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How small-firm owners can navigate the cost-of-living crisis
In the current economic environment, the escalating cost of living poses substantial challenges for small law firms. Here, Marianne Marchesi underscores the mounting pressures these firm owners face and emphasises the importance of candidly expressing their emotions while navigating these challenging times.
Grace Robbie
In a recent episode of The Boutique Lawyer Show, Marianne Marchesi, the managing principal of Legalite, revealed how the relentless rise in the cost of living has presented significant challenges for boutique and SME law firms. She also revealed strategic initiatives she has successfully implemented to address and mitigate these challenges proactively.
“Speaking from my experience and the people that I’ve spoken to, it is a big concern. You know, it’s really impacting small-business owners,” she said.
Marchesi underscored how these beliefs echo broader sentiments shared among all small-business owners in the current economic climate.
“In particular, I’m speaking from the perspective of a law firm owner, but I think across the board, small-business owners are not really OK right now. It is a big concern,” she said.
When confronted with these mounting pressures earlier this year, Marchesi candidly reflected on experiencing and navigating profound stress induced by uncertainties in the economic landscape.
“When I did talk about it with my peers earlier this year, I was probably at my lowest point in terms of the stress levels associated with the economy and cost of living and everything,” she said.
However, Marchesi emphasised the profound value of sharing and discussing her feelings with peers who faced similar challenges, as it provided crucial emotional support and validation during periods of uncertainty.
“As soon as I shared it and vented it, I felt like a weight was off my shoulders. I had peers saying, ‘me too’, and ‘I feel the same way’, or ‘I’ve felt that way before, and I came through it’. I feel like it is really important to speak up when you’re going through those doubt periods,” she said.
“If we don’t talk about it, it can feel really isolating, and it can feel like you’re doing something wrong when really there’s a whole range of factors that can be contributing to it.”
In response to the substantial challenges arising from the increased cost of living impacting small-business owners, Marchesi has proactively implemented a series of strategic measures to enhance her firm’s financial resilience and stability.
“Up until then, we were really experiencing the cost of living. I was very reactive with my cash flow strategies and spending expenses.
“Now forced to be proactive has been so positive, and I’ve learned so much in going through this experience of the cost of doing business,” she said.
Marchesi detailed a strategic initiative implemented at her firm, involving pricing adjustments and incentivising longer client commitments, designed to mitigate the financial challenges posed by increasing business costs.
“Some of the things that I’ve done, for example, is obviously our clients are also feeling the cost of doing business, which has squeezed our pricing and our quoting. So looking at different strategies to gain commitments from clients, like offering them better pricing, not directly passing on our costs of doing business, or the increases in return for maybe a longer-term commitment from them,” she said.
“Also investing in financial advice, which, look, we always have, but it has been pretty reactive now that I looked at it in hindsight.”
Marchesi underscored the significant benefits of these incentives and strategies in navigating the challenging financial landscape as a small-firm owner.
“Having that proactive cash flow management and financial advice has been really game-changing and has allowed us to implement really good cash flow strategies,” she said.
