Some recent news and commentary drives home the idea that the legal industry and its law firm participants are facing transition. Jennifer Smith of The Wall Street Journal reported that more law firm clients are insourcing-taking in work heretofore performed by outside counsel. That development, by some accounts impacting large law firms in particular, occurs at the same time that Bingham McCuthen and Morgan Lewis and Bockius have announced the intention to merge. Given Bingham’s travails over recent years, speculation abounds about what will happen to it if the merger does not close. If one thinks that it is only big law that faces challenge, Basha Rubin of Forbes offers the view that insourcing will impact mid-size firms more than the larger firms. Ms. Rubin’s The Business of Law: Is the Mid-Tier Law Firm Dying[?], posits that insourcing could spell doom for the mid-sized law firm.
Whatever a law firm’s size, or its past commitment to aggressive growth like Bingham, the ability to withstand the strains of a transitional market comes down to strong leadership and sound strategy. The presence of both can avoid crisis exacerbated by a legal market in turmoil. When challenges exist due to a gurgling market, strong leadership and sound strategy can prove critical to future success and, in some cases, survival.
The characteristics of strong leadership and a good strategy can be and are often debated. But five fundamentals, if followed, are little things that can greatly aid a law firm during these times of transition. They are:
Develop a Long-Term Plan and Stick to It. Hopefully your firm has developed a long-term strategic plan after careful and thoughtful consideration. If such a plan does not exist, get one. But any long-term plan’s value is undermined if it is cast aside in favor of the latest trend. So develop a long-term strategic plan (sound strategy) and have the discipline to see to its execution (strong leadership). If it begins to appear flawed, recognize the flaws, rethink the plan to make necessary fixes and create a new long-term plan. It likely will represent a tweak of the earlier plan, not an entirely new direction. Above all, don’t manage “on the fly.” It will only disappoint.
Emphasize Your Strengths. Face it, not every practice area at your firm is a world-beater. Play to your strengths and consider phasing out anything that is weak or not critically complimentary to your strengths. As Basha Rubin writes, as do others, specialization allows you to distinguish yourself in today’s ultra-competitive world. In contrast, little that a generalist does is unique.
Recognize that Growth is Neither a Solution Nor a Strategy-It is a Tactic. Refrain from thinking that growth itself is a great plan. Too often growth plans are viewed as a strategy that solves problems or stimulates opportunity. Unfortunately, growth is mostly a tactic, not a strategy. If growth implements a firm’s strategy, great. If not, it is action packed but aimless.
Understand that Not All “Best Practices” Suit Your Firm. Another law firm’s success with an initiative does not mean it is something to be emulated. Studying industry best practices is good, and thinking about them introspectively is better, but implementation should only happen if the fit is right.
Be True to Your Firm’s Culture. Trying to be something you are not is destined for disaster. A firm that has a distinct culture should manage, hire and practice consistently with that culture. If lateral hiring occurs, leadership should give as much attention to integrating the new hires as catching them. Integration means inculcating the additions into the firm’s culture. They will benefit, your legacy people will benefit and the firm will benefit.
Strong leadership and sound strategy are like motherhood and apple pie. They are things everyone likes. But in these times of transition, will your firm do the little things to assure the needed leadership and strategy?