Why is Law Firm Strategy So Hard?

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By Mike White | Feb 1, 2022

The title of this article poses an obvious question with which many forward-looking, high-performing firms wrestle. In their native state, law firms are not inclined to “manage,” and to the extent leadership mobilizes firms around shared priorities they tend to be at best only the “here and now” priorities. Law firms are not good at seeing around corners. There’s been no need to as law firms have operated in a pretty static market – it’s only been recently that the legal market could be described as fluid and dynamic.

So what is happening now? The artistry of law is being fused with the science of business processes and technology. Unlike many “real businesses,” law is still primarily a bespoke art. Law firms themselves can’t adopt all of the great process and technology advances with which businesses have lived for some time; in short, law firms will have to pick their spots.

How can law firms pick the right spots? How can they transform their business model and service delivery in intelligent ways without getting out over their skis? What can law firms do to get a better handle on the changes in their market they themselves are not going to see in the normal course? Below are a few recommendations that may help firms wrestling with these issues.

  • Build relationships with strategy consultants who build new capabilities in response to new corporate needs all the time. These new capabilities by definition represent strategic issues for the large corporate clients of these strategy consulting firms. New strategy offerings usually spin off all sorts of structuring, regulatory, and risk management issues tailor-made for law firms.
  • Build relationships with Wall Street capital markets firms that research industry sectors. The trends about which you learn from these particular industry experts will spin off industry-driven new legal demand.
  • Understand legal operations twice as well as do your clients. Learn from your clients how they think the management and delivery of legal work are going to change in five years, not just next year.
  • Follow the most innovative IT consulting firms that focus on the legal industry and serve only the AmLaw 100. Technology is usually an exemplar of non-technological innovation that occurs at a process, operational and “manual” (i.e., non-technological) level.
  • Survey the associates. Associates are very invested in informal benchmarking. Based on their anecdotally informed perceptions they will have a view on the strategic priorities you embrace. If you take the time to understand what the associates are “hearing” from their peers at other firms you’ll likely stumble upon at least one multi-year priority that- left to your own devices- would not have made your list.
  • Driving adoption and establishing new behaviors in support of any long-term strategic initiative are strategic in and of themselves. “Get a body on” creating buy-in, thereby sensitizing your lawyers to the worthwhile nature of the discomfort they may be required to take on. For example, if you’re going to ask lawyers to use new client facing technology in the delivery of legal work, give them billable hour credit for the hours they may save by using the technology.
  • Predictive analytics should be deployed wherever relevant. Clients are true believers of data sciences and they will love seeing their law firm relying on it to project matter costs, or business risks associated with certain decisions. Develop a capability in this area and you will have a leg up on your competition.

Transforming the strategy, operating model and service delivery features of a law firm is a daunting ambition. Firms can make some transformational advances without taking on too much if they keep the above ideas in mind and pick the right spots; in so doing, process and technology can work hand-in-hand with the bespoke art of law to create a better product.

Mike White was a practicing attorney for seven years prior to founding and operating two enterprise software companies — Sirius Systems (sold 1997) and MarketingCentral (sold 2007). He owned and managed ClientQuest Consulting, LLC for 10 years serving law firms. He holds an AB in History from Duke University and a JD from Emory University School of Law.