Note: This is Part Two of a blog that was originally published as a guest blog on Kevin McKeown‘s Blog Leadership Close Up. We wrote At the Edge–Avoiding the Fall to revisit a success story of a law firm dealing with transition and emerging stronger from a near crisis and how the
At the Edge–Avoiding the Fall (Part One)
We originally posted this blog on Kevin McKeown‘s blog Leadership Close Up. Kevin has been a tremendous resource for us and has guided us greatly as we work at delivering meaningful content about the legal industry and the significant changes it faces.
Some words simply lose impact over time.
Change is such a
Law Firm Management: Avoiding the “Run on the Bank”
Nothing is scarier to a law firm than to find itself facing a “run on the bank.” It can begin with one or two “key” departures, is compounded by panic, and followed by more departures.
Few firms are immune. As Debra Weiss noted in her Is the Law Firm Pyramid Collapsing? Big Law is Aging
The Troubled Law Firm – Part 5 continued
The Troubled Law Firm – Part 4 – Planning and Executing the Turnaround
Nations, like stars, are entitled to eclipse. All is well, provided the light returns and the eclipse does not become endless night. Dawn and resurrection are synonymous. The reappearance of the light is the same as the survival of the soul.
This is the fourth part in this series on Turning Around the
The Troubled Law Firm – Part 3 – A Successful Turnaround
When written in Chinese, the word ‘crisis’ is composed of two characters. One represents danger and the other represents opportunity.
The Crisis at Kaye Scholer
I was sitting back reviewing law business related articles on Zite. As the stories of doom and gloom and failing law firms big and
Trust in Leadership and the Successful Law Firm Turnaround
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
Growing Your Law Firm–Some Cautionary Thoughts
“Bigger is better.” In recent years, many law firms have subscribed to that maxim to grow through office launches, mergers, or lateral acquisitions. Grabbing market share, adding substantive expertise, and establishing geographic relevance provided the justification for many an expansion plan. For some firms, growth appears to have been partly in response to the rapidly changing legal service landscape. Edwin Reeser recently has written two thoughtful pieces presenting a contrary view to some popular notions that stoke the enthusiasm for growth.
Mr. Reeser’s articles note that law firm growth is not necessarily a winning strategy. Indeed, for every benefit gained from an out of the ordinary course growth strategy, the bigger law firm assumes some corresponding risk. Only time will tell whether the financial benefits from expansion will outweigh the intangible risks. For that reason, it is a good idea to consider some of the by-products of an expansion plan before diving deep into the growth plan pool.
The Results of Growth Can Disappoint or Backfire. Bringing into your firm new people, new offices, and new expertise causes change. Change can be good, but it also can be unsettling. Moreover, all the promise justifying the growth can play out poorly. Indeed, as Mr. Reeser wrote in 2012 in an excellent five part series for the San Francisco Daily Journal about the economics of lateral acquisitions, there is an equal chance that the lateral acquisition won’t take (to review the terrific five part series, go to Mr. Reeser’s website). If this is the case, the cost of failure will be borne by the existing owners. Trying to maintain credibility among your partners once an acquisition struggles or fails is not an easy task. Beyond credibility, financial burdens caused by failed acquisitions can de-stabilize the firm.
The Excitement of Growth Can Become Addictive. Let’s face it; growing a law firm can be exciting. It really gets exciting if there is a series of
Continue Reading Growing Your Law Firm–Some Cautionary Thoughts
Part 1 – 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
Two Keys to a Successful Law Firm Turnaround/Restructure – Part 1
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