Nibbling Around the Edges
When children are given food they don’t like and are told, “Eat it, it’s good for you,” they have this special way of nibbling small amounts of it and making it look like they are actually eating.
When law firms go about creating and implementing strategy they often use the same technique. They nibble around the edges in the hope that they can make their partners (and their competitors) think they are actually doing something. People outside the private practice of law might be surprised by this. They see lawyers as being intensely competitive and goal driven. This may be true in the way they represent their clients but when it comes to managing their firms, lawyers can become incredibly timid. We find law firms – even extremely successful firms – making decisions designed not to win but to avoid losing. The truth is (and this is true for law firms, giant corporations and individual attorneys in pursuing their practices within a firm) success requires that you play to win, not nibble around the edges.
What does playing to win mean? In consulting with law firms I have had the privilege of working with firms that are playing to win as well as those who are not. I enjoy and have respect for the firms equally, but there are distinct differences between them which is most evident when they go about creating and implementing strategy. In fact, there seem to be three characteristics that define firms playing to win.
Focus on Competitive Strengths
Winners relentlessly capitalize on their strengths and build on them. As part of a strategic planning process, many firms perform a S.W.O.T. analysis (strengths – weaknesses – opportunities – threats) and devote most of their activity attempting to correct their weaknesses. Firms that are playing to win will all but ignore their weaknesses and make building on their strengths the basis for their strategy.
Consider the following situation. Your law firm has the largest bankruptcy practice in a city. A couple of competing firms have growing practices and one has almost as many lawyers as your firm. However, your firm has a relatively weak litigation practice compared to many of your competitors, some of which are known as litigation firms. Should your firm focus its marketing and lateral recruitment efforts on bankruptcy or litigation? Conventional wisdom in most firms would cause them to place their emphasis on adding litigators. But a firm that is playing to win would aggressively build its bankruptcy practice and all but ignore litigation. Although counter-intuitive, the reason is simple. By building on an existing strength the firm can create and build on a competitive advantage that strongly differentiates it and is virtually unassailable by competitors. The weak litigation practice is probably far enough behind the competition that regardless of how much the firm invests in its growth, it will never catch up.
Capitalizing on Areas of Dominance
Law firms that are playing to win understand that a competitive strength can be fleeting, especially in legal markets where attorneys can fluidly move from firm to firm. To move from a competitive strength to a position of dominance, a firm that is playing to win must unleash overwhelming force in positioning itself as the dominant player in the market. For example, a firm with a competitive strength in healthcare used its critical mass of lawyers to conduct a constant barrage of seminars on every conceivable topic, publish incessantly so that some piece of their material lands on every client or potential client’s desk every week and spent enough on public relations to have their name or advertisement in every issue of every appropriate trade journal. Competitors, regardless of their actual level of strength looked like weak sisters and some early attempts to create competing programs made them look like copy cats. In the space of half a year, the firm went from being one of several firms with a strong healthcare practice, to the dominant healthcare firm in the region in the eyes of both clients and competitors.
Once dominance is established in the minds of general counsels and other buyers of legal services, it is difficult to lose. It must be the better part of 15 years since Howrey’s “Every Court Every Day” advertising campaign in the Wall Street Journal unrelentingly used their size and focus to create a position of dominance that competitors could not begin to approach. But those ads are in the back of the mind of every general counsel over the age of 45.
Attack Competitors’ Weaknesses
Winners rarely attack, or attempt to compete with, competitors head on by pitting strength against strength. Instead, it makes much more sense for a firm to find weaknesses in a competitor and create strategies to attack that weakness. When a large appliance manufacturer staged a beauty contest to consolidate its regional product counsel, a mid-sized litigation boutique firm wanted to compete for the work against the firms that had traditionally done the company’s work. Its competitors were very large general practice firms and, even though the firms stacked up evenly in terms of the quality of their lawyers, the boutique firm believed the large firms were terribly inefficient in their staffing and handling of cases. They entered into a strategic alliance with a bill auditing firm and a member of that firm participated with the boutique’s lawyers as part of the presentation team. The message was, “We will have the bills audited at our expense before they are even sent to you.” The tactic not only enhanced their competitive advantage but attacked the competitors as being too expensive without actually saying it.
Of the firms that are playing to win, I particularly respect firms that have gone out of their way to define what constitutes unethical and culturally unacceptable behavior. One of the enduring lessons from the demise of Arthur Anderson in the Enron scandal is that being aggressive and playing to win can easily slide into a “do anything to win” culture. The real winners don’t value individual efforts over collective institutional strength and draw very clear explicit guidelines for what constitutes appropriate competitiveness. Several of the most aggressive law firms in the U.S. have extraordinarily specific firm codes of professional responsibility that amplify their State Codes.
But, for many firms, playing to win is too aggressive. They would argue that their conservative values have served them well in the past. Indeed they may be correct and these firms may continue to prosper by doing precisely what they have (or perhaps more precisely, haven’t) done in the past. But to the extent that firms worry about strategy in a more competitive and consolidated world, nibbling around the edges doesn’t make a lot of sense.