Managing Law Firms in Transition

Managing Law Firms in Transition

Law Firm Profitability and Client Satisfaction: Using a Pricing Pro to Achieve Both

Posted in Law Firm Growth, Law Firm Leadership

Law firm leaders understandably see lucrative client work as an important key to overall firm profitability.  Left to their own devices, those leaders would eagerly raise rates or otherwise take steps to ratchet up the yield on work.  In contrast, their clients often consider the containment of legal costs as a key component to valuable legal services.  If clients were in control, they frequently would reduce rates, or seek other ways to manage down their legal bills.

While these respective objectives may seem incompatible, they don’t need to be.  Hitting the sweet spot of simultaneous law firm profitability and client satisfaction is possible—it simply requires greater effort in managing the law firm/client relationship.

In recent years, some firms are learning that achieving firm profitability and client satisfaction can be aided through the use of a law firm pricing professional.  The recent Thomson Reuterspaper Law Firm Pricing Insights – Value, Profitability, and What Comes Next provides an informative overview about this breed of professional and some of the successes enjoyed to date. Law Firm Pricing Insights makes the case for using pricing professionals to meet law firm financial objectives while growing client relationships and satisfaction.

It’s review of the growth, use, and roles of pricing officers at law firms is commended for your review and will not be repeated here.  But it may be worth looking at five of the more practical benefits for a law firm that utilizes a substantively empowered pricing professional:

Enhances the Understanding Between Firm and Client.  By already knowing the firm’s financial strategies, the firm’s pricing professional can concentrate on listening to the client to understand its objectives. Instead of acting as an advocate to convince the client that it mustaccept the firm’s financial terms, the pricing professional takes what is learned from the client to arrive at a solution that works for both sides.  Communication improves understanding, the client relationship, and in many cases, financial results.

Brings a Bigger Toolbox to Fixing the Profitability and Value Conundrum.  Most pricing professionals are aware of numerous ways to price legal services.  With a firm pricing professional involved, creative financial arrangements can be discussed to keep the firm/client discussions from getting bogged down.  The bigger pricing solution toolbox reduces the likelihood that an impasse with the client will arise.

Can Foster the Institutionalization of Clients.  While working on an acceptable financial arrangement with a client, a pricing professional may see opportunity beyond the immediate engagement. Instead of the analysis being limited to a short-term pricing arrangement, the pricing professional may recognize ways the client’s fundamental requirements can be leveraged long-term. An astute pricing professional may see how it may be worth strategically investing in a new relationship in order to build a long-term one.

Let’s Lawyers Concentrate of What Lawyers Do Best.  A pricing professional can free a lawyer to focus on client service.  Once an acceptable arrangement between the firm and the client is endorsed by the firm, the firm’s backing may make it be easier for the lawyer to concentrate on achieving substantive results.  While a priced arrangement does not excuse a lawyer from managing a file correctly, it can establish a clear understanding between firm and client that engenders the efficient delivery of client service.

Improves Lawyer Morale. Too often lawyers are told to raise their rates beyond their comfort zone.  It’s not as if lawyers don’t value their own worth, but they see firsthand the impact of being priced out of the market.  The firm’s desire for higher rates versus the lawyer’s desire to not rock the client boat can amp up the pressure at the firm.  By moving outside the attorney rate merry-go-round, a capable pricing professional can find a solution that satisfies firm leadership, the lawyer, and the client.  A busy lawyer is a happy lawyer.

More and more law firms are turning to pricing professionals to improve the client experience and financial results.  Is it time your firm does likewise?



Is Succession Planning On Your Firm’s 2019 To-Do List?

Posted in Law Firm Leadership, Law Firm Succession, Uncategorized

Succession and succession planning are hot topics in the legal profession. One statistic explains the focus on the topic – only about 30% of law firms make it beyond the first generation.

Why Do So Many Law Firms Fail?

Why do so few law firms make it to the second generation? Consider this progression of logic:

Few goals are realized by happenstance;
The greater the objective, the less likely it will be realized without serious intent;
A written succession plan is a reflection of serious intent;
95% of law firms have no written succession plan;
For a majority of law firms, 25% or more of revenue is generated by or closely associated with lawyers that are 60 or older;
Few firms will survive the loss of 25% of revenue in a short period of time.
So What?

If you are a law firm leader, this reality does not surprise you. We regularly visit with managing partners and governing bodies that see the writing on the wall. With the exception of those who choose to bury their in the sand, most agree succession must be addressed. A comprehensive and workable succession plan is essential if a law firm hopes to survive beyond the current generation.

A 3-Step Path to Survival

Step 1

Start now. As simplistic as this may sound, it may be the singles toughest part of developing a plan. The day-to-day demands of managing a practice make it difficult to step back and consider the future. This reality is one of the biggest reasons many firms find themselves in the current predicament — years of not having time to address relationship continuity and succession.   The first step is to be done with hand wringing and more talk.

“To think too long about doing a thing often becomes its undoing” –Eva Young

Step 2

Engage your colleagues in a series of discussions intended to yield a plan for succession. Inclusion is essential to obtaining the buy-in necessary for a plan to succeed. Conversations with those impacted (clients as well as lawyers) that focus on long-term benefits, continuity of representation for clients, and the value of legacy are critical pieces of the puzzle. Some of these conversations may not be easy; but without them you are reverting to a strategy of hope.

Step 3

Execute and monitor the plan. Very few plans roll-out exactly as intended but the routine monitoring of performance to the plan provides a means of adjusting as necessary to achieve the objective. Succession is about the future — and any conversation about the future must be on-going. Inside a successful firm, a good plan must be able to evolve.

A successful succession plan doesn’t necessarily mean future leadership comes from within your firm. The plan may include the recruitment of new talent in the areas of leadership, and/or client generation and servicing. It may mean that the core of your firm survives a part of a bigger organization. The real key is that the result your firm ends up with is the result you desire. Without planning the desired result is highly unlikely.

One additional note that many firms miss when it comes to the issue of succession planning—-Succession is likely on the mind of your clients. The issues of experience and continuity are likely being dealt with inside your client’s organization. A thoughtful collaboration between relationship partner, the client and firm leadership is an opportunity to demonstrate that level of client-centeredness all law firms proudly tout.

Our experience is that most firms wait too long and suffer the consequence of fewer or no options. Don’t let that happen to your firm!


Law Firm Succession Planning-Five Mistakes to Avoid

Posted in Law Firm Leadership, Law Firm Repositioning/Turnaround/Restructuring, Law Firm Succession, Law Firm Transition

The issue of succession planning at law firms is a topic of great importance.  The need to address succession won’t always wait until a convenient time and makes planning as important than ever.

Succession planning among firms, whether leadership succession or client relationship transition, is a mixed bag. Some firms have thought about it deeply and are well prepared for succession. Typically, those firms recognized the issue some time ago and have prepared for the eventual need to turn the reigns over to the next generation. Other firms have not had the requisite foresight or discipline. Sometimes lulled into a false sense of security by the continued vibrancy of their partner ranks, they have continued to focus on the day to day blocking and tackling instead of giving succession planning the attention it deserves.

At some point, however, most firms wake up and start addressing succession.  While the level of preparation at firms varies, there are at least five common succession planning mistakes that every firm should seek to avoid, including:

Waiting Too Long. The press of business and attention to more immediate matters can distract a firm away from planning for succession. Waiting to a later date to plan is not a good idea. Succession issues can be complex, the personalities affected can be many and the time it requires to get it right can be great. Like waiting to the night before a spouse’s birthday to buy a present, leaving succession to the last minute can have lasting negative effect.

Failing to Prepare Future Leaders or Relationship Managers. A by-product of waiting too long is failing to develop leaders or relationship managers that can be integral to a firm’s future. Scouting for future talent is one thing, but developing that talent is as important as prospect identification. Inattention to development is bad for two reasons. One, future leaders or managers may have inadequate time to mature into readiness. Second, despite initial high hopes, the development process may reveal that he or she is not up to the task. In instances in which a future leader or manager turns out to be uninspiring, a firm will benefit if it still has time to think of alternatives, including looking laterally or for a merger.

Failing to Make Succession Part of a Larger Strategic Plan. A succession plan should not stand alone-it should be part of an overall strategic plan. Simply changing out leadership or managers without knowing where the firm is going long-term is short-sighted. Installing new leaders or managers through the use of a succession plan is helpful, but if their skills are not in concert with an overall strategic plan the firm seeks to follow, success may be fleeting.

Overlooking the Impact on Morale. A well-planned and transparent succession will be far more comforting to firm personnel than a succession cobbled together when a succession crisis arises. Discussing the upcoming succession and the future of the firm will instill confidence in the firm, its management, and its future. Forgetting about how the rank and file feels can undermine morale and make an otherwise smart succession plan problematic. Good communication is critical in any succession plan, and especially so when trying to build widespread support.

Failing to Prepare Clients. At the end of the day, law firms don’t exist if they don’t have clients. Even when addressing leadership succession, a sound plan recognizes that clients can be skittish about the stability of their law firm. A smart firm deals with that concern by keeping the client informed about leadership succession. Getting a client involved is even more important when addressing the transition of relationship managers.  A client not involved in the selection of the next relationship manager for its matters will not be a client for long.  Whether addressing leadership succession or client relationship transition, preparing clients for succession is critical.

No doubt your law firm has thought about succession.  But as it has begun to prepare for its future, has it approached the task in a way that avoids these five common mistakes?




Thankful for Accountable Law Firm Leaders

Posted in Law Firm Leadership, Law Firm Transition

As we approach the the long Thanksgiving holiday I’m reflecting on my appreciation for law firm leaders who are accountable and drive a culture around that standard.

Somewhere along the line the idea of being held accountable began to be viewed as punitive. Paying the price.

Certainly this is part of the equation; but accountability is a much greater concept than merely calling one (or a group) to account for decisions and deeds.

Today’s most effective leaders know this, and successfully incorporate accountability to check progress against guides and benchmarks.

Effective law firm leaders are no exception.

Not An Outside-In Proposition

Extraordinary leaders are, before contemplating any other measure, accountable to themselves.

It is unfortunately common for would-be leaders — those who hold-down positions of authority — to shy away from accepting responsibility for less-than-winning results. Many are skilled at deflecting or redirecting blame to others or even to circumstances. This approach can work in the short run; but the eventual cost comes in the form of lost credibility and trust. When the tab in these columns reaches a tipping point, any ability to lead is gone — position on the org chart or title notwithstanding.

We’ve all witnessed the would-be leader. Accomplished in the art of deflecting responsibility when the news is bad and taking full credit when times are good. This individual’s calls for solidarity and partnership will eventually ring hollow. Few will follow.

Accountability For The Organization

The accountable executive has a clear vision of the steps necessary to ensure that the organization remains true to its purpose, mission, values and goals. When / if these components have not been articulated, the accountable leader has both the institutional equity and the tools necessary to instigate the necessary dialogue.

Accountability For Firm Members

The effective leader builds and hones an entire organization that is accountable. Expectations for performance, culture and professional growth for every member of the organization are clear. With those expectations established and communicated, the accountable leader (or a team of accountable leaders) routinely monitors actual performance to those expectations, taking appropriate actions in response.

Inside the accountable firm, when expectations have been met or exceeded the performance is rewarded in a visible manner. If expectations are not met corrective action is taken in a humane and respectful manner.

Having a culture in which there is a recognized expectation that is routinely measured against is more important than what those expectations actually are. An organization whose leader ensures that goals are regularly set and measured against is on its way to improvement.

Accountable firms are the byproduct of teams and individual leaders who first hold themselves accountable.

Does your law firm and its leadership project a culture of accountability?

Minimizing the Risk of an Unexpected Law Firm Closure-Five Steps Every Law Firm Should Take

Posted in Law Firm Crisis, Law Firm Leadership, Law Firm Liquidation, Law Firm Succession, Law Firm Transition

As the calendar year comes to a close, there is a lot to do at most law firms. Activities like collecting bills, distributing profits and casting next year’s budget can occupy many a leadership team. The tasks at hand can be time consuming and all engrossing. Given the importance of these short-term issues, thinking about a firm’s long-term strategy often gets reserved for the next year.

The importance of thinking long-term and planning for the future, however, cannot be over-emphasized. It is especially true when it comes to succession planning. Too little attention to succession planning can prove fatal, as can happen at law firms that experience an exodus once year-end distributions are made.  When year-end is coupled with a spate of departures, a firm runs the risk that unplanned closure is in its future.

Unless closing is part of a well thought out plan, no firm wants to face a closing crisis. But if firms are not attentive to the topic of succession planning, an unplanned closing, especially as year-ends approach, is a distinct possibility. It is at year-end that a firm’s lawyers think about their future, the stability of their firm and the suitability of the platform that supports their practice. The answers to those questions tend to be disquieting if succession planning has been poor. For a firm that fails to prepare, the end of calendar year attrition can sap a firm of its future generations and can put it on a path to eventual closure.

To avoid that outcome, firm leadership should:

Address the Topic of Succession Planning Early. Law firm succession planning is the essence of long-term planning. Planning involves more than identifying potential leadership and client relationship successors. It also involves planning and executing on a process of making succession a part of the firm’s culture. It takes years of continual attention to do it well.

Involve Your Lawyers in Succession Planning. Succession planning requires “buy-in.” While existing leadership can assure that the planning process gets the attention it deserves, full-fledged engagement from a firm’s lawyers enhances the possibility of success.

Review your Plan and Update it Often. Succession plans, like most long-term planning efforts, are living documents. Every firm committed to creating an effective succession plan should frequently update it in the wake of new developments or even just with the passage of time. The elements of any succession plan aren’t static but always are evolving.

Enlist Clients in the Process. It is presumptuous to think that client relationship succession is a unilateral process controlled by the law firm. Clients have the ultimate say over whom they will use as counsel. Frequent communication with clients is essential to developing a strong succession plan. The firm will be informed better about how client succession can be effective and will avoid adverse surprises.

Build Confidence in the Future. A succession plan should not be a secret to keep. It should be used to instill confidence in a firm’s future. Share it with the firm’s next generation of leaders and solicit their input in the process. If the future looks good at a firm, it is less likely to suffer attrition from the next generations.   The future will look brighter and the fate that befalls firms that “age-out” becomes less likely.

As 2018 comes to a close, is your law firm well positioned with a clear and effective succession plan? If not, it is time to get started if an unplanned closure is to be avoided.


Is Your Law Firm At Risk?

Posted in Law Firm Crisis, Law Firm Repositioning/Turnaround/Restructuring, Law Firm Transition, Law Firm Warning Signs, Uncategorized

Don’t waste your time trying to control the uncontrollable, or trying to solve the unsolvable, or think about what could have been. Instead, think about what you can control and solve the problem you can solve with the wisdom you have gained from both your victories and your defeats in the past.  – David Mahoney – Author

Now that the mid-term elections are behind us, we can all get refocused on making our law firms stronger. An excellent start is to conduct a quick self-assessment of the state of the firm.. Here are 5 areas that, if carefully examined, combine to provide an accurate preview of what the future has in store for your firm.

1. Turnover – has there been any unexpected turnover? If so, it is a sign of potential trouble. Law firm leaders should regularly (monthly) monitor turnover levels with a process that quickly identifies any material uptick. Rapid change is destabilizing, even when there is an excellent business explanation. When spotted, decisive action in one form or another is likely in order.  What does your turnover pattern look like over the past 36-months?

2. Dissatisfaction – is there any measurable dissatisfaction within your firm? If so, is it growing? Relative satisfaction is a key indicator of business risk. A growing number of law firms find significant management value in systematically monitoring the satisfaction of their lawyer and non-lawyer employee base. And with good reason,  growing dissatisfaction is an indicator of future tourble. Do you have growing dissatisfaction in your firm?

3. Profitability – have your profits stagnated or worse yet are they falling? Profit pressures can quickly lead to stress for any business. I am not a believer in the Profits Per Partner (PPP) metric as a be-all-end-all; but if your law firm is paying progressively less for the same performance, it is at risk.

There are a numer indicators of declining profitability besides the exalted PPP metric. These include:

Falling productivity
Loss of a key client(s)
Increased aging of payables
Increased aging of receivables
Falling client billing
How is your firm’s profitability holding up?

4. Debt – has your firm increased its use of debt for operations?If so, it is a clear sign of stress.  Most law firms use some amount of debt, whether to smooth out collections cycles with a line of credit, or to finance growth and fixed asset purchases.  Any firm increasing its use of debt to cover basic operating obligation has embarked on a treacherous path.

5. Litigation- is your firm facing new exposure from client or employee claims of any type?  Claims against the firm can be enough to create serious problems for a law firm. Monitoring the frequency and size of claims against the firm is a must. If your firm has seen an uptick in claims activity, careful examination by leadership is essential.

The thing about organizational risk is that the sooner potential trouble is identified the greater the probability that a viable solution can be identified and implemented. The more serious the trouble, the greater the need for outside support which can bring an unbiased perspective.

Is your law firm at risk????

Five Law Firm Client Succession Strategies-Finding the Best Approach for Your Firm

Posted in Law Firm Leadership, Law Firm Merger, Law Firm Succession, Law Firm Transition

There are two primary succession challenges law firms face.  Leadership succession is one and is a vitally important step to assure a firm’s longevity.  A second kind of law firm succession involves the succession of client relationships as senior-lawyers wind-down or retire.

As hard as leadership succession can be, managing client relationship succession can be an even more formidable task.  In an era in which client loyalty is fleeting and personal skills can be as important as substantive ones, having a client continue with a firm past a rainmaker’s retirement may be difficult to achieve.  Because the economic repercussions can be serious if not done right, finding the right client succession strategy is more important than ever.

There are five major strategies for dealing with client succession.  Some firms will employ a combination of the five after determining that “one size does not fit all.”  Indeed, the right choice for any firm depends on its clients, talent, and situation.  From the menu of choices firms usually employ one or more of the following five strategies:

Develop and Nurture Existing Talent.  In a perfect world, a law firm’s client succession strategy involves developing its young(er) talent and nurturing it to take over client relationships as senior attorneys give way.  Considering today’s legal services market and law firm demographics, building an internally focused client relationship succession plan is harder said than done. Making it work requires identifying capable talent in the firm, training the talent, and “embedding” it into the client relationship.

Hire from the Outside to Develop and Nurture Acquired Talent.  Sometimes a firm does not have the needed talent to develop an internally constructed client relationship succession plan.  If adequate time exists, a firm can hire talent around which a succession plan can be built.  Hiring for the substantive and interpersonal skills positions the firm to develop and nurture the talent acquired.  This can be especially effective if retirement is years away–it protects the client relationship and can be less threatening to the senior lawyer.

Hire from the Outside to Retain Client Relationships.  More than a few firms find themselves without the luxury of time.  Due to a senior attorney’s impending retirement, the client succession strategy needs to hit the ground running.  Without sufficient talent to train or time to hire and train promising talent, a firm may consider hiring a seasoned lawyer that works in the area of the retiring lawyer.  The new hire must exhibit not only the substantive skills the client needs, but also the essential interpersonal skills.  Even better, hiring an attorney that already has a client relationship with the client the firm is seeking to retain is a win/win.

Hire from the Outside to Replace Client Relationships.  Sometimes a senior attorney’s client relationships are too dispersed or quirky to realistically find a single attorney to act as a new client relationship manager. In that case, the strategy may be to replace the volume of work and its revenue by hiring a lawyer that has a book of business that can replace what is soon to be lost.  While clients are not to be considered fungible, losing a group of clients on an attorney’s retirement can be ameliorated if replaced with new clients.  If keeping long-time clients simply is not in the cards, finding new clients controlled by a lateral prospect may be the best alternative.

Merger.  Depending on the size of the succession challenge and firm, solving it with a merger may be the best approach.  The substantive skills and client relationship personality of the merger partner may fill the needs normally addressed by the other client relationship succession strategies.  More than one succession plan merger has been affected by going to a competitor that has many of the same client relationships. Indeed, merger has proven to be a popular and effective client relationship succession strategy.

Client relationship succession is one of the more difficult challenges law firm leaders face.  Finding the right strategy to meet the challenge depends on factors unique to each firm.  What strategy fits your firm best?

Succession Planning – Before It Is Too Late

Posted in Law Firm Leadership, Law Firm Succession, Law Firm Transition

A few law firms have had the benefit of organic preparation for succession. Their natural tendencies led to grooming the next generation for the transition of client relationships and management responsibilities. A small percentage of firms have actually executed carefully prepared formal succession plans.

But, the overwhelming majority of law firms are not prepared for or even preparing for succession.

Admittedly, succession planning isn’t for everyone. If your law firm doesn’t have interest in long-term, multi-generational, viability then this post isn’t really for you. In fact, you would be far from alone, 70% of all law firms don’t make it beyond the first generation — some intentionally; but far too many by default.
The consequences associated with failing to prepare for succession range from severely limited options to firm closure.

As a matter of record the profession does not have a great track record when it comes to planning even for the near-term — much less, preparing a well thought out roadmap for dealing with critical issues or navigating transitional challenges. Surveys consistently indicate that a small percentage of law firms have anything that approximates a documented succession plan in place.
The only viable conclusion is that succession simply isn’t very important to many.
Too harsh? Think about it. Virtually everyone reading this post will readily agree that in life we rarely accomplish anything we did not set out to accomplish.
Transitioning a law firm from one generation to the next is no exception.
It is arguable that there was a time in the legal profession when a reputation for excellence, or long-standing institutional clients, or even the fabric of a partnership was enough to somehow ensure, or at least facilitate succession. But I would suggest that day is gone. Clients drive a different conversation. The marketplace is definitively different. And law firms face transitional challenges on what can seem like an almost daily basis — not the least of which is that the young lawyers in your firm have their own set of goals and aspirations.
(In fact, the young lawyers in your firm have been talking about your firm’s succession plan…and evaluating their career options based on what they see.)
If you’re really serious about building a firm that moves from the founders to successive generations, it is time for you to appropriately address how you hope to make that happen.
Planning for transition isn’t easy… But most lawyers I know love to tackle difficult problems. Deciding it is an issue that warrants focus is the most difficult part of the challenge.
Once you’ve decided to focus, an effective plan will tackle some significant questions. Among them, compensation, client control (or more accurately, relationship management — the client is the one in control), talent assessment, and the mentoring and cultivation of future leaders.
But not one of these issues is insurmountable…if succession is truly a priority.
For those that care about successful transition, the time to start the process is now, before it is too late.

Law Firm Retirement Plan Tweaking – Four Additional Things to Think About

Posted in Law Firm Leadership, Law Firm Succession, Law Firm Transition

At a growing number of law firms, the Boomer generation is reaching the age when retirement among the ranks has partners leaving in increasing numbers. Numerous industry focused writings have noted an array issues faced by law firms experiencing retirements.

As partners retire, financial ramifications can be felt. The monetary payout associated with the retirement benefits is one. While some firm’s retirement plans are fully funded, many plans require a “topping off” of a guaranteed benefit and others, not being funded at all, must be satisfied out of yearly profits. Second, when senior lawyers retire the impact can be negative due to the loss of their productivity not so readily replaced. Third, retirements can require the return of capital to retiring partners. In a world in which partner capital contribution levels have grown, the capital to repay can be significant-certainly often greater than the capital being contributed by incoming partners.

Individually each one of these financial “hits” can be material. When considered together (as they often occur), they not only can strap a firm but also can upset the financial bargain the younger non-retiring partners have come to expect. To respond to that predicament, some firms are lessening the financial impact by reducing the overall financial benefit paid on retirement, extending the years for repayment of capital, extending the years of service necessary to vest in a retirement plan, and lowering the cap on annual retirement benefits paid by the firm in any given year. Because such modifications must be phased in over a number of years, however, the initial ameliorative effect can be modest.

Even a proactive financial solution to the increased retirements does not necessarily solve all problems. Other issues tied to cascading retirements can loom over a firm, including:

Modifications to the Plans Can Take Too Long to Assuage Younger Partners. Because most modifications to the bulging retirement obligations firms face are phased, the financial strain on the firm and potentially felt by the next generation is not avoided immediately. That can mean an inordinate portion of the firm’s positive financial performance (at least in the eyes of younger partners years away from retirement) is allocated to retirees.  Will the younger partners accept a phase-in and hang around?

Eagerness to Invest Capital at Firms is not a Given. As senior partners retire and start recovering their capital, younger partners are afforded the opportunity to invest capital in the firm. Sure, it often is the sin qua non of a nice compensation package, but what if highly productive attorneys eschew partnership in favor of a contractual arrangement that requires no capital contribution. It happens now and may happen more often in the future.

Longer Vesting Periods Will Create Other Issues. Engineering the retirement benefits with longer vesting periods and the like may work in a firm’s financial model, but it could create a caste system among generations of lawyers. Moreover, in a market that competes for high value laterals or transformative mergers, the handling of “years credit” towards retirement plan vesting can be thorny. Many law firms will find that the vesting issue for new additions can have destabilizing ramifications.

Demographics are Trending the Wrong Way.  To the extent demographic trends make Social Security a bad bet, the demographic trends at law firms could be worse. The pyramid is dead and buried and signals a shrinking law firm workforce that will be expected to shoulder tomorrow’s retirement obligations. The numbers reported by Julie Triedmanin her The American Lawyer article Pensions Pose an Increased Threat for Some Firms, were not encouraging for law firms. There is little reason to expect them to have improved.

Many of today’s law firms are taking sound steps to address the progression of partner retirements. They simply have to. But as helpful these steps are to the long-term bottom line, they also may contribute to or fail to address some long-term implications that won’t be felt for years.   As you engage in retirement plan tweaking, are you addressing these long-term issues?


Focusing on Long Term Stability

Posted in Law Firm Leadership, Law Firm Repositioning/Turnaround/Restructuring, Law Firm Transition, Uncategorized

“Focusing is about saying No!”   Steve Jobs


I was reviewing an article regarding the 13th Annual America’s Best Corporate Law Firms study and was struck with how consistent the same names appear on this list — year in and year out. Even if you haven’t seen it, chances are you can name many of the firms that have a stranglehold on a position on this enviable list.

It begs the question for firms seeking to achieve a similar position — How did these firms secure their position?  And what will it take for your firm to capture a similar position?

The answer is simple……….. Focus

Firms that hold dominant market positions have found a way to align who they are and what they do on a daily basis with the market position to which they aspire.

Dominant law firms hire, spend, acquire, merge, and compensate based on one question: Does this investment align with our strategic focus?  If it does not, it eats away at the desired position…and weakens the law firm.

The path to dominance is easy to define in theory.  Identifying and navigating the right path for your firm is much more challenging in practice.  A thousand good ideas, disparate aspirations and diverse views combine in an assault against focused and disciplined decision-making.

Without unwavering focus on the desired market position, every good idea seems worthy of investment.  Any opportunity to expand can appear to support growth.  Every opportunity can seem to be a good one; however, at the end of the year you find yourself having made significant investments, but no closer to your firm’s desired market position.

And the discussion is not limited to aspirations of a position of market dominance. The principle applies to whatever your aspirations are. Without disciplined focus your odds of achieving what you would like to achieve are greatly diminished.

Here are the guideposts that lead to the aligned law firm…and will help you chart your firm’s course to stability, the profitability you desire, and yes — market dominance.

  • Identify the market position to which you and your partners aspire.  (You can guess…but this is most effectively accomplished through a series of interviews/discussions designed to identify your shared vision.)
  • Audit your expenses and define which move you closer to the position you desire.  (Whatever they are – office space, infrastructure, people — begin now to create an expense ledger that is devoid of the things that do not move you toward your desired market position.)
  • What is lacking…in terms of talent, location, support and infrastructure?  Build a plan that moves you from where you are today to where you need to be…and invest appropriately.
  • Consider each decision in this context – will this move us closer to the market position we’ve targeted?

Is your firm on its way to the top?