There is no simple answer to the question "why did a law firm fail?"
This is the first in a series of posts that will point out some of the most frequent causes.
Each situation truly is unique, and almost always is the result of a combination of factors. In today's highly competitive legal market, it does not take a "perfect storm" to sink a law firm. Sometimes heavy winds and light rain can be enough.
It is also important to remember that for every one law firm that has dissolved due to financial or organizational failure, there are many others that have continued to struggle on, often against a persistent downward spiral. As my great-grandmother used to say, "they actually are dead, but can't afford their funeral expense."
One of the most common factors is a failure by law firm parts to observe and anticipate the need to change. Sometimes this is a failure to perceive what is going on in the external legal market. Equally often, it can be a failure to notice trends within the partnership and the practice that require well-informed, well thought-out attention and, in many instances, significant change if the firm is to survive.
This is where strategic consultants such as my Walker Clark colleagues and me can add substantial value. We can point out the need for change before busy partners notice it. We can also help a partnership overcome the intellectual tendency that many of us lawyers have to deny that the risks exist or, even worse, to try to rationalize how they do not apply to us.