Dentons and McKenna Long recently announced the intent to merge. Media reporting of the merger was substantial, including an April 8, 2015 article written by Sara Randazzo in The Wall Street Journal. In her Dentons, McKenna Long to Merge, Ms. Randazzo quoted Denton’s global chairman Joseph Andrew as stating, “[O]ur goal was not only to make sure we can grow, but to demonstrate the importance of momentum.” Mr. Andrew also noted Denton’s position in the competitive landscape by stating, “[W]e compete with everyone. We compete with the largest law firms in the world and the smallest law firms.”
To be fair, the Journal’s reporting on what Mr. Andrew had to say may not have covered all the strategies driving the McKenna Long deal. Being accurately quoted about the reason for the transaction and the firm’s place in the marketplace still may not have described adequately Dentons’ strategic considerations. But when given the opportunity to explain the deal’s rationale to the Journal, the impression Mr. Andrew left was that Dentons’ growth was all about, shall we say, growth. Without more, Denton’s justification for its expansion seems a tad underwhelming.
What is Behind Dentons’ Growth? Our firm hasn’t worked with Dentons so we are left to wonder what is behind its expansion strategy? Ms. Randazzo’s article prompts us to think about the possibilities.
· Nothing was stated (or at least reported) about Dentons’ desire to improve client service. Service improvement is likely important to Dentons and the expansion may further that goal.
· Nothing was said about expanding its substantive specialties so as to achieve a first-in-class capability that leads to market dominance. Although not cited, such motivation certainly could be behind Dentons’ growth.
· Nor was there a mention from Mr. Andrew about improving efficiency of legal services as a predicate to delivering greater value to clients. It too could be a strategic imperative behind merging with McKenna Long.
· Dedication to growing client relations was not mentioned either, but it also could underlie Dentons’ commitment to growth.
· And while maintaining uniformity of quality levels can’t possibly drive expansion, Denton’s silence about its plans for maintaining professional quality throughout its many offices does not mean that it isn’t an unspoken non-negotiable for the firm.
Strategic Growth. Some may argue that growth is more of a tactic than a strategy. As Beverly Landais recently wrote for Managing Partner in her Growing Your Law Firm Needs More Than A Focus on Size, “[s]ize does not win loyalty. Well thought-out value propositions that consistently anticipate and meet client needs do.” Indeed, in few instances does growth alone meet client needs. Ms. Landais also thoughtfully points out, growth can bring with it greater challenges to success, not fewer. For that reason, if growth is not intended to improve client service, add critical services required by existing and future clients, improve efficiency and client relationships all the while improving the short-term and long-term financial stability of the firm, its strategic benefit can prove fleeting. As many, including Ms. Landais, argue, a law firm doesn’t gain strength and stability just because its footprint gets bigger.
What Lies Ahead For Firms That Grow Without an Underlying Strategy in Mind? For firms that just want to grow to show that they can, the near-term momentum enjoyed does not assure its future. Nor does it necessarily improve the present. For those firms, when the momentum stops, what is next? Momentum can slow, it can stop, and it can be reversed. Embraced too fully, it can deflect a firm from focusing on the true building blocks of success. Measuring success by momentum seeks validation through the pursuit of a false positive-a pot of gold at the end of a rainbow.
In today’s legal landscape, law firm growth is all around. But as hard as it is to compete in today’s legal environment, increasing a firm’s size or footprint without fulfilling a more deeply considered strategic imperative just adds to the challenges a law firm faces. For firms that think growth is a panacea, consider the words of the infamous Charles Ponzi who stated “I went looking for trouble, and I found it.”