham, MA, said, “It’s enough to cause [most people] to pull back.”
• The credit markets are in turmoil, making it hard for big businesses to consumers to get loans.  The Federal Reserve is already bailing out the country's biggest banks, including Citigroup, Bank of America and JP Morgan.
• The American consumer, whose profligate spending has kept the economy afloat lo these many years, will soon switch to austerity budgeting.
  • Average income is shrinking.  Americans earned a smaller average income for the fifth consecutive year in a row, according to the federal government.
  • The U.S. savings rate was negative last year, meaning that consumers have little cushion to survive a recession.
  • Consumers have racked up $880 billion in outstanding credit card debt, according to the bimonthly the Nilson Report (805-983-0448), which studies credit systems. The publication puts credit card debt per household is up nearly 5 percent from the year before.  Cheap credit is rare.
  • Consumers have rolled up their credit card debt into their mortgages, paying short-term debt with home equity loans.  Now homeowners are falling behind in their mortgages and are paying mortgage payments with credit cards.
• The rate of mortgage foreclosures in the housing market in July was almost double that of a year ago.
• The Chapter 7 bankruptcy filings for the quarter ended June 30, 2007 was the highest since the new bankruptcy laws went into effect in October of 2005.  Overall filings are creeping upward.  It's time to refresh yourself on Chapters 7, 11, 12 and 13.
• The cost of the War in Iraq is sucking $4 billion per month from the federal budget.  Congress has so far appropriated about $123 billion for the war in Iraq in addition to the Defense Department budget, and there is no end in sight.
• The stock market peaked on July 19 and is stair-stepping its way downward.  This trend alarms the 76 million Baby Boomers who see their retirement savings shrink, parents in their 30s and 40s investing for college, and the 70 million people under age 28 hoping to buy a house.
• The dollar slid to an all-time low against the euro in July.  A weak dollar means consumers face higher prices on foreign products/services, higher prices on foreign products that contribute to higher cost-of-living, travel abroad is more costly, and it is harder for U.S. firms and investors to expand into foreign markets
• The nation’s international trade deficit in currently $58.1 billion.

Here's how to prepare. 

1. Lawyers must get business development training.  Rainmakers are not born, they are trained. Marketing is not taught in law school, and today's rainmakers got training and attended programs on business development. Getting clients is not an innate talent, but it is a learnable set of skills. 
2. Smart lawyers will make extra efforts to stay close to their current clients -- setting up regular off-the-clock update meetings and visits to client offices -- so that they don't lose current revenue.
3. Lawyers will develop personal business development plans.  The time to prospect for new clients is when you have enough work -- right now.  If you wait to originate new work until your revenues start to go down, it's almost too late.  At that point your competition will be slashing rates and starting to market against you.  Don't wait until the recession is officially declared.