Rare is the law firm that goes through the hard, nay soul-searching,
work of developing a strategic plan. The good news is that for
the huge majority of firms none is needed: They’re small, local
shops; or they pursue the specialties and interests of their founding
partners (e.g., they’re plaintiffs’ shops or real estate specialists
or tax wonks); or they’re simply fortunate enough to enjoy highly circumstantial
barriers to entry (a local family pedigree, political connections, having
a reputation for being the "go-to" firm in a micro-market such as that
for representing residential co-operative apartment buildings in Manhattan)
and the intrinsically rich profit margins that come with that unusual
territory.
Then there are the other firms that need such a plan.
This blog, in case you hadn’t noticed, focuses on the AmLaw 200—so
within that universe, who needs a strategic plan and who doesn’t? My
MBA genes are screaming, "Everyone needs a plan!," but they don’t always
win the debate. So let’s segregate the landscape:
- Super-star firms know who they are; "to thine own self be true" is
the full text of their strategic plan. These are, as a jaded
(or realistic) industry consultant once remarked to me, "the only 50
of the AmLaw 100 that matter." They are, as Skadden’s marvelous
slogan has it, the "leader[s] among law firms." - Others own specific practice specialties: IPO’s, bankruptcy,
patents and trademarks, project finance, macha-league antitrust defense. Membership
in this group overlaps with membership in the first group but the
groups are not coterminous. - Which leaves us with a lot of other firms belonging to neither group.
Who are these firms? By and large, they’re AmLaw "second 100"
firms. Realistically, they will never achieve the gold-plated name-brand
status of the "bet your company" firms, nor, given human nature and what
I’ll call transition costs, will they ever morph into an equally economically
viable, but opposite, model: The exceedingly efficient, maximally-automated,
high-volume, low-cost specialist. (I’ll have more about this alternative
model in a later post; for now, think Wal-Mart, not Cartier—the
key take-away being that both are extremely profitable and both compete
in the same space called "retail.")
Most vulnerable in this mid-market second-100 space are firms that lack
a competitive distinction or "unique selling proposition." These
firms typically offer the usual panoply of corporate, litigation, tax,
and real estate services across a region, with little or nothing to differentiate
them from their peers in the eyes of clients. Business is inherited,
or comes from the usual labor-intensive connections (joining, speaking,
writing, presenting) with no conspicuous marquee attraction.
These are the firms that need a strategic plan. Some figure that
out and do it with, so it seems so far, conviction and grace—as
reported about Ropes & Gray of Boston.
Others have no plan and are at the whim of "bad
luck."
I suggested in "The
Dynamics of Conflicts" that the "second 100" may
increasingly be populated by the likes of Boies-Schiller and firms with
business models based on utterly different assumptions than required
to ape the "50 that matter." But for more mainstream
firms that want to survive and even to thrive, tomorrow’s more savvy
clients and more competitive landscape mean, at the very least, a commitment
to:
- a surpassing level of understanding your clients’ businesses, not
just providing technical expertise; - a willingness to engage in billing for value received (whether this
helps or hurts you this month); - being flexible, and anticipating issues for your clients;
- an extraordinary dedication to service (not to be confused with technical
expertise); - innovative and cost-effective technology investments; and, may I
say it again; - a surpassing understanding of your clients’ business.
This Hildebrandt/Legal Week piece contains a few of the same thoughts.
Memo to the AmLaw "second 100:" Engage a strategically
astute MBA. The ranking you save could be your own.
