I’ve written before with some passion about the need for law firms to think and to act strategically. The "act" part should follow as the day the night, but of course it’s not that simple.
Why does this matter? Why is it, in fact, a deadly serious matter for your firm if you are, or aspire to, AmLaw 25 global-footprint membership?
Consider that firms in that stratosphere are, or shortly will be, pretty much billion-dollar-a-year enterprises. Quick Quiz:
- Q.: Name two public companies recognizable to Joe Six-Pack whose revenue is just about exactly $1.0-billion/year.
- A.: JetBlue, and Harley-Davidson.
Now ask yourself what percentage of Joe Sixpack’s—or, let me hasten
to add, your neighbors, siblings, and even your children—could
identify Skadden-Arps, not to mention Baker & McKenzie, Latham, Jones-Day,
Sidley, or White & Case? Yet
all are comfortably north of $1-billion/year in revenue.
Add this: Management consultants typically use a multiplier of
4-6 when comparing the complexity of managing a professional services
firm with a typical manufacturing or retailing firm. In other words,
the "Complexity Quotient" of managing your law firm equates
to the complexity of running an auto dealer, a construction company,
even a pharmaceutical company, that is five times your size in revenue.
So I’ll ask again: You think your firm can do without strategic thinking, and strategic execution?
Nevertheless, my friend Aric Press (always a delight to read for the
felicity of his style) writes in
this month’s American Lawyer that the best-laid strategic plans
often lead to naught:
"We all know the drill. First come the memos to the committee,
the flow charts, and the Power Point. Then comes the expert advice: the
buffed MBA’s and the former this and the retired that wheeled in to bless
the endeavor. The product of all this effort is duly presented to the
partnership. And then what? Too often, as I listened over the last month,
the answer was not much."
And that would be why exactly?
As Aric points out, deciding on a strategy entails making choices. But
how many firms like to think of themselves as good at everything? To
all those firms, I say: "You may have strengths, but by no
stretch of the imagination do you have a strategy." Although
Aric doesn’t cast the issue quite as I do, he makes the pointed observation
that for such a firm to move from the mush positioning of being all things
to all people to a distinctive (and credible, ownable) focus requires
that partners exhibit a "willingness to be led." Here, of course, he
has put his finger on it.
Consider the status quo from the perspective of your typical mid-career
partner at an AmLaw 25 firm: "I’m making [say] $1.5-million/year,
and I can expect that to increase comfortably above the rate of inflation
for as long as I care to keep working. Sure, I work hard,
and it’s true that even equity partnership has lost its bulletproof
job security, but I’m good at what I do and I even like most of my
partners and clients. What’s wrong with this picture?"
Rob Millard, a partner in Edge International and
a friend (we had the distinct pleasure of being able to sit down together
twice
in the past week in New York, once as he was on his way from
Johannesburg to Phoenix, and again on his return), makes
the point that it’s emotionally difficult—he doesn’t say
bordering on the impossible, but you can read between the lines—for
those in positions of wealth and comfort to embrace change, even to
deal with a long-term threat to their privileged position.
"Just like the camel could not pass through “The Needle†[a
very narrow gate in the wall of ancient Jerusalem] with its baggage
intact, so a strategist cannot embrace new paradigms with the baggage
of his or her old thinking intact. The same goes for those that have
to execute the strategy. If encumbered by “old
thinking,†they
simply cannot make the intellectual transition necessary to execute,
especially when the old thinking has led to current prosperity and
comfort and the change is necessary to address something that is looming
in the future rather than causing actual immediate pressure."
Shall we then despair of firms—prosperous, seemingly solid firms,
at any rate—ever embracing strategic thinking and strategic
execution?
I for one refuse to: Lawyers (particularly the lawyers we’re dissecting
here) are among the brightest and most analytic people around. The
consequences of developments that could threaten business
as usual can be explored, discussed, debated, and dealt with in forthright
and clear-eyed fashion.
I further believe that most lawyers at the top of their careers devoutly want to
build lasting, sustainable firms with impeccable pedigrees, that stand
for something tangible and worthy.
Writing about "What it Takes to Be Great," David Maister has this to say:
"First, I don’t think you can create a sustainable, ongoing great firm unless there is a broadly-held sense of stewardship, with each partner or senior officer feeling that they do not own the firm in perpetuity, but hold it in trust to be passed on in better shape to the next generation. Anything other than this culture will fail to build an institution that can live on."
So my question morphs into: What do you as a partner in your firm
(or partner wannabe) hold "in trust?" If the answer is, "Let
me get back to you on that….,"
your firm is not yet great and it definitely needs a strategy, which is,
if I may say so, the firm’s equivalent of a soul.
On the other hand, if the answer is, "Can I buy you a drink? I’m
so excited to talk about that!," then you have a strategy in your
heart and can articulate it in your mind.
What’s your answer?
