Standing Firm

Gray Haile, a corporate law firm in Washington, D.C., ended 2008 on a high note, having recorded its most profitable year with $435,000 in billings. But like many small businesses, the firm, which handles mergers, acquisitions, and other transactions, experienced the effects of the recession firsthand. “We’ve seen a lot of companies cutting back on their use of outside counsel,” says Leander C. Gray, the firm’s managing partner. In 2009, Gray Haile’s billings dropped to $245,000.

While some firms might have responded by charging less, Gray and co-founder Arkan Haile, who started Gray Haile together in 2006, worked harder to communicate the advantage they offered: that by combining sophisticated, experienced counsel with the versatile, value-driven approach of a small firm, Gray Haile can provide high-caliber, cost-effective corporate and commercial legal representation. The use of large firms “makes sense for transactions that require a large team of lawyers, paralegals, and other support staff,” says Gray. But “the rationale for using them is much less compelling for handling transactions that require small teams of experienced counsel.”

The firm’s marketing message succeeded. Clients saved money by hiring Gray Haile since they didn’t have to pay the high fees and billing rates of a large firm, yet Gray Haile didn’t have to sell themselves short by lowering their rates to attract business.

For the first quarter of 2010, the firm exceeded revenue projections. Their strategy proves that small businesses can withstand economic challenges if they know how to communicate their unique advantage.

While many business owners may think they need to offer rock-bottom prices to attract and retain customers in a challenging economy, cutting prices actually devalues a business’ products and services, says Lloyd Duggan, president of gL Market Research in Middletown, Connecticut. Duggan adds that a better approach for small businesses would be to follow Gray Haile’s lead and convince clients and customers that they’re more relevant than ever.

Here are some ways to do that.

Help customers save money–elsewhere.

During a recession, everyone wants to cut costs. But that doesn’t mean they have to cut what they’re spending with you. “If you’ve got a product or service that can help people cut costs in other areas or that make customers’ lives more efficient, then that’s what you want to promote,” Duggan advises.

Take advantage of being the little guy. “The small business always has in its favor its greater agility compared with larger companies,” says Shirley A. Walker, executive director of the Small Business Alliance of Central Florida, a nonprofit that coaches minority- and women-owned businesses. Customers are more likely to be in direct contact with the small

business owner, and that can lead to a more personal relationship, specialized services, or customized attention. Walker says that quality products from a well-managed company that provides superior customer service make customers want to support your business regardless of the economy.

Offer more, not less. With less overhead to worry about, small businesses can often be more flexible with the prices and services they offer; instead of cutting prices. Duggan says customers will appreciate the added value, and business owners don’t run the risk of their customers becoming unwilling to pay more once the economy’s recovered.

This article originally appeared in the June 2010 issue of Black Enterprise magazine.