Law firms ready to ring in the changes for uncertain 2010". I've had to re-read it since the first time I read it I experienced such a depth of anger, frustration and depression that I almost broke my computer.
The article interviews some of the great and the good from the profession and states that "Senior figures have highlighted a number of challenges that firms need to meet to sustain profitability in 2010 and beyond". Just before I get into the detail of the article I'd like to highlight a couple of things from that sentence. Firstly - a firm cannot thrive by meeting challenges. That suggests passivity - waiting around to see what challenges there are before finding a response. The thriving firm will force its way forward - bravely setting a strategy and offering a dynamic operational excellence in support of it. My second issue is that if any firm has waited until January 2010 to know what it will do to survive the year - I suspect it will not.
Ok - let's look at what these leaders are suggesting. Peter Kalis from K&L Gates suggests"
The law firms that remain conservatively financed and diversified across nations, markets, currencies, practices, industries and clients will absorb the shock of the seismic events in the global economy. Other firms will disappear or fade into irrelevance.Oh dear - this is not a strategy. Why should firms remain "conservatively financed"? Surely that has got firms to where they are now? Why don't law firms look for other sources of finance? I suspect it is because it would involve an uncomfortable change of style for most partners - one in which they were expected to perform every year (and would be measured in something other than billable hours) and one in which the firm had to become more like a business. I agree with some of what Mr. Kalis says - but it's not very brave is it?
Charles Martin at Macfarlanes says :
...prudent law firms will continue to sharpen efficiency levels, look at better client service and improve ways of organising themselves internallyFirms should have been doing that a long time ago! This should not be news for any firm.
Michael Porter (and a shocking number of people who run law firms do not seem to know who he is):
The root of the problem is a failure to distinguish between operational effectiveness and strategy...I can summarise Mr. Porter as follows: operational effectiveness is doing things better; strategic advantage is doing better things. Operational effectiveness must be assumed - it is the firms that bravely (and carefully!) do something different that can hope to not just survive but to thrive in 2010 and beyond.