As an interested observer of the legal landscape, there are three baseline realities that are especially interesting to explore:
• The rapid rate of law firm growth through mergers and lateral additions;
• The rate of law firm failures; and,
• A continuing level of unhappiness in the profession.
Given these three somewhat extreme data points, one wonders the extent to which the leadership of law firms proactively evaluate the choice of better versus bigger.
I have been reading a new book by Bo Burlingham – Small Giants: Companies That Choose To Be Great Instead of Big. The book is an in-depth review of companies that have confronted the issues of getting bigger or better.
The book is describes as an examination of “extraordinary, privately owned companies that made strategic decisionos to forgo revenue or geographic growth, in order to achieve other remarkable ends.”
I recently ran into an interesting example of the type of company Burlingham wrote about. Cousins Kevin and Chad Brown grew up working in their dad’s construction businesses. By the time they reached their early 20s they decided to start their own construction company, Brown Construction in NE Texas, focusing on framing new and remodeled homes. The guys had two goals: to establish a new level of quality for their type of work; and to have fun together.
As often happens when quality and competence come together, success followed. The guys experienced the typical new business challenges including wondering where the next project would come from; but as the growing pains subsided, the duo realized they had more business than they could handle.
After talking about it, Kevin and Chad decided to split their group in two and add a few more crewmembers and further grow their business.
What the cousins found was that their work product, when working separately, wasn’t as high as when they were working as a team. They also found that they weren’t having nearly as much fun.
Kevin and Chad did what few in their position have the clarity of vision to do; they decided to forgo the addition revenue and profits associated with a bigger business, and — instead — limit projects to those that they could handle while working together.
• The cousins’ reputation for high quality work continues to grow;
• They continue to land increasingly interesting (and profitable) projects; and,
• Their customers have beome raving fans.
Theirs is an all too rare example of choosing to get better instead of bigger.
Law firms, young or old, would be well served to stop and determine what is most important to them. And possessing that knowledge, routinely evaluate growth related opportunities.
Smart decisions are much more likely when framed in the context of what we care about.
I’m betting that if this simple process were followed we would see a lot fewer mergers, a lot less lateral movement, and many more lawyers who genuinely enjoy their work.
There is a lot to be learned from the cousins Brown, a law firm considering merger should not lose sight of what made it great and only pursue merger if those fundamentals can be preserved.