I don’t know where we should take this company, but I do know that if I start with the right people, ask them the right questions, and engage them in vigorous debate, we will find a way to make this company great. Jim Collins

 

So many law firms — big and small — are struggling. This might lead you to believe that building an enduring firm is a complex undertaking.

I don’t think it is.

Certainly, if a firm has a dominant personality in need of having the ego stroked, or engaged in acts of self-aggrandizement, there can be challenges. And those challenges will give rise to workshops, white papers, seminars and retreats hoping to address the issues.

But if a firm sticks to the following, stability, balance and longevity are not only possible; they are easily within reach.

Here are three keys to building a law firm that will last for the long haul.

  • Gather the right people – When it comes to individuals working together, the equation is straightforward: the greater the degree of shared values and aspirations between lawyers, the greater the probability of survival. If members of the firm have a similar perspective on what is important they will find a way to work through the challenges. Firms that include partners with great variance in basic beliefs and ambitions face a high risk of failure.
  • Deliver quality client service – Nothing is more fundamental to a business remaining viable than the ability to satisfy clients. The strongest firms have an absolute, unwavering commitment to serving clients in a manner that the clients value and appreciate.

Client centered firms routinely seek opportunities to listen to their clients – about what the client values, and how the service of the firm measures up. Client interviews and surveys are effective means of receiving feedback.

Great firms seek innovative ways to instigate on-going conversations. Imprudent firms become aware of problems in service quality through the loss of client relationships.

  • Operate conservatively – Building a firm around conservative principles helps mitigate the risks that cause pressure for so many firms. It is often a simple trade off between low risk and immediate rewards. Focus on these areas:
    • Cost structure – maintain a low cost structure by:
      • not hiring personnel materially in advance of the need;
      • not taking down space materially in excess of needs; and,
      • avoiding shiny new space.
  • Debt – any level of debt carries a degree of risk. Prudent firms maintain low to no debt, including operating lines of credit;
  • Draws – maintaining draws at a modest level minimizes pressure on cash flow and helps keep your firm out of debt;
  • Capital – invest in your firm for the long haul. Adequate capital levels provide stability, and help keep debt low;
  • Rate of growth – aggressive, fast and imprudent growth may have caused more law firm failures than any other single factor. Adopt a strategic and measured approach to growth.

It is simple. To give your firm the greatest opportunity for stability and longevity, focus on having the right people, meeting the clients’ needs with quality service, and operating in a generally conservative manner.

Nothing spectacular. But as is so often the case, the seduction of the spectacular is difficult to resist.

What are your thoughts on leading a law firm in today’s transitional market? Is the conservative approach and the long view passé?

A leader is best when people barely know he exists, when his work is done, his aim fulfilled, they will say: we did it ourselves. —Lao Tzu

 

Leading a law firm these days may be one of the great roller-coaster rides of modern management. Exhilarating, breathtaking, unexpected twists and turns, even moments of fear.

Today’s law firm leader is asked to do it all. I believe this (almost always unspoken) expectation sets us up for disappointment.

In an attempt to think through the new challenges of law firm leadership, I have been working on identifying the top 5 attributes for today’s successful leader. I thought I would share the exercise here, and solicit your participation in the discussion.

The exercise began with the creation of a list of critical attributes.

Adaptability. It is no news that the market is changing. Fast. More competition, new work models, a global economy. What worked yesterday may not even keep you in tomorrow’s conversation.

Charisma. There is no doubt that a leader needs to be able to connect and motivate the rank and file of a firm. Charisma is a vehicle through which confidence can be gained.

Communication. A clear understanding, firm-wide, of issues and opportunities relevant to strategy and operation is essential. Accomplished leaders possess the skills attendant to this understanding.

Conviction. A leader’s road is rocky. In order to succeed, effective leaders have to stay the course when difficulties are encountered.

Curiosity. To be inquisitive opens a leader’s mind to additional options and factors relevant to strategy and decision-making.

Decisiveness. This may be particularly challenging for the lawyer leader, trained to see all the ways in which things might go wrong. But in the current market reality, one must be able to see alternatives, evaluate risk/benefit and make a decision quickly.

Delegation. The greatest leaders understand that no one can do it all. The wisdom and ability to leverage personal time and talents, build highly competent teams, and delegate responsibility defines how much will be achieved.

Experience as a leader. Many law firm leaders gain their first experience in leading people when appointed/elected as the leader of their firm. Everyone makes mistakes. In an evolving market we are constantly learning. But the complexity of law firm leadership is not an ideal laboratory in which to gain initial experiences.

Humility. Great leaders recognize their role as a servant to their partners. Ego centered individuals often attempt to build monuments to their greatness at the cost of their firm and partners.

Integrity/Honesty. Honesty and integrity should be a given; but as we have seen in too many firms of late, it is not universally present in business leaders.

Self-Awareness. Leaders don’t fool themselves. They have an awareness of who they are – of personal weaknesses and strengths. They understand what they are doing, how they are performing, how they are being received, what is working and what isn’t. This awareness provides the foundation for improvement.

Smart.  There is a degree of intellect necessary to assimilate, evaluate, decide, and communicate.

Visionary. It is almost impossible to lead (as opposed to manage) without a clear sense of the path. Not all professionals possess the capability of seeing how their firm can successfully navigate the competitive landscape of tomorrow.

My Top Five

Though not complete, the above list includes many of the attributes of successful leaders. As I review it, and reflect on the great leaders I know, here are the five I put at the top of my list.

  • Honesty/Integrity
  • Experience as a leader
  • Adaptability
  • Self-Awareness
  • Visionary

I will follow a leader who is grounded in what is right, knows where they are going, can change with the moving marketplace, has awareness that allows for self-improvement and has done it before. It was hard for me to leave communication out of my top 5.

What attributes do you value most in a leader?

 

 

 

If SportsCenter had a sister station named LawCenter reporting on news in the legal profession, its Stuart Scott (what is lawyerese for Boo Yah!?) would report on the big lateral hires throughout the year and not, as is the case in the NBA, for a brief period after the end of the season. Unlike players in the NBA, lawyers are free agents 365 days of the year and can be lured away from their existing firms at any time.

As has been reported, law firm reliance  on lateral hiring has fueled a lateral hiring culture for many years. Much like NBA general managers that have tried to buy a championship through free-agent acquisition, law firm managing partners have repeatedly gone into the open market to build their firms-many times without a well thought out strategy.

The efficacy of lateral hiring for law firms is subject to debate and analysis. The American Lawyer recently published a series that suggested that lateral hiring might not be a clear winning strategy. The NBA standings likewise suggest that free agent signings or trading for big names nearing free agency does not always work (Lakers anyone?). But if a law firm is committed to growth through lateral hiring, the world of the NBA can be instructive.

Hire Like You Have a Salary Cap.  The NBA has a salary cap but law firms do not. That does not mean that profligate spending makes sense. Rather, any law firm seeking to build or supplement its roster through lateral hiring should impose its own salary cap. That requires strategic planning prior to jumping into the lateral hiring marketplace. What hires will further the firm’s strategic plan and how much can be spent on those hires? This will help avoid tertiary hires that provide short-term excitement but do not fit long-term. It also will preserve “cap space” for more strategic hires.

Hire to Build a Team.  Again, before you hire, what are the long-term objectives embedded in your firm’s strategic plan? Hire to those objectives and avoid being swayed simply by talent. You only need so many point guards-only one ball is played at a time. Also, character and coach-ability matters in sport and it can matter at a law firm. We know that lawyers are an independent lot-if someone’s personality or past history suggests that he or she won’t play well with others, take a pass.

The Good and the Bad of Long-Term Contracts.  In the NBA, long-term contracts can be good. Had Miami signed LeBron to a 10-year contract four years ago, that would have been a good thing. Long-term contracts also can be bad. Gilbert Arenas’ contract, viewed the worst of all-time, is a loadstone. Due to lawyer mobility, long-term contracts in the legal profession have little meaning except when they hurt.  Although law firms can’t lock up a LeBron, many firms offer lawyers multi-year guarantees to induce them to lateral over. A firm should refrain from guarantees lest it have a Gilbert Arenas dragging down profitability while heading its corporate section.

Ask Whether a Long-Term Approach is Better.  Is a long-term approach to growth better? The Spurs, a team built over a long period of time with predominately cornerstone players, beat the Heat 4 Games to 1. That does not mean that hiring laterally is off the table. But lateral hiring in moderation while building for the long-term may prove better. That is how the Spurs have become the Wachtell Lipton of the NBA.

Leadership is Important.  It takes talent to win. But leadership forges talent into a cohesive team that maximizes results. Greg Popovich sports five championship rings because he took talent and molded it into a number of superior teams. In the lateral hiring realm, once a lawyer is hired, the real work for leadership begins, not ends. Making the lateral hire an integral part of the firm’s future success is the mark of a leader that approaches lateral hiring with vision. A great leader will think about integration as part of the lateral hiring process.

Like it is often the case for NBA teams seeking to add new talent, law firm lateral hiring is best if any addition furthers a well developed strategy-a strategic plan.  Does your firm have the discipline to only hired laterals strategically?

 

In recent years, law firm mergers have been on the uptick and do not seem to be abating.  Big mergers reap a lot of publicity because the firms joining together often have household names. But as Catherine Ho reports, not all the law firm mergers involve the behemoths that grab the headlines. Ms. Ho’s Law Firm Mergers Continue to Target Small Firms describes how many of the firms participating in mergers have less than 15 lawyers.

No doubt the smaller firms combining with larger firms frequently are being absorbed rather than surviving or entering into the combination as equals. In the case of law firm merger in which a smaller law firm is absorbed, any number of reasons can drive the decision to abandon independence. But given the aging of law firm leaders from the boomer generation as recently reported by Matt Greenslade, merger in which smaller law firms are absorbed may present an alternative to a more traditional law firm succession plan. Mergers driven by the need to provide for succession make sense for a number of reasons.

For the firm being acquired, merger can resolve many succession-planning issues. Without providing an exclusive list, a firm facing succession addresses some of its issues by agreeing to merge, including:

Leadership Dilemma. For some small firms, a future generation of leaders just never developed. Law firm leadership at those firms face the uninviting prospect of turning the reins over to unqualified or uninspiring junior partners. A merger can solve that problem.

Post-merger Continuity. Existing leadership may be concerned that a non-merger succession plan won’t go well and their firm gradually may wither away. Combining with a larger firm with solid leadership may reduce that risk and promise continuity. And that continuity may mean, at least in the mind of the boomer leaders, the law firm they started lives on.

Post-merger Opportunity. Despite a possible lack of confidence in the leadership readiness of the smaller firm’s lawyers, boomer leadership may believe that a new and larger firm will provide better opportunities for their people for whom fondness remains. Leadership riding into the sunset knowing that they have provided opportunity to their people may feel more content.

Good-bye Worry. It is an overstatement to say that a merger removes worry for the former leaders of the absorbed firm. But a well-negotiated merger certainly can provide some sense of security to law firm leaders that have fought the good fight for so long without an end in sight.

Benefits. The merger agreement may include benefits to the absorbed law firm’s people, including former leadership, that are better than or more secure than benefits currently extant at the smaller law firm. It is inescapable that a law firm that closes due to a lack of succession planning will not continue to provide its people with benefits.

Although a smaller firm’s leadership may be motivated to merge in order to solve some of its succession issues, it is not as if the acquiring law firm does not benefit. The existence of firms with succession issues presents to the larger firm a market opportunity it may not otherwise have. In addition to gaining access to a desired market, the needs of the smaller firm to resolve its succession promptly may improve the economics of the deal and gains for the larger firm market intelligence that may exceed any that could be obtained by hiring a lateral or two to a de novo office.

These considerations already have been enough to propel some firms into merger-would they be enough for your firm?

 

This article won the BigLaw Pick of the Week award for the week of July 27, 2014.  The editors of BigLaw, a free weekly email newsletter for those who work in midsize and large law firms, give this award to one article every week that they feel is a must-read for this audience.

 

 

The most dangerous leadership myth is that leaders are born – that there is a genetic factor to leadership. This myth asserts that people simply either have certain charismatic qualities or not. That’s nonsense; in fact, the opposite is true. Leaders are made rather than born. – Warren G. Bennis

 

There is simply no single factor that has a greater impact on the success or failure of a business than the quality of its leadership. During the current period of dramatic change in the legal services industry a well defined means of developing effective leadership is a must.

First, to debunk a myth – effective leaders are not born, they are made.  Much has been suggested about “natural born leaders” and there is no substance to the suggestion. This should be good news to members of law firms. With sufficient desire, dedication and effort, effective leaders are developed.

There are three primary steps to creating effective law firm leaders.

  1. Identify interested lawyers.  Routinely engage members of the firm including junior associates to determine who has interest in functioning in a leadership capacity.
  2. Develop the capability. Once identified, find opportunities to develop their leadership experience and knowledge. Opportunities include:
    1. Assign leadership positions,
    2. Provide leadership assignments,
    3. Connect the leader to be with a mentor (inside or out of the firm) and
    4. Direct them to educational programs intended to develop knowledge and build a network of other emerging leaders.
  3. Obtain feedback. All effective leaders are consciously or unconsciously committed to learning. They strive to become better letters. Nothing provides a stronger learning experience than lessons learned on the job. A formal system of routine feedback, from all applicable personnel, provides the opportunity for that learning.

Maintaining an appropriate sized group of emerging leaders is critical to law firm success. Prudent firms proactively develop that leadership capability.

What is your firm doing to prepare tomorrow’s leaders?

Law firm succession planning is a lot different today than it was in years past, even just a few years ago. In addition to the issues  covered previously on Succession Planning, difficulty arises from the fact that the interests of the people that make up a firm have never been less aligned. The lack of a single view about the firm, its future, and one’s role in the firm’s future, makes preparing for the next generation a formidable task.

Today, the perspectives at a firm are varied. The partners with longevity and/or getting ready to retire likely are among the most loyal people at the firm. They recall good times and bad times and reflect back on the firm they helped build. Preservation of the firm, and their benefits, is paramount. Younger partners have grown up knowing a legal market where lateral movement, and reduced loyalty, has been a way of life. Staying for an entire career at a firm may not be an overriding desire, especially if a firm’s stability is not certain in this age of new normal. The associates are even less attached to the firm-many are not even sure they have a long-term future in the law let alone the firm. For associates, loyalty to the firm is not a major consideration. Even long-time clients are less loyal as they readily change firms or seek out alternative resources.

Senior management planning for succession must manage among these divergent interests. While no easy task, some suggestions include:

Create a Sense of Trust.   Sandra Bekhor’s A Firm Handshake for Unsure Times takes a look at how to manage these divergent interests and distills it to one word: trust. Without repeating her article in depth, she identifies that trust is a universal value that persons holding divergent views can appreciate. As she notes, trust is earned, it is reciprocated and it is enhanced. She cites to best practices that help create a culture of trust, such as inviting honesty and openness, considering the best interests of others, being consistent, dealing with problems or issues promptly and learning to trust in others.

Take a Long-Term View. The different interests may constantly demand attention. Repeatedly satisfying those demands amounts to managing for the short-run and undermines the firm’s succession planning. Instead, management should strive to not react to a constant barrage of demands and take a long-term view about the interests of the firm, not any one particular group. Once your people understand that you are managing for the long-term interests of the firm, the short-term demands should lessen. Being consistent helps a lot.

Make Decisions With Culture in Mind. A firm with a strong culture tends to address transitional issues, like succession, with its culture in mind. Rather than succumb to the interests of any particular group, the firm should base it decisions on preserving and enhancing the positives in its culture. While focusing on the firm’s culture may not be exactly what any particular group wants, the firm’s culture is the common denominator understood by the greatest number of people from all interest groups. A succession plan that seeks to preserve and enhance a firm’s culture will surprise few and be accepted by many.

Avoid Favoritism. No management team can go very long without having to make a decision that will be liked by some and disliked by others. Repeatedly resolving issues reactively, especially in favor of a particular group of interests, should be avoided. As succession approaches, having a record of continually favoring a particular set of interests is counterproductive if not risky. It gives incentive to the disaffected to attempt to use succession as a time for redress. Nothing could be less healthy for firm or more destabilizing.

By its very nature, a good succession plan is an exercise in long-term planning. Conflicting interests can force management into unwanted short-term fixes that make effective succession planning more difficult. Understanding the different interests, and developing a strategy that channels them toward the long-term interests of the firm, is critical. What other steps should be taken to manage the divergent loyalties that can challenge law firm succession?

 

 

 

 

 

 

 

A customer is the most important visitor on our premises; he is not dependent on us. We are dependent on him. He is not an interruption in our work. He is the purpose of it. He is not an outsider in our business. He is part of it. We are not doing him a favor by serving him. He is doing us a favor by giving us an opportunity to do so. ~ Mahatma Gandhi

 

Early Saturday morning, as I was installing new string in my Weed Eater, my dog ate a critical part of the tool. Really.

In order to finish my weekend project, I had to run to the lawn equipment store where I’d purchased the Weed Eater for a replacement part.

Have you ever walked into a store and felt invisible?

Well, as I entered no one acknowledged my existence.

Unnoticed, I made my way to the parts & (inappropriately named) service area where, wonder of wonders, I encountered a store employee. But any hope for a better experience was dashed.

As he scowled in my direction, I interpreted his mumble to be an inquiry as to what I wanted. Determined, I explained exactly what I needed. This seemed to annoy him even more than the fact that I had clearly interrupted his morning, and he curtly informed me the store didn’t have the part I needed.

Unspoken was the inferred “now please leave, and let me get back to more important matters.”

As I walked out of the store, I realized that on my two previous visits to the same store – including the day I purchased the Weed Eater — I had experienced the same level of indifference.

Counterpoint

Determined to finish my project, I drove about a mile down the road to Top Gunn Rental. As I walked through the door, a smiling employee greeted me, and let me know he’d be with me as soon as he finished assisting his current customer.

As it turned out, Top Gunn Rental didn’t have the Weed Eater part in stock; but the young clerk quickly presented a solution. He took the part out of a larger assembly, saying he didn’t want me to have to go to the trouble of driving back to the store. Ready for the punch line?  We’re talking about a 78-cent part! True customer service!

This company will have my business for life. They reminded me that little things like a smile – or  returning a phone call promptly, keeping a client completely informed on matter status – these make a huge difference. They can even be the difference in keeping or losing a relationship.

This never changes – even in the most turbulent of market conditions.

What are you doing to make your clients feel valued and appreciated every time they interact with your firm?

 

For more than a few AmLaw 200 law firms, non-qualified retirement plans exist that are largely unfunded. Although “a good idea at the time” when established, the plans now can represent a significant burden. As James Cotterham wrote in his Retirement Basics for Law Firms a decade ago, the unfunded pension plans can be a problem. More recently, Jennifer Smith of the Wall Street Journal wrote in Next Pension Clash: Law Firms about the problem in stark dollars and cents. And in a development that may be an aberration yet demonstrative of the reason for concern, last year the PBGC took over the pension obligations of the law firm of Butzel Long after it concluded that unless relieved from the pension obligation’s burden, it would not be able to survive in today’s competitive legal environment. For many law firms, unfunded plans can impact the ability to compete.

The problem is not going away. Matt Greenslade’s Your Boomer Partners are Retiring. Is Your Firm Ready? provides a picture of the aging of the AmLaw 200 partner ranks. There are a whole host of succession issues presented by the graying of law firms, and while some firms have dodged the unfunded pension plan issue by having no such obligations, many are not so lucky. For one thing, the plans can be destabilizing. Partners nearing retirement are often protective of this benefit. Younger partners years away from retirement may wince at the existing or looming financial burden. And for managing partners trying to ward off the adverse effects of transition by pursuing mergers or lateral hiring, the overhang of a large unfunded pension plan can be a deal killer.

Finding a solution is not easy. The options, good and bad, generally are limited to four:

Try to Pre-Fund the Plan. Depending on the schedule of retirements facing the firm and the ability to model the obligations, funding the plan now instead of waiting for the retirements to hit is a possible solution. Unfortunately, tax issues and structural concerns that have made this a poor option in the past haven’t gone away. So although technically an option, it is not much of one.

Terminate the Plan. This can be the nuclear option. Depending on when the looming retirees vest in the plan, it is possible to terminate the plan as to a group of future retirees and negotiate with the vested partners and already retired partners for a settlement. Terminating a plan requires incredible will and political certainty. It pits culture and honor versus financial imperative. Like the adage about killing the king if deciding to shoot, this option needs to succeed if it is to be attempted.

Modify the Plan. A great thing about a non-qualified plan is that its flexibility allows modifying the plan to ameliorate past promises with the current realities. Options include phasing in modifications that impact partners that are a longer way from retirement age, substituting in some qualified plan options that allow a firm to pay as it goes, and buying out vested partners. Depending on the proposed restructure, a modification can garner the kind of political support that avoids pitting the old against the young.

Pay the Plan. Sometimes none of the foregoing options work or have sufficient support to implement. When this happens, the only option (other than closing) is to prepare for the obligations by strong financial planning and budgeting. A firm left in this position also needs to develop retention strategies for the partners that will see less compensation in the years ahead due to the need to financially support the retired and retiring partners. Finally, if strategic planning at the firm seeks to leave open the potential for merger, lateral hiring and bank financing for future operations or initiatives, it is essential that the retirement obligations be recognized.

Unfunded pension plans can present significant financial challenges. Seeking relief by termination or modification pits the young against the old-a volatile mixture. Yet resolving this tension may become a matter of survival. If your firm has an unfunded plan, is it taking steps to deal with this dilemma?

 

Some of us think holding on makes us strong, but sometimes it is letting go. – Herman Hesse

 

This is the final post in a series examining law firm decline, inspired by the Jim Collins book, How the Mighty Fall. See the previous four post:

The unfortunate truth for some firms that continually wrestle with the realities of decline is that continuing is no longer an option. (See Andy Jillson’s post “When it is time to say when.”)

The challenge is recognizing that your firm has reached this point before the final few options to make the best of a bad situation are no longer available to you.

The law firm facing closure has options. However, because the options become fewer and progressively harsh with time, it is important to recognize impending closure as early as possible.

The Progression of Shut-Down Options

  • Action taken early – The firm’s options include seeking  a combination with a healthy firm that is compatible in practice and culture. This typically constitutes a best-case scenario, and in addition to early recognition, requires strategic, proactive and visionary leadership.
  • Mid stage – As the firm’s position is further weakened, the full firm combination may no longer be a viable choice, but options remain. Leadership may be able to facilitate  the movement of significant pieces of the firm in a manner in which the greatest number of people have new homes, clients needs are professionally managed, leases are assumed by acquiring firms, creditors are satisfied and the firm is dissolved without a bankruptcy filing.
  • Finally, in the worst-case scenario leadership waits until dissatisfied claimants force the firm into a bankruptcy proceeding. This result is typically the least favorable for all concerned. A bankruptcy proceeding is expensive, typically results in less economic satisfaction for the claimants, and is a burden and often long-term costly distraction for the owners of the liquidating firm.

Even when persistent decline has brought you to the brink of closure, there are options.  As is so often the case, the key to the best outcome is to be realistic.  Face the situation and seek appropriate advice while it is early enough to seize the best options. Time is rarely the friend of a firm facing closure.

Is your firm facing the potential of closure?

 

In a recent post about law firm succession planning, I observed

 “Succession planning and execution in 2014 is far more difficult than it was a decade or more ago. It is not that it is harder today to identify credible candidates to succeed existing leadership; searching for the best talent is a task that has not changed much. Rather, the changing face and nature of the legal industry has made succession a more complicated matter.”

Law firm succession today means leading in a legal market that presents a new set of challenges. Unlike in the past, our market is not expanding. For the new managing partner leading in our contracting market, key market differences make the job of leadership amid the disruption a more dynamic exercise. Law firm leadership taking over the reins faces a market in which:

Annual Raises for Partners Are Not a Given. When the legal market was expanding for AmLaw 200 law firms, annual raises for partners were not only expected but also reasonably easy to deliver by raising rates or increasing productivity by adding associates.  Yesterday’s legal market is not today’s legal market.  In 2014, annual rate increases and large associate classes aren’t the norm. The impact of that reality has to be explained to today’s partner ranks-a task not always easy.

Starting Salaries for Associates Don’t Always Have to Go Up. When the legal market was expanding, many law firms sought the best law school graduates by offering market leading starting salaries. With the glut of graduating law students looking for jobs and law firm economics getting tighter, high quality associates can be added at lower starting salaries.  Smart management considers this new economic advantage in planning the firm’s future.

Growth as a Business Strategy Has Limitations. Growth alone is not a panacea for dealing with today’s market challenges. In fact, non-strategic growth not only has its limitations, but it can damage a firm. In a contracting legal market, there is less room to fix any errors made in the attempt to grow

Competition Is Increasing. New leadership must deal with greater competition from more lawyers, a growing in-house presence, the advent of alternative service providers and a willingness among traditional competitors to offer services at cutthroat prices. While competition is nothing new, the multiple forms of competition means new management have to fight a multi-front war, not a binary one.

Clients Have Greater Control. The new economic pressures, the greater competition and the range of alternatives are well understood by clients. The legal market has been tipped in favor of clients who are willing to shop legal services to get them for less. Client loyalty has been replaced with a bottom line mentality-a fact being driven home daily to today’s managing partners.

Partner/Associate Leverage is Going Down. Many firms’ demographics have evolved to partner/associate ratios closer to 1:1 instead of 2:1 (or long ago 3:1). The reduced yield generated by the smaller workforce strains a firm’s economics and compounds the challenges for the firm.

Succession planning is more than finding the next charismatic leader willing to serve.  Leadership that is aware of the new normal is incredibly important to the long-term health of any law firm.  What other features of the new market must a new law firm leader think about?