Small and midsize law firms in consolidating legal market, especially in emerging economies, usually have only two basic alternatives if they want to continue to compete effectively for the highest-value work from the best clients:
- Grow in order to continue to be able to meet increasing client needs for service delivery capabilities in large matters and for greater geographic reach; or
- "Shrink" to a boutique, specializing in one or a few practice areas in which the firm can offer a differentiating high level of expertise.
These options also confront small and mid-size firms in mature markets, such as the United States, Canada, and United Kingdom. Neither of these strategic paths is easy; but, if executed intelligently and with discipline, either one can produce very good results.
There is a third way, however. Some law firms, especially small first-generation ones, conclude that, rather than build a lasting business institution that will survive for many years after they retire, they are more concerned with producing a reasonable level of income and professional satisfaction for themselves and their colleagues. They acknowledge that this course of action will create an added risk of loss of key clients, whose needs for legal services might grow beyond the capacity of their firm to satisfy. They also expect, and plan for, a day when most or all of the partners are ready to retire and will wind up the firm's operations.
Of course, such a response to a rapidly consolidating, increasingly competitive legal market is not right for every firm, but for some firms, that might be the most successful and satisfying long-term result.
I am reminded of Stephen Mitchell's magnificent modern translation of Chapter 80 of the Tao Te Ching (Harper Collins, 1988):
If a country is governed wisely,
its inhabitants will be content.
They enjoy the labor of their hands
and don't waste time inventing
labor-saving machines.
Since they dearly love their homes,
they aren't interested in travel.
There may be a few wagons and boats,
but these don't go anywhere.
There may be an arsenal of weapons,
but nobody ever uses them.
People enjoy their food,
take pleasure in being with their families,
spend weekends working in their gardens,
delight in the doings of the neighborhood.
And even though the next country is so close
that people can hear its roosters crowing and its dogs barking,
they are content to die of old age
without ever having gone to see it.
Interestingly, most legal management consultants do not appear to be interested in working with these law firms. I believe that our firm, Walker Clark LLC, is an exception. Our goal is not to drive our clients to goals -- such as dramatic growth, bigger profits, or a worldwide reputation -- that we have pre-ordained for them, but instead to help them to define and meet the goals and aspirations to which the partners and people in each firm want to dedicate their professional lives.
At the same time, we do encourage them at least to visit the "next country" to find out what the dogs are barking about, even if they decide not to stay there.
Norman Clark
