Law firms -- indeed, most professional services firms -- will be confronted by some formidable challenges between now and the year 2030. Consolidation of the legal market, the emerging dominance of large service providers with national and global capabilities, a continued profitability crunch, and increased competition for professional talent are probably the most obvious threats to continued success.
Independent small and midsize firms are the most vulnerable.
Unfortunately, these challenges are natural phenomena in the maturation of the markets for professional services. Even worse news is the fact that there is no grand strategy that will work for every firm. Instead, Walker Clark's experience working with law firms of all sizes in more than 65 countries suggests that law firms should collect and master a set of strategic skills -- a strategic survival kit.
Consider whether you have mastered these tools, or, indeed, whether your firm has them at all. Here are seven examples, in the form of questions that every partner or owner of a law firm should ask. They are not listed in order of priority, because their relative importance is firm-specific; but we have found each one to be especially relevant and important to small and midsize firms that want to be able to continue to compete at the same levels of success that they have previously enjoyed:
- Do your partners make serious investments of time and money in developing and retaining your best associates?
- Do you understand the hidden factors that prevent you from being more profitable in a changing market?
- Do you know the specific things that you as a partner must do to lead and manage change in your organization?
- Do you have client relations and market intelligence methods that allow you to anticipate and plan for changes in client expectations?
- Are your partners focusing on work -- billable and non-billable alike -- that produces the best return on the investment of their time?
- Can you explain, in clear, relevant, and demonstrable terms, how your firm is better than your competitors?
- Does everyone in your firm understand the specific implications of globalization in your legal market and for clients that you want to serve?
Before you answer "yes" to each of these questions, look around your firm. To what extent do you see unequivocal evidence that you have these seven tools in your firm's "survival kit" and that people are actually using them?
These seven tools work in large firms, as well; but they can be especially powerful in small and midsize firms because of their high return on investment.