I’ve spent time at several of these firms, and because I’m a curious fellow and genuinely interested, I like to ask people about their backgrounds: “Where did you come from?” “What do you like about what you do?” “Why are you here?” “Tell me about your colleagues.”
The answers reveal commonalities:
- Many—I bet most—of them came from other firms, some ostensibly more prestigious, but where they didn’t really seem to fit in;
- They love what they do because they’re appreciated for what they do; virtually all of their colleagues do pretty much the same thing, or something highly complementary, and shop talk is natural and seamless;
- And they know that for what they do there’s no better place to do it.
Let me go back to the “secret sauce.”
Other firms can’t afford—and it makes no sense—for them to invest in deep optimization of processes in practice areas that aren’t core to their business. Category Killer firms have one and only one practice area that’s really core to their business, so the question of how much to invest flips from “what can we afford in this marginal area?” to “how can we not invest as much as we can as fast as we can to build insurmountable barriers to entry?” Guess what: They’re building insurmountable barriers to entry.
And, as with the migration of talent, you can see it with the erosion of the Category Killers’ targeted practice areas in the rest of the industry. Employment law is probably the poster child example. More and more mainstream firms are cutting back on, de-emphasizing, disinvesting it (choose your euphemism) employment law. (Maybe everyone claims they do boardroom level executive comp packages, but that’s no one’s bread and butter.)
Now, do these firms have management challenges? Join the club; all firms do.
