I think the chart is visually striking by itself, but here’s how I’d summarize it:

• In 2005—’07, two-thirds of firms in the Citi dataset enjoyed two up years in a row, only in in four had an up year and a down year, and only one in 7 had two down years.
• But in 2012—’14, the industry was basically divided into equal thirds: One-third up and up, one-third up and down, and one-third down and down.
• Citi performs the same analysis on PPP and, if anything, the dispersion is even more striking: Pre-GFC, nearly three-quarters of firms had two up years in a row and only one in 30 had two down years, but in 2012—’14, fewer than half of all firms had two up years and one in eight had two down years.

For purposes of present discussion, may we stipulate this is the diagnosis?

Let us then proceed pragmatically to ask, “What’s to be done?”

At the highest level, one again finds a consensus among the Big Three reports: Clearly defined and differentiating, and crisply executed, strategy matters more than ever.

As I’ve written at length in this annals, “strategy” is many things but it is emphatically not a statement of platitudinous values, real or aspirational. A few other things it is not:

• Not a little bit of this and a little bit of that;
• Not offering a sop to every conceivable constituency;
• Not saying “yes” or “maybe” or “some day” to virtually everything; strategy worthy of the name means saying “no;” and finally
• If you’d like an acid test—I admit, I’m particularly fond of this technique—not a statement whose polar opposite is nonsensical.

The last point deserves a moment’s explication. Pretend your firm’s strategy is “to deliver impeccable client service on matters of the greatest consequence in an environment of thorough professionalism.” With me? (You may have heard statements topologically indistinguishable from this in your immediate neighborhood.) What, then, is the “polar opposite” of that statement, and is it nonsensical?

“To deliver deplorable client service on matters of trivial import in an environment of sketchy ethics.” Nonsensical? Yes.

Conversely, pretend your firm’s strategy is “to become the leading land-use firm in [major metropolitan area] within three years.” The reverse? “Not to become…[etc.].” Nonsensical? Hardly; perfectly sane and understandable.

But let’s move along here.

How do the Big Three think we as an industry are doing on responding to the challenges of (a) a buyers’ market; and (b) accelerating dispersion of results?

• Altman-Weil: “The majority of change efforts can be characterized as limited, tactical and reactive.”
• Georgetown: “Law firms have responded to these changed market conditions in largely passive and reactive ways.”
• Citi: “Client demands for more efficient delivery of legal services, and pressure on margins, have already caused firms to think differently about how they deliver legal services, and we anticipate more of this. Firms have begun to focus more on understanding the cost of running matters.” (Can you say, damning with faint praise?)

If you view these changes as systemic and not cyclical, and as profoundly focused at the heart of the supply/demand intersection for BigLaw, why no greater sense of urgency?

For the first time, at least in my reading of these three reports, serious attention is devoted to the psychology and dynamics of change within law firms. Again:

• Altman-Weil: “Leaders must become more forward-looking and get every lawyer in the firm to look into the future with them and understand the impact of trends already in motion. Ask your partners what they think their practices will look like in eight to ten years if the forces of commoditization and technological change progress at the same or increasing pace. Without a substantial number of partners seeing a different future, little is likely to happen. Start with the ‘why’ and educate your partners more widely and deeply on how market trends will affect their practices. Every time you change one mind you will gain an apostle to communicate the change message to others. Leaders get people to do things they might never do otherwise.”
• Georgetown: “Making significant operational changes…is hard and inevitably runs into stout resistance from partners who see no reason to change methods that have ‘always worked before.’ … Most law firms remain locked in a ‘billable hour mentality’ that makes it difficult for their partners to think creatively about alternative approaches to legal service delivery. …. Most still retain the billable hour as their keky metric for other purposes [including] lawyer evaluation and compensation, matter or project budgets, and the profitability of matters.”
• Citi: “Leaders of successful law firms recognize the need and challenge of adapting their firm cultures to the changes in the market. For most firms, this begins with getting partners to leave the status quo behind and focus on the need to adapt to changes in the industry. This includes acceptance of a flat demand environment and the need to become more of a business developer. It means making greater use of technology and possibly a new leverage model. It also means
  understanding and accepting the likelihood of PPEP volatility.” (Predictably, Citi is the most measured in the rhetoric they deploy.)

If you’re like me, you have to ask yourself at this point whether firms don’t see the need for change or see it but prefer not to?