“[L]eaders must have a sharp eye on the future, always considering how the law firm will evolve and succeed in the years ahead.”

from Decisions That Matter:  Tales of Law Firm Leadership in Moments of Consequence

Sustaining a law firm’s success is a nice challenge to have. For one, it means that the founders already have agreed on common aspirations, have tested them, and to some degree or another, are in sync.  That early success also may involve growth. But success in law firm formation and initial growth don’t necessarily assure long-term success or the creating of a legacy.

You see, sustaining a law firm’s success involves connecting the past to the present and from that creating a vision for the future.  When trying to ensure a promising and likely future, leadership cannot relax.  It must deliberately think about what it must do to remain relevant in the years ahead.

 Dedicated Leadership Focused on the Present and Future is Critical

 Unlike the exciting formation or growth phases in which objectives and identifiable goals may become top of mind as time goes by, a firm seeking to sustain its success must purposely articulate the direction it seeks to head.

To avoid becoming a compass with no true north, firm leadership must develop a thoughtful plan that addresses not only the present, but also the future.  “Winging it” won’t work.  The plan should identify objectives that can be managed to.  A firm’s plan for sustainability must bear a connection to the world in which the firm competes and be sensitive to where its market likely will go.  But as the world around the firm changes, the firm must be willing and able to adjust. Finally, the plan must be a realistic one in light of the firm’s talent.  Not only must the firm leverage its human resources strategically, but the plan must be built around concepts that suit the firm’s people and earns their enthusiastic support.

An International Success Story

 Probably no firm has built a bigger name in international legal matters than Baker McKenzie. Its story about sustaining its success can be traced to building a plan around its market niche and talent.

After enjoying steady success in its early years, the firm’s plan for its future was obvious—it had to continue focusing on serving clients who had legal needs that crossed borders.  Client matters in foreign lands had historically introduced Baker McKenzie to highly accomplished indigenous attorneys who were impressed with the “Baker McKenzie way.” In many cases, their experience and self-starting make-up convinced them to join the firm so they could continue working on the sophisticated international transactions that Baker McKenzie could attract. As the firm’s talent pool mushroomed, the firm’s market share of significant cross-border transactions continued if not increased. In a cyclical way, internationally accomplished attorneys at Baker McKenzie begat internationally driven transactions which in turn attracted more talent.  This focus on meeting client needs grew the firm, and lead to an expanding international footprint spawned by a growing economy in a world that was shrinking daily. The plan that saw Baker McKenzie grow across the globe perfectly leveraged the firm’s reputation and its people dedicated to client satisfaction.

The Lesson

 Taking a law firm’s early success and creating a legacy is not a matter of happenstance.  It requires a thoughtful plan with objectives that it and its people can pursue and meet. Without leadership’s focus, a successful future may not be possible.  Guiding a law firm so that it creates a legacy is one of the lessons found in our new book Decisions That Matter:  Tales of Law Firm Leadership in Moments of Consequence.

Let’s start by defining terms. There are a number of characteristics that might be used to bring definition to   “potential”  – size, profitability, locations, and so on. But, for purposes of this discussion, I define it as achieving the professional goals of the firm’s professionals. If, over the span of a career, the dreams, goals and aspirations of every one of a firm’s professionals were met, it would be hard to argue that the firm achieved anything short of its potential.

With this definition in mind, there are three keys to any law firm realizing its full potential:

  • affiliating with those that share a common set of aspirations;
  • creating a plan for achieving those aspirations; and
  • relentlessly investing time and money in a manner aligned with that plan,to the exclusion of spending time and money elsewhere.

Let’s look deeper at each of these three.

Common/shared aspirations

It’s difficult enough to chart and execute a path to success when everyone is on the same page. It is next to impossible when they are not.

Superior firms define aspirations in terms of the type of practice, including nature of services and clients, profitability objectives, role in the community, culture of firm, standards of performance and all other characteristics reflective of the firm that is being built.

The greater the alignment between firm members on these issues the greater harmony and ability to advance in the desired direction. The lesser the alignment, the greater the stress, conflict and ability to move in any consistent direction.

Eric Fletcher, a great market strategist, recently published this post that does a nice job of describing this concept.

Plan for realizing potential

Any business In pursuit of realizing full potential is best served by investing the time necessary to plan for their future. The plan may be the ambitious 5-year version or the more practical 1-year plan and budget.

A good plan brings clear and measurable definition to specific actions the firm intends to take during the plan period in order to move toward its potential.

Mark Haddad, of Thompson Reuters, provides a good overview in this recent post. The post’s stated target is small firms, but the principles are universal.

Execute with discipline

The rate and effectiveness of a firm’s movement toward its potential is directly tied to its discipline in the allocation of resources (time and money) to those actions that are deemed most important to the desired progress.

Every firm faces scores of options when it comes to the investment of its resources. There are new ideas every day as to “what we should do.” I remember well a common refrain from my executive team in an AMLAW 100 firm trying to execute with limited resources “the last thing we need is another good idea.”

The key to realizing potential is to choose  carefully — investing where resources will provide the greatest leverage in moving the firm forward. Deny all other expenditures.

So, in closing…know what your aspirations are, figure out how to realize those aspirations and don’t spend resources in areas not clearly aligned with executing the “how.”


The concentration of law firm financial strength narrows as fewer AmLaw 200 law firms can be counted among the fortunate. As Mark A. Cohen argues in his The AmLaw 200 Is Down to 50 – Maybe 20.  What does It Mean?  a fiscal separation among bigger firms has occurred and continues.  Cohen concludes that the separation presents challenges for all but the elite firms of the world and that smart firms not among the elite must confront this industry upset through differentiation.  If history is any guide, for many firms it won’t be easy.

Greater competition, higher client expectations (and lower client loyalty), and the stratification of legal matters highlight some of the reasons law firm success today, especially for the non-elites, is far more uncertain than ever before.

If business as usual is not sustainable and differentiation essential, firms must consider not being all things to all clients, must bring greater focus to their clients’ needs, become more efficient, cost-effective and value conscious.  Firms also must consider advanced technology solutions, master project management, and “think outside the box.”  As Mr. Cohen suggests, these measures “will require serious soul searching, reorganization, and a fresh perspective on what it means to be a law firm in today’s marketplace.”

Firms seeking to differentiate face their old nemesis: change.  To conquer the change necessary in this quest, firms must have and/or use the following five things:

Courage.         Differentiation means moving away from comfort zones.  It means changing the way business is done with the possibility that there is no turning back.  And it likely means narrowing service offerings and investing in specialization not invested in before.  Differentiation can mean saying good-bye to practice areas and personnel that for years have been a part of the firm.  Pivotal change like that takes courage.  Without it, recasting a firm through differentiation is difficult.

Knowledge.    The idea behind differentiation is not change for change sake.  It is focusing on a new direction that offers more promise.  No new direction can be pursued without knowledge about the firm’s existing strengths, the opportunities in its markets, and the cost/benefits from pursuing a new direction.  Mere hunches are not enough.  Without a factually based and analytically tested plan, knowing whether the current state should be replaced by a future state amounts to guesswork.

Judgment.       When moving from the status quoto something else, forks in the road will be confronted.  At those forks, critical decisions will need to be made.  The exercise of sound judgment is essential if the path towards differentiation is to succeed.  A firm embarking on a new and more focused way forward must be blessed with decision makers that have exhibited wisdom in the past.  If leadership’s judgment is suspect or untested, outside advice should be sought to supplement in-house mind power.

Resolve. It goes without saying that a firm seeking to differentiate must believe in its strategy.  When possessed with that belief, it is essential that the firm have the resolve to follow through on its plan.  Because it will be moving away from the comfort of the status quo, and bumps in the road could be felt, the firm must remain confident it is new direction.  As challenges are confronted, the firm’s commitment to the plan must be demonstrated by forging ahead.  If resolve is lacking, for a whole host of reasons failure is more likely.

Leadership.     A strong leader or leadership group must be in place before differentiation is possible.  People being asked to invest in the new way, many less courageous or simply uncertain, will gain strength from leadership that believes in the path forward and acts in ways consistent with that belief.  Strong persuasive attributes will be needed constantly as doubters, opponents, and uninformed overreact to challenges along the way.

Even though disruption observed in the AmLaw 200 suggests that the “good old days are gone,” a nimble firm prepared to operate within new market realities can still thrive.  That means taking steps to differentiate to avoid languishing in the past.  All it takes is courage, knowledge, judgment, resolve and leadership.  Does your firm have those attributes?


“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.

The Lesson

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.


“Preparation is very important.”

“Albert Pujols, one of the best hitters in baseball’s modern era, used this four-word phrase to describe one of his keys for success. It is not overly complicated and it is easily understood. The fundamental quality of being prepared—of keeping his eye on the ball figuratively in addition to, in the moment, literally—held him in good stead throughout his career.”

from  Decisions That Matter: Tales of Law Firm Leadership in Moments of Consequence 

What the experts are saying

Many of you have noticed the steady increase in the number of financial professionals projecting an economic downturn, This recent Duke University study reports a significant majority of corporate CFOs expect the next recession to start no later than the third quarter of next year. Those projections, as well as other indicators, lead me to believe that law firms are on the lip of the same (or worse) economic challenges as was experienced in 2008-2010.

What to expect

As the absolute volume of demand for legal services is likely reaching a peak, the strongest firms will continue to adapt and move “downstream” — infringing on market share once the purview of small and midsized firms.

Inflation adjusted costs for law firms (as is the case in almost any business) will continue to increase at a slow but steady pace.

At the same time, alternative service providers will continue to take a growing slice of what was the legal service pie.

The combined result of the above is that  economic pressure on law firms is poised to jump  for all but the most valued, established and strategically positioned.

Without respect to successes of the past, the market is sending clear signals to any law firm not following a strategic path: it is time to stop and reassess how your firm fits into the competitive landscape — and tune-up appropriately. If you haven’t recently evaluated your debt, space and people position, now is the time!

Law firm succession is a huge issue for many of today’s law firms.  Not surprisingly, more firms than ever before are focusing on succession by adopting written succession plans that address leadership succession and client relationship transfer.  Despite the importance of succession, many firms have no written plan and remain unprepared for transitioning leadership or client relationships.

But even when law firms draft succession plans that address leadership and client relationships, too many of those plans don’t do enough.  Too many plans are deficient because thought and resource dedication for plan implementation is inadequate or an afterthought.  Like the football coach that comes up with a great game plan but fails to prepare the players to execute, the job is only half done.

Giving plan implementation inadequate attention can mean your carefully constructed succession plan won’t work.  What about your firm’s plan, you may ask?  Simply put, your firm’s succession plan is in danger of not working when any of these five signs exist:

You are Too Satisfied That a Succession Plan Was Completed.  Dedicating the time to prepare a comprehensive succession plan is no small task. Seeking input from important voices within the firm and forging a consensus on the plan typically doesn’t come easily or naturally.  So once a comprehensive succession plan is developed it is natural to feel a sense of accomplishment.  In reality, a firm’s adoption of a succession plan with all its aspirations represents only the first steps in succession.  Too much patting oneself on the back for finally drafting the succession plan can be a bad sign.

Elements of Plan Implementation are Non-existent or Vague.   Most succession plans aspire to continue a firm’s legacy through the next generation, and many do a credible job of identifying the ways past successes need to be continued into the future.  Just getting to that step oftentimes puts the firm light years ahead of where it was. But too often the plan is light on how it is to be implemented or there is no companion plan that specifically details how the aspirations will be implemented.  A weak implementation scheme suggests looming disappointment.

Measurements of Implementation Success are not Identified.  A close corollary to needing a clear idea about implementation is identifying the ways in which implementation can be graded.  Any implementation initiative must create clear measurements of success along the way to full implementation.  Ephemeral commitments about getting the next generation involved or making client introductions is not enough.  Substantive markers of progress must be created. If clear signs directing the firm to where it is going don’t exist, it is going nowhere.

Accountability Requirements for the Plan’s Success are not Established. Closely aligned with the need to measure success is the need to place persons in charge of achieving success.  A lack of clarity on who is “on point” for getting stuff done means nobody is “on point.”  But it is not enough to make someone responsible for implementing aspects of the plan if that person is unclear on how he or she is going to be graded. Specific milestones and timelines for achievement need to be assigned and understood by all parties given responsibility for the plan’s implementation.  A firm without assigned responsibilities and markers of success is living in a “not my job” world.

The Persons Responsible for the Plan’s Success are not Held Accountable.  A person assigned any responsibility for plan implementation must be held accountable for performance.  It is imperative that performance be periodically reviewed so that the firm can assess progress towards achieving cited objectives. When the firm falls short of objectives, corrective action can be taken, including changing personnel assignments.  Conversely, on target progress can be noted and rewarded.  Frequent review and accountability keep a plan from stalling.

Producing a consensus driven succession plan is a critical step towards creating an enduring firm legacy.  As important as it can be, however, a firm is not positioned well for achieving its succession goals if any one of the above five circumstances exist.  In thinking about your firm’s succession plan, what are the chances it will work?

“Every little thing counts in crisis”  -Jawaharlal Nehru, Indian statesman 





“For law firm leader, there is little room for error when crisis ensues. A mistake here, a misstep there, and lawyers at the firm begin to lose confidence in the firm and its leadership”

            from    Decisions That Matter: Tales of Law Firm Leadership in Moments of Consequence


Realizing that your law firm is in crisis can be unsettling, to put it mildly. Take heart, though crisis is a concerning condition, it need not be fatal.

Crisis can arrive in many different ways. At times it is the product of an extended period of underperforming. For other firms it can be brought on by events such as litigation, the departure of a group of lawyers or loss of a significant client relationship.

No matter the cause, here are five key areas to consider when addressing crisis.

  1. Calm leadership– Someone has to be in charge of addressing the crisis situation. This person may be the firm’s managing partner; it may be someone else — but someone must be on point. From day one this individual should demonstrate a calm confidence in the firm’s ability to address the crisis.
  2. Regular communication– Whether the point person or a designated spokesperson, someone must be accessible and provide routine communication. The absence of information creates anxiety that will certainly make a tough situation more difficult. The communication must provide needed information with confidence and complete honesty.
  3. Triage – Immediate attention must be given to the conditions that create the most immediate threat to the institution’s survival. In medical parlance, you must first stop the bleeding.
  4. Plan– A plan must be developedfor working through the crisis. Sorting through the primary issues and the options available to address them is an immediate priority. Once the plan is developed, to the extent appropriate, the plan and progress on it become part of the routine communication to relevant parties.
  5. Help– Most law firm leaders have never addressed a crisis that may threaten a law firm’s viability. Learning to lead a firm through crisis is often best accomplished by tapping resources that have been there. Better to spend a few extra dollars and secure needed insights than save a few dollars and lose the firm.

If addressed properly, a crisis can be an experience that makes a law firm stronger!


“Law firm disasters are almost always of the man-made variety…. Once a storm is brewing, add the fact that as business organizations go, a law firm is among the most fragile, and you have the climate for a series of catastrophic events.”

            from Decisions That Matter: Tales of Law Firm Leadership in Moments of Consequence

 Most law firm leaders confront crisis as a newbie.  Their prior leadership experience typically delves in the positive where decisions can move the dials of profitability, growth, or culture change, but are not for all the marbles.  Crisis is different-a misstep can mean disaster and a firm’s unraveling.

When crisis hits, what is a leader to do?  How can inexperience with looming disaster be overcome so that the threat is eliminated, and a better prognosis appears?  The answer to these questions is found in leadership fundamentals that are reliable stepping stones on the path to returned normalcy.  One such fundamental is discussed below.

Act Immediately with a Blend of Short-term and Long-term Objectives

 In any crisis, clients, owners, and the rank and file are impatiently looking for a convincing solution. Unfortunately, solutions can’t be purchased off the shelf and one firm’s strategy for its ills are likely inapposite for another firm.  For that reason, the ultimate solution requires a strategy seeking short-term successes that point towards a long-term vision forecasting good times.

Immediate action demonstrating that solutions are being implemented, essentially real-time wins, helps avert a downward momentum that can suck away confidence in the future.  The short-term actions should seek tangible results that counter the lingering issues that have contributed to the crisis. A firm may be in extremis because of past profligate spending.  Quantifiable cost cutting directly confronts the malady and can be observed by everyone. A potential “run on the bank” after some lawyers have unexpectedly departed must be addressed to quell the nerves in the hallways.  Gaining the pledges of key producers that remain or adding laterals to replace the deserters (in substantive capability, headcount, or both) presents evidence that the scary momentum is being turned around.

But as good as these immediate responses can be, they need to fit into a bigger picture-they need context. What is leadership’s long-term vision for the future? How does the short-term action plan fit in with the long-term vision leadership is selling?  Are the short-term and long-term in sync?

One Success Story

One firm that faced crisis and synchronized its short-term steps with its long-term vision was Washington, D.C.’s Patton Boggs, a firm whose formidable legal work and lobbying expertise earned it the moniker “The King of K Street.”  Its crisis stemmed from a series of challenges including the financial upheaval brought on by the Great Recession.  A number of short-term steps were taken to position the firm for a future in which it remained independent but decidedly stronger.  But when events took a more imposing turn, additional short-term steps were developed to position the firm as an attractive merger candidate. Merger metrics were improved, a sufficient business base was retained, and it ultimately merged to become Squire Patton Boggs.  When facing crisis, Patton Boggs blended short-term steps with its long-term vision and prevailed.

The Lesson

Crisis can be all-consuming. To knock it down law firm leaders must stick to tried and true fundamentals. Acting immediately with short-term action that supports the long-term plan is but one of the fundaments to be learned from stories recounted in our new book Decisions That Matter: Tales of Law Firm Leadership in Moments of Consequence.




BigLaw leaders have many things to think about when guiding their firms to Top 100 finishes. One major item is the need to respond to client expectations of value.  The idea that clients expect value in the legal services they buy is not a radical idea.  As long as law firms have had clients, there has been an expectation by them that they are entitled to bang for their buck.  But as BigLaw leaders and their clients will tell anyone willing to listen, the pursuit and assessment of value has become increasingly more sophisticated.

Today corporate clients and large law firms are communicating constantly about fee arrangements, pricing proposals and expectations of value.  These discussions frequently go beyond the idea of adjusting rates downward, creating budgets, or constricting hours to be worked.  Pricing proposal experts and legal operations professionals join together with client general counsels and law firm partners to arrive at a transparent approach that makes sense for client and firm.  Indeed, corporate clients and BigLaw realize that finding an arrangement that satisfies both is essential to a long and lasting relationship. And while a one-sided deal might be a win for one party, it will only be so for the short-term.

Law firms smaller than BigLaw might not have the ability to hire pricing professionals and legal operations teams. Similarly, their clients may not have the infrastructure to provide sophisticated grading of legal services. But make no mistake, the key to law firm success, regardless of firm size, is the transparent delivery of value that clients recognize.  So, law firms of any size should take a cue from their big brothers and sisters and think about the five following things:

The Value Proposition is a Pre-service Action Item.  Before work gets started for the client, it is essential to focus on client expectations.  Jumping into an engagement not knowing what the client wants substantively and financially is courting trouble.  Blindly starting work is like embarking on an expedition through a jungle without an experienced guide.

Talking About Value Doesn’t Have to be Uncomfortable.  Before getting started on a client matter a serious conversation about the elements that make up the client’s views on value should be had.  Indeed, an unemotional talk about expectations shows your client that you are thoughtful and result oriented.  It is a comfortable communication because it is welcomed.  Compare that kind of dialogue to the one over already charged fees that are a multiple of what the client expected.  Talk about uncomfortable.

The Payment of Your Fees May Not Represent a Good Report Card.  Just because a client has paid your fees does not mean the client is satisfied.  A client may not be confrontational, it might view the services unhappily but is ready to move on or may simply pay reflexively. But as time passes, that client may cool to the relationship and eagerly move on to another firm.  It may be surprising, but the payment of a fee may be the beginning of passive/aggressive client behavior that portends trouble.

Value and Understanding Go Together.  Closely aligned with the idea that value is a pre-action item, continually hearing from the client about its perception of the value received is the key to understanding client needs and guiding law firm behavior.  Just because you had the “talk” with the client at the outset does not mean that you are done trying to understand the client’s substantive and financial expectations.  Constant dialogue about value keeps you informed and makes the relationship a transparent one.

Value Means Repeat Business.  If a client perceives that it is receiving value, it is less likely to try another law firm.  Delivering value makes it hard for the client to move out of its comfort zone-the one provided by you.  Moreover, the interactive process with the client that defines value likely will set your law firm apart from competitors.  All of that makes repeat business more likely.

Many of the larger law firms are focusing on understanding the kind of value that clients recognize and appreciate.  Even though BigLaw may be leading in this realm, understanding the value equation is not a function of law firm size.  Is your firm, whatever its size, proactively working with its clients in search of that win/win solution?


I have been preparing for a managing partner leadership conference. One of the topics I am discussing is law firm Key Performance Indicators “KPI.” In reviewing recent articles and posts on the issue I was struck by two things:

  • the disproportionate representation of relatively short-term performance snapshots; versus,
  • the almost total absence of the two most important factors for any business, including law firms.

Ask any executive associated with the leadership of a law firm to define the most important asset of their firm. Virtually all will either say, “our people” or “our clients.” A handful might say both our clients and our people.

Yet the dominant metrics in most law firm KPIs include revenue per …, profits per …, productivity per …, debt per …and so on.  In my experience, it is rare to see a metric that reflects the loyalty/satisfaction of the firm’s clients or its people.  This is startling when you compare this with what firms say is most important.

Add to this the following:

Our clients are our most important asset

BDO, the mega-advisory firm, surveyed more than 100 in-house counsel regarding change they are experiencing. As described here, the report which includes a lot of interesting findings, described one result I found fascinating, “Thirty-six percent of legal departments are contemplating throwing over their current outside law firms in favor of new ones.” This is more than one-third —This should be frightening to firms that are only able to guess about the loyalty of their clients.

Our people are our most important asset

There has been much written for years about the dissatisfaction level of lawyers with their chosen profession. This article at Attorney at Work, and a related study here, describe the increasing and expensive level of turnover in law firms. According to the article, the combined annual cost to the 400 largest U.S. law firms approximates $9 billion, and this doesn’t count the cost of dissatisfaction among law firm professionals and support staff.

The Number One Worst Job?

The point of this post isn’t turnover per se, but the unhappiness that drives turnover. It seems undeniable that to a significant degree the practice of law in today’s environment equates to dissatisfaction. This Above the Law post describes a study that found the number one worst job in America to be an “associate attorney.”

In case we need to underscore the problem, the dissatisfaction in law firms isn’t restricted to associate lawyers. A very recent post by, my friend and marketing strategist, Eric Fletcher discusses lateral turnover (mainly partners), and the fact that a quarter of hired laterals leave the firm they joined within three years..half leave within five years.

Happy people generally stay where they are and unhappy people leave.

Why Should You Care?

If those KPIs that chart the short term — especially profits per— look good for the next two or three quarters, it is tempting to operate as if everything is fine. And if those metrics don’t look good, you’ll take steps to correct them, right?

But if you’re uncomfortable repeatedly addressing baseline problems with short term KPIs, and the unhappiness of colleagues isn’t enough to get your attention, here’s why you should take steps now to address the real issue.

Unhappy people don’t do their best work and clients sense the unhappiness. Law.com had thisgreat article in January in which the relationship between unhappy lawyers and clients is discussed. Here are three telling quotes from that article,

“Clients we interview also say how important it is to have lawyers who love what they do and are passionate about their work, and not wallowing in negativity about their frustration with fellow partners or firm dynamics,” 

“There are clear credit wars within the firm that drive behavior that is counter to great client service. We have received calls from partners asking us to make sure when we send the firm a matter to send it directly to them,” one client said.

“There is a noticeable tension between a few lawyers. I don’t need to know or want to know if they have issues, but it certainly raises eyebrows when fellow partners are not getting along” 

If your firm is serious about long term stability it will pay at least as much attention to these two long term KPIs — how your clients feel about the firm, and how your people feel about the firm.

Does your firm know?