“When a law firm embarks on a plan to grow, ultimate success … [directly relates to] leadership’s ability to make the right decisions while navigating the high seas of growth.”
from Decisions That Matter: Tales of Law Firm Leadership in Moments of Consequence
It is not unusual to hear “Growth” as the response when law firm leadership is asked about a firm’s strategy. Indeed, almost daily mergers of law firms are announced—many times with a fanfare suggesting that one plus one equals three. Whatever the math, firms join together because they see a better future combined than apart. Firms not merging often pursue growth through lateral acquisition. They try to lure attorney groups or individual lawyers controlling significant client relationships by promising better platforms, enhanced support, and better synergies.
But is growth, in and of itself, a strategic way to address the business issues faced by today’s firm? Does it constitute a strategic way to approach the marketplace? For that matter, does one-plus-one ever end up equating to three?
In this transaction rich world, it is not surprising that many law firm leaders not only frequently think about growth, but also sometimes worry that a failure to grow will leave their firms vulnerable. Whether growth is offensively or defensively oriented, it must be carefully approached. Deployed unwisely, growth can take on a life of its own and control over its effectiveness can be lost. In light of this challenge, the chances of growing a law firm effectively are greatly improved by following a key fundamental discussed below.
Use Growth to Further a Long-term Strategy that is not Growth Itself
The excitement that comes with growth is inescapable. But a pause from jumping into the looming exhilaration is helpful. For growth to endure beyond the initial pizazz, it must be about a purpose that transcends the mere idea of getting bigger. Absent a fundamental purpose behind the proposed growth, it can grow tarnished like the formerly new car that ages into a beater as the miles pile up. For that reason, taking the time to understand the underlying strategy of the firm and growth’s role in its achievement is essential.
Successful growth is premised on an idea or strategy that makes a firm better and stronger without regard to head count, new offices, or added markets served. Growth grounded in a strategy that establishes the reason to growhelps a firm in many ways. It not only establishes the principle the growth serves but it also guides a firm in how it will use growth to execute its strategy. If growth is tethered to an underlying strategy, a firm’s growth initiative becomes a tactic towards an understood non-growth goal. The firm can measure its progress by comparing how its growth is serving its key non-growth strategy.
A Well-known Success Story
The legal powerhouse of Wilson Sonsini Goodrich and Rosati grew to its present stature by, among other things, pursuing various non-growth strategies designed to serve clients and build a reputation. The firm’s idea to become Silicon Valley’s premier law firm for emerging companies led it to create tools for client use that contributed to making the firm irreplaceable. It adopted client friendly ways for fees to be paid, feeling that many of those relationships would pay off in the long run. For many of the start-ups seeking their footing in an ultra-competitive entrepreneurial market, the firm was seen as an essential partner to success. These client centered strategies drove client demand that ultimately caused the firm to grow. The firm’s decision to grow was not growth for growth’s sake but was an outcome that made it possible for more clients in need to benefit from the firm’s client centered strategies. As client relationships expanded, demand and the size of the firm grew within and without Silicon Valley.
Growth is a topic and tactic of our times. But it should not become a tonic. If it serves an understood strategy that is sound, growth can be an effective tactic to further the strategy. Recognizing that growth is not a strategy, but a tactic is one of the lessons found in our new book Decisions That Matter: Tales of Law Firm Leadership in Moments of Consequence.