At The Edge – Avoiding The Law Firm Fall

These two guys, Roger Hayse and Andy Jillson, are my clients. They each bring a unique perspective to the change being experienced in the legal industry, and specifically, to law firms facing transitional issues.

Prior to forming their law firm consultancy, Roger and Andy participated in building a strong regional firm; experiencing the near collapse of the same firm; helping engineer and lead the rebound of the firm into the ranks of the AMLAW top 60; and finally, experiencing the demise of the firm due to one fatal hiring mistake.

Roger and Andy bring unprecedented experience to a practice committed to helping other law firms avoid disaster when facing the high-consequence change of any transitional issue. 

I am honored to present this co-authored post:  

Some words simply lose impact over time.

Change is such a word. But the inadequacy of language does not lessen the disruptive nature of shifting cornerstones.

As described so well by Abe Krash, this is what we’re experiencing in the legal industry.

Headlines are full of stories about law firms losing lawyers. Noam Schreiber was brilliantly quoted in a recent Bloomberg piece by Megan McArdle:

“Stable” is not the way anyone would describe a legal career today. In the past decade, twelve major firms with more than 1,000 partners between them have collapsed entirely. The surviving lawyers live in fear of suffering a similar fate, driving them to ever-more humiliating lengths to edge out rivals for business…

We feel the turbulence. The talk of alternative models and a new normal does little to address the daily challenges faced by many law firm leaders.

In our experience with law firms, what is most helpful when turbulence looms is to be able to recognize the coming storm in time, and decisively, effectively respond.

Firms of all sizes, in all geographies are struggling to find balance, some are restructuring, others shoring up through mergers, and in some cases, shutting the doors. But today’s struggle with transition is nothing new.

Leading Through A Burgeoning Storm – A Case Study

From two different perspectives inside the same firm, one of us in management and one of us as a working lawyer, we experienced a law firm in crisis, saw it survive and stabilize, and ultimately grow from 50 lawyers in one office into an Am Law 100 firm with a nationwide reach.

It was the early 1980’s, and the firm had enjoyed over thirty years of financial and professional success. This stemmed largely from a dominant institutional client, C. W. Murchison Sr. , whose corporate, real estate and litigation work fueled the firm.

But with little forewarning, the institutional client collapsed. As if on cue to further compound the dilemma, the firm’s Texas based economy fell, as reflected in this timeline of the 80’s financial crisis.

With little time to prepare, the firm’s business base had disappeared. The search was on for a way to survive.

Three Keys To The Law Firm Successful Transition

Every decision bore significant consequence – for the firm, individual lawyers and non-legal staff. The idea of change took on real-life meaning. Yet, from the edge of abyss, we experienced a rise to a stature none of us imagined. Here are what we believe to be the keys to that successful transition.

1. Recognition. With the irreversible disappearance of the firm’s institutional client, coupled with recession, management concluded that reliance on our old business model was foolish. This enabled us to dare to innovate. Hindsight being 20/20, this seems an obvious conclusion; however, real-time change often obscures the ability to acknowledge even the obvious, and act decisively. Management’s swift problem recognition was vitally important, but so too was the speed with which it acted.

2. Leadership. Our firm was fortunate to have extraordinary leadership in the midst of this crisis. A visionary strategic plan created a new framework for growth –- organic, lateral and via merger – designed to diversify practice offerings and geographic reach. This executable strategy provided answers and direction; and though another plan might have been better, time was of the essence. Perfection had to yield to speed. Transparent and visionary leadership inspired confidence, presenting a plan that lawyers could rally around.

3. Communication. In the midst of change, as Eric Fletcher describes communication is life-blood. Translating vision and tactics is an on-going task. So, the firm’s leadership constantly touted the plan, articulated problems, acknowledged challenges, and welcomed input. Walking the halls, collaborative meetings, lunches, dinners – the nuts and bolts of communication provided the grease that made the transition gears move. Visible and transparent progress created a groundswell of support. Simultaneously, management was communicating to external audiences. Clients, strategic business leadership and the entire legal community heard of the firm’s new vision, the opportunity and the excitement that laterals and other firms would experience by joining.

Thanks to these three tenets, new clients, new colleagues and new offices arrived. Success bred continued growth and more success. And the firm became an enviable model.

That Was Then. What About Today’s Changes?

Some basics never change.

The keys to surviving turbulent market shifts are the same today as in our real-life case — recognition, leadership and communication. However, one reality has changed the equation.

Social media has turned the old model of who controls timing and content of a message on its ear.

For law firm leaders dealing with issues of transition, this change means the time to recognize an issue and develop a solution is drastically compressed. The slightest hint of crisis today can spread through your organization; become the trending topic in other firms, and the fodder for tomorrow’s blog headlines.

Brian Dalton in a recent Above the Law post describes why the astute leader must use the new media as a communication asset, implementing the use of blogs, micro-blogs and other social media tools as a critical part of any communication plan.(See the 8,000+ blogs of LXBN.) We believe strategic blogging will:

• Give “voice” to the firm’s proactive approach to transition, underscoring visionary leadership in the eyes of clients, other important business audiences and the legal marketplace.;
• Drive the tone and content of conversation around a firm’s transition, minimizing the impact of the rumor mill; and,
• Micro-blogging tools such as Twitter provide for real-time two-way communication with internal as well as external audiences.

Social media will be a part of the communication around any visible law firm transition. The only decision left to law firm leaders is the degree to which it will be used to the advantage of the transition plan.

Virtually every day in our work we see firms facing crisis. For some, the very existence of the firm hangs in the balance. And though the specifics may differ from case to case, transition is inevitable. The only question is how painful or successful might the impending transition be.

How is your firm adapting to change? What do you believe are the keys to a successful law firm transition?

Related Resources and Links

1. Leading and Managing Organizational Change and Transition by Bob Burgess — “From a leadership perspective one of your greatest challenges will be to successfully manage both organization change as well as organization transition. Leaders most often, focus on planning for the change itself (the shift in the external environment), without giving much thought to transitions (the psychological reorientation that people experience in response to the change).” 
2. This is Your Brain on Organizational Change by Walter McFarland, Harvard Business Review — “[L]et’s think about people differently — not as commodities to be hurried and pushed around but as sources of real and powerful competitive advantage. A second step is to see change differently — not just as a perpetual crisis, but as an opportunity to be better prepared and equipped to manage organizational shakeups as a normal part of doing business, and as an opportunity to personally develop and grow.”
3. Leading and Managing Change by Christopher G. Worley, Ph.D. and Yvonne H. Vick, MSOD — “Managing change well is a continuous and ongoing combination of art and science that assures alignment of an organization’s strategies, structures, and processes.”
4. Managing Law Firm Transition — This blog authored by Roger and Andy engages in an on-going conversation centered on aspects of the high consequence change faced by today’s law firms.
5. Law Firm Strategy, A Leader’s Guide to Optimizing Performance by Roger Hayse — “Are you and your firm now ready to change? … change is all around us, it’s accelerating, and the successful firm will be the one that anticipates change, creates it, and makes it work for them.”

Special thanks to Cordell Parvin and Eric Fletcher for referring Roger and Andy to me.