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Roger Hayse

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Roger Hayse is a founding Director of Hayse LLC. For 30 years he has closely advised law firm management and legal industry service providers. His career is highlighted by consistently providing the counsel and leadership critical to successful law firm transitions. He is a frequent writer and speaker, and authored the 2002 book "Law Firm Strategy".

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It takes 20 years to build a reputation and five minutes to ruin it.  –  Warren Buffet

In my professional experience, no attribute is more important for the leader seeking to turn around a law firm than trust.

In a Forbes article by David Horsager, the author eloquently articulates it. “Among all the attributes of the greatest leaders of our time, one stands above the rest: They are all highly trusted. You can have a compelling vision, rock-solid strategy, excellent communication skills, innovative insight, and a skilled team, but if people don’t trust you, you will never get the results you want. Leaders who inspire trust garner better output, morale, retention, innovation, loyalty, and revenue, while mistrust fosters skepticism, frustration, low productivity, lost sales, and turnover. Trust affects a leader’s impact and the company’s bottom line more than any other single thing.”

Horsager’s perspective is spot-on. Without trust, the hope of successfully leading a law firm turnaround is nil. The question is — how does a leader gain the trust of a firm.

In my work, I have only seen leaders earn trust when words and deeds align. This means three things:
Continue Reading Trust in Leadership and the Successful Law Firm Turnaround

It’s common sense to take a method and try it. If it fails, admit it frankly and try another. But above all, try something.”– Franklin D. Roosevelt

Last Tuesday Part 1 of Law Firm Decline and Leadership Mistakes was published. In today’s post we look at the other two leadership errors that lead to decline.

Over-expansion

Imprudent growth may be the number one mistake law firm leaders make. There is a tremendous bias for numerical growth in our industry. Unfortunately, the growth in which we engage is often far from strategic, and about little more than becoming bigger.  As a result, most lateral expansion is not – in the long run — beneficial to the partners of the expanding firm.  Most growth changes the numbers, but adds little value.  Growth is expensive, tests culture, strains the limits of the management and leadership infrastructure and is just plain risky.

Counsel/Advice

  • Add institutional capacity only when existing capacity has been significantly and consistently utilized.  Until that threshold has been achieved, learn to use contract, temporary and outsourced solutions.
  • Restrict lateral growth to individuals or groups that meet strategic criteria, and have been documented to be accretive through objective analysis.  Increasingly, business that is thought to be “portable” is actually far from it.  Vet relationships.  Add laterals in a manner consistent with strategic direction of the firm.

Excessive Leverage

The general inclination in most law firms is to maximize immediate cash flow to owners while minimizing the amount of owner cash tied up in contributed capital.  The combination of these two often leads to operational stress, and — if extended too far, organizational failure. Edwin Reese has an excellent article here on law firm capital.

Counsel/Advice – Better to be safe than sorry.  We recommend that firms maintain a balance of contributed capital that is equal to 25-45% of annual owner compensation and that monthly distributions to owners be based on a distribution of 60-70% of projected annual income with the balance distributed at year-end.

Follow Basic Guidelines And Avoid Crisis
Continue Reading Part 2 – Law Firm Decline and Leadership Mistakes

It is not the strongest of the species that survives, nor the most intelligent that survives. It is the one that is the most adaptable to change. – Charles Darwin

These days, scarcely a week passes without news of another law firm in decline.  From high-profile names to less-known partnerships, the leaders of each face pivotal decisions. Some of these firms will restructure or otherwise embark on a turnaround strategy.  Others opt for merging with another group or offering themselves as an acquisition target in an effort to  avoid dissolution. In recent years we have seen far too many end in a messy liquidation.

Identifying The Path That Leads To Decline

The decline of a once vibrant partnership rarely has much to do with the quality of lawyers engaged in the practice.  And though the marketplace is certainly tumultuous, what is at the heart of survival and success for some, and the dire straits of a struggle to survive for others?

In his book Corporate Turnaround, Dan Bibeault identifies four key mistakes that lead to organizational decline. These mistakes, paraphrased to the legal profession are:

  • Failure to respond effectively to a changing competitive environment
  • Poor control over operations
  • Overexpansion
  • Operating with excessive financial leverage

Let’s look at each one a bit more closely.
Continue Reading Part 1 – Law Firm Decline and Leadership Mistakes

 I think there is a world market for maybe five computers. – – Thomas Watson, Chairman of IBM, 1943

Enough with Prognostication

More than enough has been written about the state of the legal profession. Forecasts vary from projections of a terminal change to the old law firm model (see two recent interesting examples), to more moderate assessments that foresee limited but still serious pain for most in the profession.

Rather than further the debate regarding the magnitude of pain that the industry is going to experience, we want to generate a dialogue centered on turning around a troubled law firm. Specifically, we are looking to discuss what can be done to move a law firm from being in danger of collapse to being a healthy organization pursuing its aspirations.

Unique Creatures

In the world of business types, there is a universe of difference between professional service organizations and other business enterprises. That difference is particularly profound when we start talking about planning and executing a turnaround strategy. Other businesses can restructure around products or service lines. With professional service firms the turnaround process starts with people and their commitment to the organization.

Commitment
Continue Reading Two Keys to a Successful Law Firm Turnaround/Restructure – Part 1

Growth for the sake of growth is the ideology of the cancer cell.― Edward Abbey, The Journey Home: Some Words in Defense of the American West

I thought about naming this post “The Curious Thing About The Way We Define Growth” because it is so curious to me how the typical law firm defines growth compared to other businesses.

How does your firm define growth? Most law firms define it in terms of increased numbers of lawyers, offices and/or practice areas. During the last two decades, virtually every strategy session we’ve been a part of  has revolved around a perspective of growth that centers on size of the law firm.

We prefer to define growth as:
Continue Reading Law Firm Trouble and How We Define Growth

The heaviness of being successful was replaced by the lightness of being a beginner again, less sure about everything. It freed me to enter one of the most creative periods of my life.  — Steve Jobs

Welcome to our blog – Managing Law Firm Transition – Thoughts on Leading High Consequence Change.

There is no denying that the legal profession is in a tremendous state of flux. The press and blogosphere are rife with news.

Like most everyone else, we appreciate the news but news isn’t what this blog is going to be about. Our objective is to provide insights and generate dialogue that will be of value to law firms in transition.

To that end, we start with how we define a law firm in transition. There are firms that are:
Continue Reading What is a Law Firm in Transition