This month saw publication of the 2016 High Growth Study by Hinge Research Institute. Although not limited to law firms, law firms (along with “Healthcare & Other”) made up 12.9% of the 968 respondents who answered Hinge’s survey and, therefore, the Study’s findings help provide some insight into whether or not “High-Growth” firms share common traits.
First, “High-Growth” was defined as being a firm with:
“Over $1 million in revenue and had an average yearly growth rate of at least 20%”.
Not exceptional. Having said that, of the firms surveyed:-
- 30% generated over 88% of new revenue growth and were 45% more profitable than their No-Growth counterparts
so most definitely desirable.
So, did these High-Growth firms share any traits? In short, “yes”; and these included:
- Target Clients: High-Growth firms are 75% more likely to have a highly specialized practice – i.e., not all things to all people or full services firms
- Client base: High-Growth firms are more likely to target the larger clients (over $10 million in revenue)
- Research: High-Growth firms are 2X more likely to conduct research on their target client
- Differentiation: differentiators favoured by High-Growth firms are twice as likely to be easier to prove and are more relevant to clients. Importantly, these don’t include “reputation” and “awards won” (favour of No-Growth firms) and do include “culture” and “people”
- Marketing investment: High-Growth firms invest 23% less in traditional marketing than No-Growth firms. This is because what marketing High-Growth firms do is targeted and measured
While some of these may surprise, they reinforce that in order to grow in today’s market firms need to have a clear understanding of who they are, who they work for, who they would like to work for, and the value/benefits they provide. In short, they’re focused.