In the past 24 hours, I’ve spoken with the managing
partner/chairs of two AmLaw 50 firms, and I heard
something from each that I hear altogether too
rarely:
They know what their firms are not going
to do, or be.
The first put it in these terms (I paraphrase):
"Our
firm is focused on clients in industries A, B,
and C. Period. We’ve stated that
repeatedly, that focus guides our recruitment,
that focus guides what we invest in internally. I
can’t tell you the number of times we’ve had
overtures—some of them attractive—to
open an office in Chicago or in Atlanta. But
there isn’t any A, B, or C industry base in Chicago
or Atlanta. So why are we going to do that? The
answer is that we’re not."
The second is
in the midst of a decade-long (or longer; the
jury is, as we say, out) effort to reposition
his firm from a strong and perfectly respectable
regional player to a firm with a global footprint,
and I’ll paraphrase his observations as follows:
"Understanding
the drivers of profitability is about more
than rates, margins, leverage, and realization;
it’s about what business you will or will
not do. Too many firms get in a lather
about pursuing any hour that’s billable;
we’re more about what we will not do."The New York-based ‘bulge bracket’ firms
(Cahill, Cleary, Cravath, Davis Polk, Shearman
& Sterling, Sullivan & Cromwell, Simpson
Thacher) have known this all along, and they’ve
never diluted the work they do; but the rest
of us are still learning how to do this. Now,
when you’re in the midst of changing your
stripes, you get some pushback from clients. That
requires you to have discipline."Ultimately, this links in to how you make
decisions about promotion to partnership,
and in the long run changing the mix of people
leading the firm. You’re going
to have to break some eggs to get there;
the challenge is to break enough eggs so
that you’re actually having an impact, but
not to break so many that the roof caves
in."
I came away from both of these conversations
more convinced than ever of the wisdom of the
observation (David Maister has
made it, although
others may deserve equal credit), that Strategy
means saying no.
These two firms know how to say no. Has
your firm said no lately?
