Law Firm Warning Signs

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Law firm growth through merger has been popular in recent years and does not appear to be abating.  Each consummated marriage had its reasons, ranging from client centered, substantively compelling or geographically helpful. Some combinations proved quite successful, others moderately so, while a few could be judged as failures.

Deciding whether to combine law firms requires intense analysis that will be dictated by the situation. Besides the usual metrics of revenues, expenses, headcount, practice expansion and the like, law firm leaders face more intangible issues, such as whether disparate practices can coexist, whether some clients’ incompatibility precludes their being served under one banner, or whether strong personalities can get along. These issues can be tough to resolve and it takes a great deal of work to sort through them successfully.

Other issues are not so tough to assess. In fact, there are certain issues, Danger Signs if you will, that augur against any combination if they cannot be resolved with adequate certainty and confidence. If these Danger Signs exist, be prepared to run away from the combination.

If You Don’t Know How You Will Integrate the Firms, Don’t Combine Them. One of the most difficult tasks in trying to make two law firms or
Continue Reading Thinking About a Law Firm Merger? If These Six Signs Exist, Give it Another Thought

The reality for law firms is that layoffs, of both staff and lawyers, can become a necessity.  Many law firms facing transition arrive at the layoff decision early and for those firms the decision to part ways with certain personnel may represent an adjustment or fine-tuning. Other firms only resort to layoffs much later in the transition continuum, generally after performance has lagged for too long without action. Whether fine-tuning or something more dramatic, a layoff can be a significant event in the life of any law firm.

In theory, pulling the layoff trigger early is a no brainer. From a practical standpoint, however, the concern about potential fall out from the layoff decision causes many law firm managers to pause before cutting people loose.
Continue Reading Law Firm Layoffs-Brace for the Aftershocks

future and pastLaw firms can be in different stages of transition, ranging from facing a business altering decision all the way to requiring an orderly liquidation. One of the stages of transition frequently observed is when a law firm requires a repositioning. Such a law firm is not in trouble, is not staring down the threat of crisis and certainly does not need to develop and execute a liquidation/wind-down plan. Yet a firm in need of a repositioning cannot ignore the change occurring within its midst. If it does, the more serious and dire forms of transition may begin to surface with potentially devastating effects.

On the continuum of concern, clearly a law firm that may be in need of repositioning has more time to react than a firm in trouble; but procrastination is dangerous.

Recognizing the need for repositioning is the first step to staying away from the more serious forms of transition. With that said, here are a number of signs that your law firm is in need of a repositioning.Continue Reading Signs Your Law Firm is in Need of a Repositioning

Let’s face it, law firms are living and breathing souls that constantly evolve and change. Change can be good. But some changes or patterns signal that a law firm is facing transition. And that kind of change can present challenges that are best addressed early if the firms evolution is to continue.

Dealing with transition can put your law firm in the news, even if a decisive plan is articulated and is well underway.  In other instances, an inability to control the forces of transition can lead to undesirable consequences.  But few people would question the wisdom of addressing the root causes of transition. Sometimes, however, recognizing the signs of transition is not intuitive and the opportunity to develop a timely and well thought out response is squandered.

Recognizing the signs of transition is critically important to the longevity of a firm. By recognizing these signs, a firm can design a solution that decisively fixes what ails it. As is often suggested in another context, “the first step to dealing with a problem is to acknowledge its existence.”
Continue Reading Warning Signs Your Law Firm is in Transition