Posted In: Assessments, Business Development, Culture & Diversity, Practice Group Management, Strategic Planning
Leading Through Market Disruption: Why Follow the Leader Is a Game of the Past
Imitation may be the greatest form of flattery, but it is one of the worst approaches to establishing market leadership in today’s rapidly changing legal world. For decades, partners presented with new business ideas have posed the question: “Which law firms are doing this already?” This de facto response to new business ideas kept law firms far behind other professions in their adoption of new technologies, deployment of marketing and business development and many other now common business practices.
In a market with often double-digit growth and ample client demand, this slow-paced game of follow the leader typically worked just fine. First-mover advantage, for the most part, was limited and short-lived (in part because adoption was typically slow and sporadic, even at market-leading firms). But (hats off to Mr. Dylan), times, they are a changin’.
In today’s world of fierce competition, a “me too” philosophy will saddle a firm with snail-like growth at best. In a near-flat market, client dollars are flowing to the new, different and innovative. The fastest-growing legal service providers in the world are in some instances not even law firms at all. In the face of market disruption, what can traditional law firms do to shed old habits?
- Acceptance – Letting go of the past can be hard, but the faster attorneys and leaders acknowledge and accept changing market dynamics the stronger the chances of success.
- Schedule a fact-based presentation on market trends and competitive landscape
- Subscribe to law practice management newsletters
- Attend law firm leadership roundtables and forums
- Embrace change– Moving mountains may seem an easier task than achieving behavioral and cultural change in a professional organization. Motivate shifts in thinking by:
- Providing direct feedback from clients
- Presenting factual evidence and case studies of what’s working
- Giving credit and celebrating those using new practices to win clients
- Be transparent– Today’s savvy, sophisticated clients want a better understanding of the “man behind the curtain.”
- Present clients with a matter plan including staffing and timeline
- Inform internal team members of client budget concerns or sensitivities
- Invite clients to participate in team meetings
- Offer to review invoices in draft form
- Think different– Instead of the “next in line” mentality, seek to generate an ongoing dialogue about how your firm is unique; not what you do better, but what you do that others don’t. Don’t be surprised if initially you’re met with blank stares. Note,
- Specific distinctions trump blanket statements (e.g., an in-house expert with a technical background in pipeline construction wins over “an award-winning Energy practice” in a bid for transactional work)
- Actions speak louder than words (i.e., saying your firm is the most responsive lacks authority when a competitor proposes a solution more quickly)
- Let clients tell you how you’re different – if you haven’t asked yet, now’s the time
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Thank you for a good article. We are waiting for disruptin also in the Norwegian Market, but it looks like it the old Normal will last for a while. It has lately seemed like articles and news on the topic has diminished. This makes firms and partners here feel like the whole New Normal thing was just a hype that is about to pass and things will go back to normal. As a response to this, one of the passages in this blog interested me:
“… client dollars are flowing to the new, different and innovative. The fastest-growing legal service providers in the world are in some instances not even law firms at all.”
So I am wondering, who are these innovative law firms and non-law-firms that grow so fast and to what extent do they actually represent a threat to the high-end market? Are there examples of high-end firms struggling, or even firms going bankrupt because of new competitors taking over?
Knut-Magnar,
Thank you for your thoughtful response.
Good for you in the Norwegian market to not be experiencing as many pressures. Yet should global trends cross your borders, it is savvy to be thinking ahead and using the opportunity to become a market leader. A brave move – and one which can be highly rewarding in the long run.
It is somewhat discouraging to see when hype dies down about major change it is easy for firms to become complacent. Sadly, it is this complacency which ultimately leads to the demise of some of the biggest law firm brands.
Over the past ten years, many mega-size firms have given up market share to mid-size firms, alternative legal providers and even technology. Fully 9 of the 10 major law firm dissolutions in the past 10 years were not increasing revenue as fast as dollars were flowing into the market (i.e., they were losing market share).
Corporate counsel at the Fortune 1000 have shifted a considerable amount of work in-house, from routine SEC filings to small-cap transactions. LexisNexis Counsel-Link’s newest report (http://tinyurl.com/counsel-link-report) documents the transfer of large swaths of work to mid-size firms – as well as the potential for continued movement. And innovative firms such as Polsinelli, Bartlit Beck and Seyfarth Shaw are making waves with their proactive approaches to clients.
And lest we forget, new entrants such as Axiom, Riverview Law, Valorem, IPNav and others are tackling a range of client work – and not just at the most basic level. Strategic advisory work may come from a law firm, from an offshoot such as McGuireWoods Consulting or Manatt Health Solutions or from a Big 4 consulting group. The competitive pool is expanding – and sadly law firms who are standing still are likely to get trampled in the stampede.
Excellent advice. Law firm management often can see the long term benefit from pursuing a new direction, but convincing a significant contributor(s) to subordinate a model that has served him (them) well in the past can be a challenge. Convincing the doubters that the short term pain is in their long term interests is not only the mark of great management, but also the result of a great plan.