"Confronting reality requires tough decisions."
The culture of a law firm in good times is a reliable predictor of how it will function in an economic crisis.
This article, first published in 2008 at the outset of the Global Financial Crisis and recently updated, has proven to be even more instructive for law firms that are still struggling now to emerge from the COVID-19 pandemic. The best way to manage a crisis and to prevent or mitigate its return in the future is to face it head-on.
A natural tendency for many lawyers under stress is to retreat into their own practices and try to wait out the storm. They might spend less time at the firm, and more of that time in their individual offices with the doors closed. Lacking the communication they need for encouragement from each other, partners may become isolated from the same professional support systems that prompted them to practice together in the first place. Some partners may eventually feel chronically anxious and depressed. Partners become passive and resigned, losing their optimism when their colleagues and clients need their leadership the most.
If partners have had ineffective and time-consuming decision making practices in the past, the economic stressors will only compound their inefficiencies as a group. There is an old saying that “a crisis brings people closer together.” A keener sense of urgency will sometimes allow partners to set aside old negative patterns of behavior or even to refocus their thinking in new and creative ways.
However, when the dust settles, the decisions still need to be implemented. Without the strategic, structural, cultural, and economic foundations in place, most law firms will have difficulty moving beyond momentary “good feelings” of group camaraderie. This is because their trust in each other will be tentative, at best.
Confronting reality requires tough decisions. If partners have a disciplined approach to reaching the root causes of their problems, they are less likely to react in fear and more likely to implement sustainable financial solutions. Understanding and confronting what is causing current economic vulnerabilities demands an intellectual courage is much more than scrutinizing expenditures, line by line.