Managing Law Firms in Transition

Managing Law Firms in Transition


Posted in Law Firm Growth, Law Firm Transition

This is the second in a two-part series addressing one of the most costly and destabilizing realities of a law firm – the seemingly perpetual movement of lawyers from one firm to the next.

The first post on the subject  took a look at why and how to improve the lateral hiring process.  Today we turn our attention to an area that poses significant challenges — the integration side of the equation.

For purposes of our conversation, let’s assume that your firm has done all that can be done to ensure each individual and/or group tendered a lateral offer meets a strategic need and fits the culture of the firm.

Now comes the difficult part of growth by acquisition: devoting the time,  resources, and attention necessary to make each addition a successful one.  Where do we begin?

Once hired, statistics indicate that the quality of integration is the most significant factor in determining the success of the new relationship. This fact is supported by findings from a Major, Lindsay & Africa partner satisfaction survey which suggests that:

  1. Successful integration is the best indicator of lateral satisfaction;
  2. Given a demonstrated willingness on the part of partners to change firms, “…a firm’s failure to integrate a lateral partner often results in the partner moving yet again within several years.”

Put simply, quality integration is key to positive ROI in growth by acquisition.

How does a firm improve the integration process and experience?

To get the discussion started, let’s look at critical activity that should be incorporated  during a lateral hire’s first year with a focus on three important junctures:: pre-start; first day; and first year.

Pre-Start Activities

  • Leadership must create an enterprise wide understanding of and enthusiastic commitment to integration as a firm competency. This should include confidence in the the due diligence process as well as a grass roots belief that any lateral strengthens the firm’s strategic pursuits.
  • Engage a diverse group of existing firm personnel in the integration of every lateral hire. By diverse I mean (depending on the size and make-up of the firm) people from different offices, practice groups and strata of the organization; partner, associate, senior member, and administrative staff members.  The broader the connection to firm personnel — the stronger the connection to the firm and its culture — the better understanding new laterals have of how things operate, how to get things done, the stronger the bond.
  • As part of the offer process, document in detail all material expectations the lateral has of the firm and its support. Also detail specifically the firm’s expectations of the lateral including firm role, clients expected to transfer and level of personal work efforts. Cautionary note: experience suggests that word-of-mouth doesn’t get it done. Write it down.
  • Develop and agree to a plan that accurately maps the transition of the lateral into the firm. Again – talking about it rarely works. Write it down — with specifics as to the ramp-up of the candidate’s practice.

Start Date

  1. There is one and only one start date. It is a wonderful and often overlooked opportunity to make a lasting impression on the new addition. Day One should present the best possible snapshot of the firm’s culture. The lateral should be warmly and enthusiastically greeted. There is much written about the various components of quality orientation programs which I won’t repeat here. Suffice to say, you’re investing significantly in on-boarding a lateral; plan appropriately, and take the time to make the experience reflective of the investment.
  2. Assign a single point-person as primary contact and connection for integration purposes.
  3. Introduce the integration team. (If your firm does not have an integration team, the formation of such a group should be added to your pre-start activities.)

First Year

  • Create some buzz, make clients of the firm and clients of the lateral aware of the move and the new capabilities brought to each. Make the general market aware.
  • Regularly and openly monitor the practice integration plan, and directly discuss any slippage. Regular quarterly checks are essential. In the case of a situation that isn’t developing as expected, the first quarterly check will reveal a lot. If the practice is failing to develop as planned it should be abundantly clear by the 6 month mark and the firm should actively address options…including a strategy for smooth separation, should the trend continue.
  • Don’t forget to integrate other members of the group (secretaries, paralegals etc.)
  • Don’t forget to integrate spouse and family if applicable. To the extent the firm has spouse or family events, these are wonderful opportunities to strengthen intangible but nonetheless valuable bonds between the new hire and the firm.

This is not rocket science. You can no doubt add to this list of integration activities. But it does require some attention to detail. What would you add to the list of activities? Given the significant investment firms make in growth by acquisition, what else might we do to maximize the investment?

Five Key Metrics for Grading Your Law Firm’s Annual Performance

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

A law firm report card is a good thing.  Much like a child’s school report card telling a parent how school is going, a law firm report card can inform firm leadership about its progress, shortfalls, and areas that need improvement.  In these days of industry disruption and heightened competition, periodic assessments can give a firm direction that it otherwise might not have.

Taking stock of a firm’s performance can be done at any time-it need not wait until a fiscal year’s close or only be an annual affair.  Simply put, making sure the review gets done is more important than when it is done.  Equally important is the need to review things that are probative of a firm’s health.  Focusing on irrelevant markers can not only confuse leadership about a firm’s well-being, but it can be waste of time.

While a firm’s performance can be measured by any number of relevant facts, the following five metrics can help many firms assess their annual performance:

Financial Efficiency.  Financial efficiency encompasses a lot of things but in essence it examines a firm’s financial health as measured by revenues, profitability, debt levels, margins, productivity, rates, realization-basically everything that impacts a firm’s financial standing.  Because there are many different kinds of firms, the exact financial measurements will vary from firm to firm.  But the importance of a frequently graded financial performance to the longevity of a firm cannot be underestimated.

Client Intake.  The lifeblood of any firm is its clients and the ability to replenish them when some clients are no longer around.  Pick any period of assessment and examine the firm’s success in landing new clients to see how the firm is doing.  It takes a lot of work and much effort to get clients.  If the firm has been light on success in this area, attention needs to be dedicated to fixing any flatness or downward trend.

Matter Openings.  A key measurement of a firm’s success is its ability to open new matters for existing clients.  Nurturing an existing client base often is overlooked by firms in their quest to land new clients.  Indeed, using an existing client base to expand a firm’s workload is a natural strategy that many firms acknowledge but do too little to make happen.  Every firm should assess its performance in expanding its existing client base by knowing the number of new matter openings for existing clients.  An annual grade helps guide a firm towards curative action needed, if any.

Unwanted Attrition.  Law firms are in the talent business.  If it has great lawyers and staff it likely is doing well overall.  A loss of some of those key players can negatively impact a firm’s performance both in the short and long terms.  The challenge to staying on top of the talent game often comes from unwanted attrition.  In the recent past, has the firm lost lawyers and staff it valued? Assessing recent attrition is one way to grade recent performance.

Professional Growth.  A firm that allows its professional growth to stagnate is not going to do well over the long-term.  An attitude or culture of “suit up and show up” will deprive a firm of the needed energy and will stifle its professional development to its detriment.  Continued professional growth by becoming thought leaders, bar association leaders, or the “go-to” lawyers for important substantive issues is something a firm should strive for.  Anything short of a commitment to professional development limits a firm and encourages others to pass it by.  Assessing the professional growth of the firm in the most recent reporting period is critical for the long-term health of the firm.

Bringing the report card home was a time of trepidation for many a kid because it was a time of accountability.  For law firms, grading performance through objective and critical eyes likewise brings accountability-in this case to leadership and the firm as a whole.  If you were awaiting a grade for your firm’s recent performance, would you be nervous?



Slowing the Churn – Rethinking the Acquisition Side of Law Firm Growth

Posted in Law Firm Growth, Law Firm Transition

I think the acquisition of consumers might be on the verge of being mapped. The battlefield is going to be retention and lifetime value.

Gary Vaynerchuk

 Growth through acquisition — individuals, groups or full-blown mergers — has become a norm within the legal profession.

Doesn’t the record suggest it is time we ask whether the normal approach to the process does justice to the parties involved, and serves the industry well?

At the outset we should stipulate that there are two important things to understand when considering the relative effectiveness of growth-by-acquisition:

— First, good or bad, this path to growth is here to stay; and,

— Second, at its best, it has been a hit-and-miss proposition.

So, this post is not about whether growth-by-acquisition is sound. Rather, what might be done to cause the strategy to be more successful?

There are two keys to successful acquisitions. And, while conceptually simple, they are (clearly) difficult to execute.

  1. Improving the quality of the acquisition process (the topic of this post)
  2. Improving the integration of those acquired (the subject of next week’s post)

Improving The Process

Three things will improve the quality of the acquisition process:

  1. Begin with Strategic Targeting
  2. Test to ensure Cultural Alignment; and,
  3. Quality Due diligence.

Strategic Targeting

In its simplest terms, a strategic hire is one that fills a need previously identified. A need identified as important to the firm achieving long-term aspirations. An unfortunate number of lateral hires were never previously targeted but were justified by the non-strategy of “being opportunistic.”

By contrast, strategic hires which significantly increase the probability of being successful will meet one or more of the following criteria:

  • Fulfill an expressed client need in terms of technical capability or geographic presence.
  • Meet diversification objectives previously identified for a practice and or geographic area.
  • Add depth and expertise in an area that the firm has identified to further strengthen itself

Cultural Fit

Lack of cultural fit is high on the list of reasons for lateral hiring shortcomings and failures. Presuming all involved in the hiring process have a solid understanding of the firm’s culture and values, discussions should be specifically designed to identify the candidate’s relevant make-up.

During the interview and courting process, it is important that a candidate be exposed to a diverse sampling of the firm. For multi-office or practice firms, exposure to those outside of the office and/or practice group in which the candidate will reside provides an independent and important perspective.

Due Diligence

So often, there are practice and professional surprises associated with the newly added partner or group.  Disciplined and in-depth due diligence that goes beyond the desire to add an individual or group to the headcount will minimize surprises. Consider the following as steps in an effective due diligence process:

  • Review statistics from existing/predecessor firms for a minimum of 3 years of performance history;
  • Investigate the history of actual or threatened malpractice claims;
  • Obtain assurance of client intent to transfer work;
  • Analyze exposure to “unfinished business” claims;
  • Confirm employment history;
  • Check references (it is surprising how often this step is skipped);
  • Confirm bar association standing.


Testing of cultural fit, conducting appropriate due diligence and hiring strategically will dramatically improve the odds of a successful hire. Now, to further improve the odds of long-term success we turn our focus to integration. Next week’s post will focus on integration.


What would you add to the above list?


When a Law Firm Grows Up-Five Steps to Maturing Well

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

Sometimes it is as simple as two lawyers acting on obvious synergies and a law firm is born.  Once the firm is birthed, the days are heady ones as basic startup chores are mixed with the never-ending pursuit of clients, doing good work and building an enduring reputation.  Coming up for air can almost seem a luxury-there is too much to do and little time to do it.  Done correctly, however, opening a firm can be as satisfying as it is exhilarating.

At some point the onslaught of responsibilities becomes manageable.  There is time to take a breath (or two) and the firm begins to evolve from startup to a mature institution.  But just like when getting the firm started, making the right moves post startup are no less critical.  For the law firm that fought so hard to get established, finding the right steps for the future cannot be underestimated.

Evolving a firm into a more mature institution requires focus and commitment.  Based on experience, five areas of concentration can aid law firm leaders in the evolutionary process.

Processes and Procedures.  When a firm opens, processes and procedures often are neither needed nor wanted.  Good results come from action, not process.  But as a firm matures and stability conjures up thoughts about the future, creating scalable processes and procedures is necessary for a firm to leverage changes in firm size, makeup, locations, and practice sophistication.  An evolving firm will be difficult to manage and not likely to thrive if uniform processes and procedures aren’t in place.

Financial Sophistication.  A startup firm’s financial systems generally need not be too complicated.  Work gets done, bills go out, dollars are collected, and vendors, employees and owners get paid.  But as a firm matures and/or grows, ramping up its financial tracking, reporting, and analytic tools becomes very important.  Managing a maturing practice requires greater financial sophistication.  When taking a firm to the next stage, leadership should invest in improving its ability to understand the financial signals it inevitably receives.  Failing to do so will leave a firm constantly playing catch-up and cause too many of its decisions to be based on guesswork.

Talent.  Talent is a priority in law firm success, and it is never more important as a firm evolves from startup to established institution.  Any momentum a firm enjoys through its formative years can be lost quickly if it loses talent, can’t attract new talent, or harbors within its ranks less than talented performers.  Exceptional people make exceptional firms.  For a firm hoping to endure long-term, a focus on talent is essential.  A misstep or two can be debilitating.

Proactivity.  Starting a firm can be action packed while at the same time a little reactive. In the early stages of a firm’s life, it is common for unforeseen developments to be addressed on an ad hoc basis.  Once a firm is established, however, it is time to exert greater control.  As maturity is reached, every firm should proactively take steps that contribute to it’s the likelihood of success.  A firm proactively seeking to generate client relationships, improve its expertise, grow its reputation, or stimulate its financial outcome will achieve far better results than one that allows a reactive management style to continue.

Planning.  When a firm is first getting started it often operates off a basic but not particularly sophisticated plan.  But because any early stage plan is drawn on a clean sheet of paper, it can often go awry and require revision, adjustment, and sometimes abandonment.  Unlike a firm at the startup phase, however, a mature firm will have years of operational experience, trends and performances on which it can plan for its future.  Indeed, historical data and information should allow a firm’s plan to extend over a number of years.  For that reason, every mature firm seeking success should embrace the idea of planning and impose a discipline to make it happen.

Managing and succeeding at a maturing law firm can be different from the startup experience.  Bringing the right focus is essential.  As your firm matures, are your leaders attentive in the right areas?



Law Firm Health in Turbulent Times

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

Strength and growth come only through continuous effort and struggle. – Napoleon Hill

As the economy begins to show signs of volatility, it may foreshadow risk for many law firms.   Additional market disruption may lead to challenges for firms of all sizes and in most practice disciplines.

In a Forbes article, Basha Rubin suggested that we might be seeing the end of the mid-tier firm. Rubin’s reasoning is that the growth of in-house counsel staff and their use of temporary legal resources to manage a fluctuating workload is likely to hit the mid-tier firm particularly hard. That may be true but we see emerging challenges for firms from small to large.

Step Away From The Ledge, And Remember What It Takes To Maintain Stability

There is no denying that an increasing number of forces are creating pressure on many firms; and new uncertainties in the economy may become an additional one. However, the fundamentals of what it takes to maintain a successful practice remain the same – for firms of any size. Here’s a quick primer.

  • Manage obligations to a low and sustainable level. This means:
    • Not committing to expensive (and extravagant) office space. Resist the siren song of that newest office tower – and the long term lease and increased fixed-cost-per-lawyer that comes with it.
  • Limit hiring of permanent lawyer and support staff until an extended and reliable need has been established. In the interim, learn to rely on part time, and temporary resources.
  • Focus your practice on an area of law for which you have a passion, and for which there is a significant demand.
  • Strengthen and expand your relationships. This means the network of those that you have a direct relationship with, and those that can be developed in person or increasingly through social media.
  • Do work of a quality that will bring clients back, and turn them into referral sources.
  • Maintain (or initiate) a rigorous process for client feedback and conversations that transcend specific matters or projects. This is increasingly central to long-term, stable relationships.

Success is not about size. In fact, solid growth and profitability are not dependent on or guaranteed by the addition of people, offices or the obligations that accompany them.

Success and stability are about purpose, passion, wise management and a relentless focus on nurturing and growing your network.

Its Merger Season-Five Reasons for Your Law Firm to Think About Merger

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

Tis the season, but holidays are not involved.  Rather, market forces, activity and trends confirm that law firm merger is on the minds of law firms.  While mergers once seemed to happen mostly around the start of the year, the complexity of the merger exercise means mergers can happen at any time.  And even for the many law firm mergers that happen to close around year-end or as the year begins, there is no doubt that the courting, planning, and negotiating that goes into a consummated merger occupies many months of the year.  In reality, law firm merger season never ends but runs from January 1 to December 31 every year.

Despite the heightened number of mergers recently, the impactful act of merger is not for every law firm.  Pursuing merger “because everybody’s doing it” is a misguided take on what should matter to firms thinking about their future.  Only if merger strongly supports a strategic firm imperative should the idea of merger be considered.

For the law firm unsure about merger, there are at least five reasons it may be worth considering.

Client Driven.  When the retention or expansion of client relationships requires the addition of more substantive practice areas, greater bench strength, or an ability to serve clients in ways the present profile does not allow, merger may offer a solution.  A merger can deliver a turn-key solution to greater client needs that may not be possible through organically developing needed skill, depth, or alternative practice approaches.  A client with unsatisfied needs may not be client for long, so meeting those needs through merger is a solution to consider.

Geographic Imperative.  Much like the client driven reason for merger, distant markets can beckon a firm to geographically expand through merger.  A merger into a far-away market can further the success of an existing practice area, a firm’s attempt to focus on an industry already served by a firm’s local lawyers, or a client that has expanded away from a firm’s home base.  Moving into a market not currently served can meet a firm’s strategic need.  If so, it may be wise to consider merging with an established firm in an outlying market that helps execute a firm’s strategy.

Platform Improvement.  A firm may find itself swimming upstream when it comes to practice innovation, law school recruiting, lateral hiring, retention, and winning beauty contests.  These disappointments often have less to do with a firm’s intrinsic worth but more a matter of available resources and perception.  A merger can deliver an enhanced platform that instantly provides needed wherewithal and changes perceptions.  Instantly lawyers and their firm can seem more innovative, more attractive at law schools, pleasing to lateral candidates, more immune to attrition, and “in the game” at every pitch.  A firm tired of finishing second may have a platform problem that can be solved through merger.

Need for a Lifeline.  Some firms wait too long to tackle platform deficiencies and cross into the dreaded zone of crisis.  For these firms, a merger may smack of desperation, but it also may be a matter of survival.  A firm leering over the precipice may have an excellent reason to consider merger.  And while negotiating a merger while weakened is far from ideal, there may be no other or better alternative.  If a firm needs a rescue, it may seriously want to consider merger.

Succession.  Law firms everywhere have inadequately prepared for succession.  Whether the failure of planning pertains to leadership or client succession, it can leave a firm at risk.  Unfortunately, shortcomings in planning succession can take a number of years to correct if done organically.  The long road of organic succession can be complex, subject to fits and starts, and subject to unforeseen developments.  Firms facing succession challenges that do not have the luxury of time or the confidence to implement an organic succession plan may view merger as a good solution.

Merger is not right for every firm or suitable in all situations.  But in a number of instances, like the ones discussed above, it can be an effective solution.  Based on how things are at your firm, should it consider merger?

Is Your Law Firm Exposed to Theft?

Posted in Law Firm Growth, Law Firm Leadership, Law Firm Warning Signs

Time and time again the news includes another report of a law firm (most often small to medium in size) having been ripped off. The dollar amount involved in a majority of the reported thefts is a few hundred thousand, but  in some cases millions of dollars have been misappropriated. In what I consider the most unfortunate of cases, the missing funds weren’t the firm’s but funds belonging to firm clients.

How does this happen?

Recently I was reading of yet another case involving the misappropriation of cash by a trusted employee who, in retrospect, shouldn’t have been.  It dawned on me that a refresher course (or perhaps an introduction for some) on basic internal control “blocking and tackling” might be in timely.

As firms grow it is common to put off, or in far too many cases not even consider the appropriate checks and balances necessary as cash related responsibilities are delegated. Basic business measures are intended to decrease exposure to theft and fraud and, at the same time, minimize the possibility of errors.

Absent these business safeguards, it is easy to wake and find your firm the victim of someone all-too-willing to take advantage of your trust and a system that is far too easy to hack. A relatively simple system of internal controls can provide significant protection, and decrease the risk that your firm will fall prey to someone that doesn’t deserve your trust.

A thorough discussion of appropriate internal controls is beyond the intended scope of this post; but consider the following primer.

The Basics of Protection

Segregation of duties

As a small law firm grows — both in terms of number of individuals employed and revenue generated — there is an ever-increasing demand on the time of the owner(s). The resulting tendency is to delegate activities related to receiving and accounting for funds, as well the approval, payment and accounting for payments related to obligations of the law firm.

As the volume of work delegated grows, separate individuals should have responsibility for authorizing, making and accounting for payments.

Additionally, different persons should have responsibility for opening mail, depositing payments and accounting for their receipt.

Limitations on authority

One approach to decreasing exposure is to apply limitations to authority. For example, many firms require two signatures for payments that exceed a certain threshold such as $1,000. This is not about trapping a dishonest employee; it is about installing smart checks and balances around judgements and decisions that can be pivotal in nature.

Transaction review

 A firm owner should receive, unopened, the firm’s bank statements, and review them on a monthly basis. The simple fact that the statements are being reviewed will prompt a more deliberate and considered decision-making process.

For firms with two or more owners, it is smart to separate responsibilities, having one owner authorize payments (coupled with a requirement for two signatures), and another review the bank statement.

Budget/financial planning 

An annual budget reflecting anticipated expenditures and receipts is a tool that helps to minimize exposure. A monthly review of actual to expected performance will identify unplanned and perhaps inappropriate transactions.

Mandate vacations/job rotation 

A practice of forcing a continuity break by mandating vacations away from the office (and away from access to the firm’s financial systems) has a significant impact on decreasing temptation and exposing inappropriate activity. A system of rotating responsibilities associated with cash related functions has a similar impact.

External audit

Contracting with an independent accounting firm for an audit of the firm’s books is a very healthy practice. Much like other aspects of an effective internal control system, employee knowledge of the fact that periodic audits occur will decrease the likelihood of a problem.

Implementation of any of the above will result in a more secure operation; but a professional review of your firm’s financial processes and controls is most appropriate and is recommended.

How are your internal controls

Getting Ahead of the Game-Four Thoughts About Operating Successfully in Today’s Market

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


Every year about this time some of the major research and analytic minds focused on the legal services industry publish their annual reports or studies.  Citi Private Bank/Hildebrandt Consulting LLC’s Client Advisory was released on December 14, 2017 and contains a wealth of information and perspectives about what happened in 2017 and what might be expected for 2018.  The Georgetown Law/Thomson Reuters/Peer Monitor 2018 Report on the State of the Legal Market likewise is full of data, analytics and thoughts about the transforming legal market.

A third renowned resource, Altman Weil, Inc., publishes its always anticipated Law Firms in Transition Survey with its 2018 edition to arrive sometime this spring.  While the market waits for the Altman Weil 2018 Survey its 2017 Survey contains important information and perspectives that are valid today, especially when digesting the Client Advisory and the 2018 Report on the State of the Legal Market.

Each of the foregoing advisories/reports/surveys are commended for your review.  While each presents information worthy in its own right, a portion of the 2018 Report is particularly interesting for firms thinking about the challenge faced for 2018.  For any law firm leader searching for guidance for the future, it provides useful perspectives.  In the 2018 Report, there are some key takeaways worth noting.

Be Proactive.  The 2018 Report cites to evidence that successful firms meet client needs through changed service delivery approaches prior to being told by the client that a change in delivery is desired.  Proactively focusing on staffing, pricing, work-flow, and technology tools as a means to deliver better legal service is not only appreciated by clients, but it helps law firms seize the initiative about a discussion that is inevitable.  Making your firm more responsive to client need prior to the client feeling compelled to raise concerns not only helps a law firm frame the discussion with the client, but the time a firm takes to develop its proactive approach makes it more fully informed about the important issues at play.  Being proactive on the important elements of legal service delivery likely will improve a firm’s performance.

Don’t Fret About a Firm’s Size or Market.  The data cited in the 2018 Report indicates that the success of the proactive firms does not depend on their size, their market location, or even whether their accepted rate increases exceeded the rate increases of the less successful firms.  According to the information cited in the 2018 Report, focusing on improved legal service delivery transcends issues of law firm size, market location, or any implication that more successful firms are simply blessed with better clients more willing to accept higher rate increases.  Rather, the fundamentals implemented by proactive firms dutifully focused on the correct issues delivered results regardless of common conceptions that dramatic results are only enjoyed by AmLaw top 25 law firms dominant in money center or prime commercial locales.

Resulting Improved Communications Improves Results.  An apparent by-product for proactive firms is that they believe in what they have to offer and communicate about it with their clients upfront.  Having thought through a dynamic proposal leads to a willingness to discuss and defend it with clients at inception rather than waiting until later.  After all, a new proposal intended to replace the status quo must be vetted with the client before it can be implemented.  Clear communication at the outset greatly reduces misunderstandings, establishes clear expectations, and is more likely to put law firm and client on the same page.  The outcome is predictable.  Communication as the work begins improves realization and speed of collection.  Simply put, good communication is worth its weight in gold.

You Have to Spend Money to Make Money.  Proactive firms not only focus on improved service delivery, but they realize success depends on a commitment to investing in the present and in the future.  Well placed dollars invested in business development training may increase a firm’s overhead, but among the more successful firms that kind of investment frequently pays dividends.  Similarly, firms showing better results often are more willing to invest in technology to improve their service delivery, staffing strategies, pricing models and work-process improvements.  Proactive firms enjoy success not because they pinch pennies better than peer firms, but because they spend money on needed investments wisely.

In the legal services industry, the drumbeat of change pounds incessantly.  As the 2018 Report suggests, relying on the status quo is not the way to address any percussive annoyance. Can your firm take the initiative and modify its operations to enjoy greater success in 2018?

Failing Strategies and Law Firm Success

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

I recently finished a review of the 2018 version of the Georgetown University Law Center’s Report on the State of the Legal Market. Although the report contains numerous quantitative facts reflecting continued struggles for the law firm services market (falling productivity, realization and profit margins), I was intrigued by the commentary regarding strategy.

The report addresses the tendency to follow or even double down on strategies that are failing.

When thinking about goals and the development of strategies to achieve them, it is a bit like selecting one of the numerous routes available to a specific travel destination. It is typical (and advisable) to evaluate progress, and change plans if the chosen route is found to be blocked or includes unreasonable delays.

Unfortunately, the norm for many businesses, including law firms, is to re-double efforts when chosen strategies are not providing the projected progress towards the realization of goals.  The report details several reasons for this tendency including these three (paraphrased) reasons:

  1. Commitment Bias – As an organization invests time and money in strategies, it is predisposed to value those strategies more highly — “in for a penny, in for a pound.” We see this time and time again as firms continue to pursue approaches that are not yielding desired results. The investment one has made in an initiative should not be the deciding factor when it comes to making future investments. An objective evaluation of progress is the mark of leadership.
  2. Finish-What-You-Start-Syndrome – Most of us have been programmed since we were children to stick with what we have started until we have completed the task. Somewhat like commitment bias, this approach to strategy often makes little sense. Once we determine that what has been started no longer serves our purposes, the effort should be terminated.
  3. Ego/Face Saving – Finally, all too often firm leaders become far too personally vested in a strategy. To change course, abandon the failing strategy and start anew feels like failure. However, the effective leader operates in the best interest of the firm, and is not afraid to change course when necessary — no matter the degree to which they are personally identified with the strategy.

Routine monitoring of progress is the key to identifying and challenging strategies that are not serving the firm. Any strategy should include a series of actions and specified interim progress milestones. As time passes, with benchmarks failing to support targeted milestones,  the strategy itself should be increasingly questioned.

The Georgetown report provides some great insights into the state of the profession and some very good additional perspectives on failed strategies.

For those interested in other readings on law firms and ways in which leadership can address the challenges of transition, see here.

Five Steps for Preparing Your Law Firm for a Great Future

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

Predicting the future of the legal services industry is no easy task.  The complexity of its landscape makes divining next year, let alone the coming years, difficult.  Prophesying about the future, however, is not simply an academic exercise.  It has practical importance because firms must develop sound strategies that can help assure future success.  For that reason, law firms need to think about the future and their approach to sustaining themselves as the years unfold.  But without a crystal ball, how can a firm adequately prepare for what lies ahead?

Looking at recent law firm performance and emerging tendencies is a good start.   The 2018 Citi Hildebrandt Client Advisory just released is one resource that can be used to observe industry activity and best practices.  The Advisory includes information and performance data that identifies recent shifts among legal service providers.  Not only does the Advisory study those currents, but it goes on to make some high-level suggestions about preparing for the future.

Even with these insights or those of other thought leaders, most law firms are looking for actionable steps that can address the shifting paradigm.  While nothing about the future can be certain, there are at least five measures that law firms can take to prepare for the years ahead.  Indeed, if these steps are followed faithfully and with discipline, the foundation for a great and lasting law firm can be built.

Focus on Acquiring and Retaining the Right Talent.  Successful law firms in any age have talent throughout.  In the future, acquiring and retaining talent will take on more importance than ever.  A law firm preparing for the future will focus on having uninterrupted premium talent at all levels of its professional ranks (e.g., partners, senior attorneys and associates) and the non-attorney ranks, whether the non-attorney management team, marketing personnel, technology team, or pricing officers.

Focus on Managing Your Talent.  Just acquiring talented people will not sustain a firm if those people are not managed to achieve their best.  Processes, procedures and coaching should be used to foster opportunity, personal and professional development, and accountability.  Any law firm focused on managing its talent will create an environment that directly benefits the firm as an institution and stimulates the satisfaction of its people.  The future will be littered with law firms that take its people for granted.

Take Succession Seriously.  In the coming years many firms will be challenged by leadership and client relationship succession.  Firms that focus on succession will treat it as a multi-generational challenge that must be mastered. Today’s associates and mid-level attorneys are just as important to preserving a law firm as addressing baby-boomer transition. A top to bottom focus on succession will create a culture more likely to help a firm endure.

Make Service Delivery More Efficient.  The growing competition among legal service providers (including law firms) is driven by client desire for quality, value and speed. Law firms preparing for the future will do more than strive for excellence, reduce rates, and turn work around quickly.  They will instill a mindset that thinks originally and creatively about service delivery. Because client expectations will be ever evolving, creating a culture of innovation will be a cornerstone to client satisfaction about service delivery.

Embrace Technology, Systems and Ideas.  It is partly through technology, systems and ideas that law firms will transform themselves for the future.  Ironically, leveraging these things will bring the firm full circle back to the issue of talent.  A law firm that nurtures its lawyers and other personnel to think like their clients and react to the economy in which the clients compete will use technology, implement systems and encourage ideas in order to improve performance. Law firms that understand the role of technology, systems and ideas in their clients’ success will enjoy success themselves.

Gone are the days when law firms could operate with a “business as usual” attitude.  To endure in the future, more is required.  Is your law firm doing more?