Mirror, Mirror On The Wall, Who’s The Fairest Law Firm of All?
In a lot of ways, law firms can be like those awkward adolescent years: growing faster than they can handle, not sure of their place in the world, wanting to be like the other guy.
As I’ve stepped into this new role leading The American Lawyer, I’ve had the chance to both think about how we may adapt a long-running brand without losing its roots, and speak with law firm leaders and consultants about how the legal industry can do the same.
I keep coming back to the same concept: Know who you are. Or at least know who you realistically want to be, be OK with that, and hold true to it. This doesn’t mean don’t adapt and innovate. By all means, adapt and innovate, but do so in an effort to fulfill your stated strategy. And rarely is reaching a certain profits per equity partner a strategy.
There are so many trends within the legal industry right now that come back to this concept of knowing who you are. Law firms are hiring not purely with a book of business in mind, but for specific niche practices. And they are doubling down on the practice areas that are their core strengths. They are beginning to pay their partners differently, more in alignment with their values, and that isn’t always led by origination.
But there is still this lure of the old way of doing things. Despite a seemingly laser-like focus on profits per equity partner, law firms still operate as a top-line driven industry. Growing revenue remains the main focus for many firms’ strategic initiatives and is by no means a bad goal, but based on conversations with consultants, profitability (not profits per equity partner) needs to start playing a bigger role.
With realization rates dipping as demand for legal services stagnates, growing revenue can’t be the only focus. Better management and alignment of talent, and perhaps fewer lawyers, are important while focusing on the profitability of work in such a climate is essential.
For firms at the top of the Am Law 100, owning their niche—their differentiator—has proved easier. They are increasingly pulling away from the pack as the “it” firm for M&A or structured finance or cross-border transactions, etc.
Looking past the Am Law 50 and into the next 150 firms shows a different picture for many. Offering that differentiation and holding true to strategic goals becomes more challenging when they don’t have the same pool of cash to throw at laterals. The allure of revenue growth wherever they can get it makes focusing on profitability less of a priority. There are certainly firms of all sizes with innovative strategies or marquee practices. But for so many in that 50-200 tier, consultants say, they all look the same.
That’s where the crossroads comes in. Do we, and can we, continue to do all of the same things? Should we, and must we, let go of work (and people) that don’t fit with our strategy?
It isn’t always about changing who you are, but really knowing who you are. In the business world, filled with buzz words I can’t believe I’ve started using, unique selling proposition is the term. What do we offer that is so unique that no other competitor can claim? And can you say it in a sentence? Say it without reading from a piece of paper or a screen.
As we all channel our inner adolescence and discover who we really are and really want to be, let’s take some advice from our adult selves and embrace what’s in the mirror, be true to it.
Gina manages The American Lawyer editorial team while managing and developing the brand innovation strategy. Gina joined ALM in 2005, where for more than 10 year she covered the business of law for ALM’s Pennsylvania publication, The Legal Intelligencer, focusing on the trends and issues impacting the largest law firms in the state and beyond. In June 2016, she moved into the role of Senior Editor, Business of Law in ALM’s Global Newsroom. In this role, Gina wrote and co-led a team of highly skilled journalists from around the country who report on and analyze how the world’s law firms operate and compete. Gina has won several awards for her reporting, including a Jesse H. Neal award for a series on the changing business models of law firm’s post-recession and two Emmy awards for her work doing feature reports with the American Law Journal. Before joining ALM, she earned her master’s degree in broadcast journalism and public policy from American University in Washington, D.C.