First, as much as we might like to think of ourselves as captains of our ships and deft maneuverers around the landscapes of what practices and geographies are hot, we are all subject to macroeconomic forces. As one of my favorite Managing Partners likes to remind his troops, “In the long run, we can’t do better than our clients.” A little humility, and perhaps a little portfolio diversification, might seem in order.
Second, if the only information you had available when you were contemplating a merger with an Australian firm looked like this:
Or, the world as we knew it in 2012 when these bets were being placed, it looked like the most obvious play in the world. All lines heading up and to the right!
So again, humility to be sure, but one other thing: How about some scenario planning? Surely had that exercise been undertaken in a serious and thoughtful way ca. 2012 one of the scenarios would have looked recognizably like what actually did unfold, we now know with benefit of hindsight.
Lest you assume this train of thought only applies to the historic one-off event of UK/Aussie law firm tieups right around the peak of the commodity boom, far from it. It applies to every decision by law firms to enter new markets–be they new metropolitan areas or new practice areas–in serious and substantial ways. It applies to single-city firms in (say) the US Midwest thinking of opening a second office and to firms “known for” XYZ thinking of expanding into UVW. Yes, we can stipulate that “the most likely forecast of the weather for tomorrow is the same as the weather today”–the linear extrapolation, in other words–but you need to think seriously and hard about other ways events might play out.
Not that you should make no bets: I will be the last voice you will ever hear advancing that counsel of cowardice and despair.
But that you might have at least thought about a Plan B when the linear extrapolation that produced Plan A dissolves in tears.