Running a law firm successfully is no easy task. It is a multi-dimensional effort that requires leadership, discipline, vision, and some luck. Getting all firm lawyers to row a boat in unison can be tough. Even if some of the oars irregularly go into the water, progress is still possible.
When attentive leaders work hard to keep their firm headed in the right direction, unanticipated events are not part of their go-forward planning. Why would they be? But as history has shown, unforeseen watershed developments can occur that place firms in destabilizing states of transition. When this occurs, it no longer is business as usual. Rather, leadership must recognize that the routine has given way to the unfamiliar. When a firm leader is presented with such a defining moment, decisive action must be taken for the firm to find a safer place.
When transitional event arise, it is imperative that a firm act promptly and with resolve. While such events can come in different forms, most fall into one of five categories.
Loss of a Foundational Leader. Some firms are clearly identified with a single leader. He or she contributes mightily to the firm’s success and despite others also furthering the collective goal, it is hard to imagine continued success when that leader is gone. So, whether sudden retirement, illness, death, or a leader’s foray into public service, the loss of a foundational leader easily thrusts a firm into transition. Business as usual will not be possible. Significant action out of the norm will be required.
Financial Setbacks. Most firms experience an ebb and flow in their financial performance. It can be expected as are the inevitable array of adjustments made to address the up and down. But when a firm experiences a dramatic reduction in financial performance, especially if it represents evidence of a problematic trend, focused action is necessary. Strong steps to arrest the financial setbacks and strategize for a recovery must happen. Inattention or inadequate measures can spell the doom of a firm.
Excessive Attrition. Blessed is the firm that avoids attrition. Indeed, attrition at law firms is common and, within reason, can be helpful. Not only can poor performers rotate out, but new blood can add to a vibrancy that law firms need. When attrition grows to excessive levels, however, a firm can find itself adversely impacted by out of kilter overhead, loss of substantive skills, and declining morale. When a firm experiences a rash of attrition, leadership must stem its continuation, identify the roots for its occurrence, and implement short-term and long-term remedies.
Loss of Vigor. All law firms depend on a measure of enthusiasm to be successful. Whether personnel are enjoying the teaming culture or exciting engagements, a law firm’s vibrancy through its people is a key component to its success. When a law firm loses that energy, and simply goes through the motions in its day to day activity, something is wrong. If not addressed, a firm can slide into irrelevance or indifference. Leadership seeing intensity or potency drop should not accept such a state. Action is required.
Collapse of Your Market. Some law firms stake their success on being the very best at serving a particular niche of the legal market. There is nothing wrong with a boutique strategy-it has resulted in success for a great many firms. But sometimes business trends, legislative or regulatory changes, or client stumbles result in a firm losing its market. Picture an environmental law firm when a government is cool to environmental concerns. Whether expected or not, a loss of market means leadership should move beyond habitual planning and instead go a Defcon level of action.
When major unanticipated developments hit a law firm, leadership needs to step it up a notch. In the face of challenges like the five discussed above, muddling through the customary approach to leadership simply won’t do. Action, perhaps dramatic, is required. Would your firm recognize these predicaments and take the initiatives needed?