Law firm leadership is at a proverbial fork in the road. The people running law firms can continue to do business as usual, or they can lead their firms toward a model of business that reflects the new and still evolving client expectations and market demands. (Much has been written about the challenges of relying on lateral acquisitions for growth, but that is a game that will always be played, so I will stick to a review of broader leadership and operations issues.)
Business as usual means trying to squeeze modest growth out of reduced expenses, increased billable hours, and hourly rate increases. That is how it has always been done, right? But think about this. Everything that clients are telling us, and every market trend is confirming, that law firms cannot count on more hours and higher rates for long-term growth. The business as usual strategy is out of alignment with client preferences and the clear shift is to use value as the primary driver of client satisfaction. For some law firm leaders, modest short-term growth is fine. It might get them through the balance of their term as managing partner, or, in some cases, sustain the firm long enough for them to retire. Bold leaders need to do more.
The word “innovation” can sound intimidating, so we suggest that law firm leaders think about it as moving from good law to Great Law. It is not enough to be a forward-looking leader in the current environment, it is critical to be forward-acting; that means being committed to modifying compensation systems, improving talent acquisition and development throughout the organization, and recognizing lawyers for making important contributions beyond the delivery of legal services (recruiting, account management, sales, mentoring, etc.). Great Law means investing in training, coaching, and technology to support client service excellence, revenue generation, and legal project management skills.
This forward-acting approach might seem radical, but the evidence of a shrinking, hyper-competitive market is overwhelming. Millions of dollars are being invested in businesses that offer alternative legal services, clients are bringing work in-house, and many firms are getting serious about winning and keeping clients. If your firm is not, it could be left behind. And, it is important to note that the need for visionary leadership is size agnostic (immaterial?) — Great Law is not just the province of Big Law. The need to be more strategic, make investments and operational improvements exists equally in the smaller and middle-market firms. Great Law is also authentic.
Well-managed, forward-acting firms will experience the benefits of a Triple Bottom Line (TBL), an approach introduced in 1994 by John Elkington, which measures financial profit and the value created for people and the planet. In a law firm context, a TBL can be measured by three standards:
- Is your law firm the preferred place for the most profitable clients to do business?
- Is your law firm the preferred place for the most talented people to work?
- Is your law firm the preferred place where the most inspired leaders want to serve their communities?
Legal marketers can play a pivotal role in this transformation process. If you are familiar with the book Watership Down, you know that a group of rabbits were saved from the excavation of their warren because one of the group, Fiver, had the foresight to see the danger that lurked in the future. Seeing patterns in the environment around him, and using his strong intuition, he led a number of his colleagues on a journey to a safer place — the trip was not without risk or peril, but it was necessary for survival. Legal marketers can play that role. To help your firms achieve long-term success:
- Develop and recommend programs that bring the voice of the client into your firms — let them tell you where you need to be to serve them in the future. Recommend and lead client feedback programs.
- Bring market data to the attention of management. Insure that leaders are aware of the mismatch between business as usual and the new marketplace. Become a student of innovation — not just in the legal profession, but in the corporate and start-up worlds, as well.
- Suggest that the firm use a new set of metrics and key performance indicators (KPIs). It has been said many times that “what gets measured, gets done.” Recommend new accountabilities and KPIs (in addition to client satisfaction), both financial and human. Are key clients growing or declining in revenue? Are there patterns of lawyer attrition that might suggest disillusionment with the current strategy?
- Are you using every available metric to find how clients are finding your firm, using you lawyers, buying legal services generally, as well as how your competitors are threatening and possibly displacing your firm and brand? Big Data is no longer a futuristic concept — it is a competitive necessity. There are a number of talent analytics that you can apply throughout the firm to identify those with special skills and those who need training.
Insist to firm leadership that the lawyers and staff have the right service skills to create Superfans among clients, and that the lawyers have the sales skills to attract and grow clients. Legal marketers are in the best position to recommend training and coaching programs that improve critical skills.
Legal marketing professionals can be the leading force in the move to Great Law. Fiver was not a strong personality, nor was he one of the powerful leaders. But he could see the future in ways that others did not, and he refused to sit by silently with a dangerous future looming. Show your firm the path to long-term success. And never give up on greatness, it is a matter of conscious choice and discipline.
Jim Durham is a Managing Director with GrowthPlay, which helps firms and companies build growth with a more efficient sales force and business development strategy. Jim has served as the CMO of three national law firms. He may be reached at email@example.com.
The views expressed in the article are those of the authors and not necessarily the views of their clients or other attorneys in their firm.