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?