Legal industry veteran Eric Fletcher takes the view that law firms perpetually are in transition. Certainly, in the changing legal environment that has existed since 2008, transition among law firms is common. Law firms in transition can face any number of business altering decisions, whether they be fundamental adjustments to its business strategy, considering merger, implementing layoffs, pursuing aggressive lateral hiring, facing crisis or winding-up and closing.
When it comes to any kind of transition, timing is critical. A recent series of interviews with Al Togut and Joff Mitchell, key players in the Dewey and Patton Boggs transitions, touched on the need for law firm leaders to face reality sooner rather than later. A law firm leader that “gets his or her house in order” when the first signs of trouble surface stands the chance to avoid a Dewey disaster and realize a Patton Boggs or better result.
Not all law firm transition results in such game changing outcomes like a law firm failure or merger to survive. Indeed, the nature of law firm transition can mean any number of alternatives along the law firm decision maker continuum. The relevance of “timing” is that important decision points recognized early can allow a law firm leader the luxury of having the greatest control over the law firm’s destiny. Procrastinating, lacking decisiveness or failing to recognize an existing or impending transitional point can narrow a law firm’s options and squander firm sustaining opportunities.
Procrastination and indecisiveness represent failures in leadership. Finding an alternative leader may be the best remedy for those two problems. But a lack of recognition can befuddle even the best leaders and changing out leadership is not usually the best solution. Rather, all law firms and their leaders can deal with the challenge of recognition by exercising a vigilant discipline designed to identify the advent of transitional events, developments or trends. To exercise the necessary vigilant discipline, a law firm leader should focus on four areas to heighten early recognition of potential transitional events.
Internal Performance. For any number of reasons, law firm leaders commonly pay attention to how the firm is performing internally. Tracking internal performance traditionally is used to aid in short-term decisions. But the same data and trends in that data should be viewed to forecast the potential for business altering events or developments.
Client Performance and Preferences. Without clients law firms can’t exist. Following the performance of clients and the trends they face provides a good barometer on how your firm may fare in the future. If clients are undergoing changes, your firm should be prepared to react-whether it means finding new clients or serving your existing clients’ needs in a different way. Moreover, clients’ demands or expectations may be changing. Today, reports are more common of corporate general counsel looking to other law firms on the basis of price. It is imperative that those changes be recognized and, if appropriate, responded to.
Industry Trends. Following the initiatives of other law firms, especially your competitors, is always helpful. The “best practices” of the most successful firms can be very instructive. Even the strategies of less respected law firms can be useful to observe. From tracking the industry, a law firm leader will have greater context when thinking about his or her law firm’s performance and the steps needed to move it forward.
Industry Challenges. The industry is ever evolving and these days faces challenges from non traditional legal services providers, more efficient delivery systems and in some sectors, greater competition fomented in part by price wars and a glut of lawyers. Any leader wanting to direct his or her firm into the future will be fully aware of these current industry challenges while looking for others. Not all industry challenges require a response, but being aware of the surrounding world is critical to recognizing the advent of transition.
Telling a law firm leader that he or she needs to move develop a response when a transitional event is burgeoning is not all that helpful. It is more helpful that the leader exercise vigilant discipline so that the transitional event is recognized. Without adequate recognition, effective action in response is impossible. In your experience, are there other tools to assuring timely recognition?