If you didn’t rethink, restructure and retool during the past few years, brace yourself. You’re in for a bumpy ride.
We are living in a permanently changed world because life prior to the pandemic won’t come back. The truth is that what got you here, won’t get you there. This why strategy developed pre-pandemic means nothing now.
Smart legal market strategy is foundational and must be developed to flex in real time to respond to primary market conditions that involve people and money.
Gone are the days when talent of all descriptions would stay put at a law firm. Enforced loyalty — an attitude and behaviour supporting a notion of “the firm before all” — that at one time was a point of pride in some law firms is finished.
Prior to the pandemic and much worse since, law firm partners, associates and legal service professionals of all stripes have been sloshing in a frothy job market. They’ve been trading one firm for another, setting up their own shops, going in-house, and changing industries to the point where one now needs a program to tell the players.
The pandemic taught many people that they alone are responsible for their happiness, health and career. They also learned that change can happen, regardless of whether it’s a job-seekers market or not.
Now, and in the days, months and years to come, law firms and legal service providers that buck that reality will lose dearly in terms of attracting and retaining strong talent. They will also erode their brand in the legal market along with goodwill.
However, firms and providers that embrace our changed world of work, find a give-and-take balance, and build upon it in “people-first” fashion will be winners.
Alumni programs and secondments, whether short- or long-term, are investments in people that pay enormous returns to firms that have the vision, fortitude and management skills to institute them. So are educational opportunities, such as business training and management coaching that are often provided as benefits in other industries, and which need to be baked into the development of all professional talent in the legal sector.
For example, being a lawyer doesn’t always equate to being business-smart. I recall being aghast years ago overhearing a senior business lawyer ask, “What does ‘variance’ mean?”
Measuring budget against actuals, determining variance, and financial forecasting are basic business practices that are still not taught in most law schools. This is concerning to say the least and could lead to negligence at the worst since many lawyers deal with corporate matters without a solid grounding in basic business.
Principles of basic business do not include the well-worn practice of paying out 100 per cent of profits to partners, even though most firms do so.
Thankfully, there are law firms, such as U.S.-based Cozen O’Connor that woke up, smelled the coffee, ate a bowl of business for breakfast and declared that paying out 100 per cent of profits to partners is folly. The firm also believes that spending money on business development and branding opportunities is good business as is investing in infrastructure, all of which have been Big Four growth strategy cornerstones forever
It seems Cozen has decided to rethink, restructure and retool, and build business in step-by-step fashion by publicly declaring plans to grow in key target markets over time as part of a nothing-fancy strategy.
This firm is taking a page from the Big Four’s strategy book, which is a pretty good read about growing a professional services business in steady-as-she-goes fashion even though it hasn’t always been smooth sailing.
Still, the Big Four have been quietly building in a seemingly boring, nothing-fancy manner since time immemorial and as a result, are steadily eating into the traditional legal market and will continue to do so.
Being boring is the long game. The short game involves being distracted — like a crow by shiny things — on passing fancies, such as crypto and cannabis that may have been attractive at one time, but aren’t now unless you practice insolvency.
Other long- but now short-games include various areas within traditional practices that have best-before dates. These would include matters within personal injury that began declining when safer vehicles went on the road years ago and dropped drastically when many of those vehicles stayed parked during the pandemic. The best time to have restructured this type of practice was 10 years ago. The second best time is now.
Short gaming is one of the reasons we are seeing legal industry mash-ups that include mergers, tie-ups and bolt-ons. These are often upshots of a continuing craze of law firm combinations that are happening because three years of boom are going bust and people are scared. And when people get scared, they’re often scared stiff.
Do you remember Aesop’s fable, The Oak and the Reeds? During a hurricane, the mighty oak that boasted about his strength toppled and died while the flexible reeds yielded and lived.
None pivoted. Forget pivoting. Unless you’re a football quarterback or a weather vane, pivoting is an overused word for a tactic that simply means to turn in place. Instead, do something — anything — to move to where you’ll get a new perspective and gain insight into what you need to do to get to where you need to go.
The astute and flexible among us did a rethink, restructure and retool during the past few years. I overhauled my practice last September and even though it was hard work and didn’t happen fast, every second and dollar was time and money well spent. As a result, I’ve become even more of a go-to expert for law firms and legal service providers needing guidance to develop smart and sensible strategies that enable them to win in their chosen markets.
Still, it’s not too late to rethink, restructure and retool whether you are part of a corporate entity, firm or an individual. Now is when.
I am certainly not Aesop and this article is not a fable, but it has a moral and it is this:
Clinging like a barnacle to “what was” does not serve you well. Instead, work to your strengths and acknowledge your values. Cleave to them, and build your life and livelihood around them. Keep your tools sharp, your head up, and stay out of the weeds.
* My next article will explain the difference between strategy and planning, and why “strategic planning” is an oxymoron. Watch this space.
Heather Suttie is an internationally recognized legal market strategy and management consultant to leaders of premier law firms and legal service providers worldwide.
For 25 years, she has accelerated performance within law firms and legal service businesses — Global to Solo | BigLaw to NewLaw — by providing consultative direction on legal business strategy, market strategy, management strategy, and client strategy. The result is a distinctive one-of-one legal market position and sustained competitive advantage culminating in greater market share, revenue and profits.