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

Big is better. Size Matters. We hear those statements all the time and in all contexts. More than a few law firms agree and have adopted growth plans in order to enhance their present status and prospects for the future. Many have grown through mergers, no doubt because management believed that growing existing practices, adding practices or expanding the firm’s geographic reach fit within the overall strategic plan. Some of those combinations seem successful; others have accomplished little while a few have proved disastrous.  As for many of the recently merged, the jury is still out. Only time will tell whether the combinations will work.

Growth through merger is one way to grow. But because a potential merger is not readily available all the time or desirable for some firms, many firms instead turn to lateral hiring to fulfill their strategic vision.

There are a lot of reasons lateral hiring proves to be a good alternative to merger. A firm trying to hire laterally can narrow its acquisition to the most productive attorneys and ignore attorneys that add little. Romancing the lateral may be easier because the hiring firm can more intensely court the potential lateral by focusing only on the lateral’s desires and aspirations. By directing the discussion with the lateral to the potential for an improved platform, access to a broader client base and better compensation, the likelihood of sealing the deal becomes a distinct possibility.

The thrill of the hunt aside, the hiring of a lateral attorney, even with a strong book of business, can bring some negatives. Specifically, Continue Reading Law Firm Lateral Hiring–A Double Edged Sword

 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

 

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

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

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

 

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