Every institution is vulnerable, no matter how great. No matter how much you have achieved, no matter how far you have gone, no matter how much power you’ve garnered, you are vulnerable to decline. There is no law of nature that the most powerful will inevitably remain at the top. Anyone can fall and most eventually do. –Jim Collins
Jim Collins, the author best known for his positive and uplifting books Good to Great and Built to Last, wrote another provocative volume in 1999. How The Mighty Fall which looks at the causes and stages of organizational decline.
In a recent reread of the book I was struck by how much of what is proposed by Collins applies to the success or failure of law firms.
The First Sign of Decline
Collins calls the first stage of decline “Hubris Born of Success.” I translate this to leadership driven by false confidence. Whatever you call it, it marks the beginning of a law firm’s decline.
As a firm moves from figuring out how to survive, to enjoying measured success, some begin to lose sight of what it was that brought about their initial progress. This blind spot causes a drift away from continued improvement in favor of the pursuit of additional or different ways to grow.
This cycle — from early success to the beginning to decline — looks like this.
- An initial struggle for footing.
- Some success doing what it does well.
- The prospect of climbing new mountains becomes increasingly attractive (this comes in the form of new client types, new practice disciplines, new industries served or a new geographic presence).
- Significant resources of time and money are redirected to the “something new”
- The “something new” doesn’t work near as well as envisioned.
- The source of original success slips; momentum is lost; future success and stability are threatened.
In order to avoid decline, effective law firm executives direct the majority of firm resources to improving the value proposition that brought about the original success of the firm.
By contrast, executives presiding over a declining firm confuse their initial success with keen business insight, and begin diverting significant resources in pursuit of “something new.”
How is your law firm growing?