Small Business

How to Thrive in the Midst of an Industry Crisis

As Bacchus Law discovered, hanging on to clients who can't pay right now can lead to success later on

Written by Alexandra Bosanac

Penny Green, a corporate and securities lawyer and the CEO of Vancouver-based firm Bacchus Law, remembers the destruction that the 2008 financial crisis waged on her profession.

Green’s practice assists companies in raising money to go public. In the wake of the crisis, instability in the marketplace meant money was drying up, and many of Green’s clients couldn’t pay her fees. It wasn’t just her firm that was encountering this problem—the crisis had a major destabilizing effect on the entire field of securities law.

As she watched competitors collapse around her,Green knew she had to make a decision on the future of her business. Should she close her securities practice and go back to corporate litigation, an area of law that she didn’t enjoy? Or should she keep her firm, and wait out the crisis?Either option would require major sacrifices.

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In the end, Green took a gamble on her business and her clients. It paid off—Bacchus took the #480 spot on2015 PROFIT 500 Ranking of Canada’s Fastest-Growing Companies for growing revenues 63% in the years 2009–2014.

“Our clients were extremely vulnerable,” Green recalls. She felt her business could only succeed if they succeeded. But risk-averse investors were wary of backing a securities law firm in the midst of the crisis, so Green had to shoulder the lion’s share of risk herself. She sold her home, took a mortgage out on a new one, sold some stock and secured a line of credit for her business worth $1.5 million. She reduced her staff by half, which she found personally difficult. Green even took on some litigation work to keep the lights on and her staff paid. “It was definitelya tough time and we didn’t know how long it was going to last.”

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Another key element of her survival strategy was innovation. Bacchus switched to charging a flat fee. And instead of counselling clients to list on the Toronto Stock Exchange—which can cost upwards of $250,000—Green brought them to smaller exchanges, including the Canadian Securities Exchange, where it only costs about $100,000 to list. She told her clients to think of it as a stepping stone to the major exchanges. It worked for at least one—Merus Labs, a speciality pharmaceutical company that Green helped co-found, wound up building $50 million in revenues and later merged with a NASDAQ-listed company.

Some clients she retained couldn’t afford to pay their bills for as long two years. But Green is glad she held on to them. When the economy finally recovered, she had a larger client base and a reputation for being loyal and finding solutions in tough times.

The challenge taught her to be nimble on her feet. “When the markets get tough, you have to make hard decisions,” she says. “It’s difficult to do but it’s got to be done, with less hesitation. You have to make quick decisions.”

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Have you had to weather a similar industry-wide crisis? Share your experiences by commenting below.

Originally appeared on PROFITguide.com