The field of law – particularly law firms and the ways in which they manage their practices – is rapidly evolving, more than most other industries at this time. From the disruption of artificial intelligence (AI) to a large cohort of well-established attorneys nearing retirement and everything in between, industry change is taking place faster than ever before. And, while in the midst of such a rapidly evolving era in the business of law, the healthiest of firms will thrive within their respective markets. So, the question all law firms should be asking themselves as they develop their strategic plans for the coming year is: What creates a healthy law firm? While there are countless components to building and maintaining a healthy firm, below are three key components every firm should consider before taking a deep dive into setting up their next few moves.
1. High-Performance Culture: The word “culture” is becoming increasingly popular in corporate arenas, but what does it really mean? Typically, when discussing “organizational culture,” teams are often referring to the informing source, and byproduct of, a group’s collective behavior, the mindset behind such behaviors, and the shared meaning behind such behaviors. In other words, they’re referring to what’s “normal” among a group. And, since it’s created by a group, all individuals are shareholders of their organizational culture. So, when it comes to fostering a healthy firm culture, it’s all about supporting favorable behaviors that not only support today’s targeted business results, but tomorrow’s vision as well. Three questions all firm leaders should ask themselves regarding their firm’s culture are:
(1) Are all team members clear on what truly matters (explicitly and implicitly) for our firm and our clients?
(2) Are we actively championing specific behaviors that create the culture we want, while actively addressing the behaviors that don’t?
(3) With regard to our recruitment strategy, onboarding process, performance management, incentive programs, and all other people-related components of our firm, are all features designed to support targeted behaviors that drive our business forward?
2. Strong Competitiveness: While most firms tend to have very collegial relationships with other players in their respective markets, at the end of the day, they’re competing for the same “share of wallet” among targeted client bases and talent populations. As fast-paced as today’s professionals run, with countless bits of information hitting their eyes each day, between endless emails, phone calls, social media posts, networking engagements, and ongoing conversations, every interaction is an opportunity to demonstrate clear value. So, when it comes to driving a strong sense of competitiveness, it’s all about ensuring the firm’s value (or “x-factor”) is attractive, obvious, and evident in every interaction (whether casual and unplanned or formal and planned). Three questions all firm leaders should ask themselves regarding their firm’s competitiveness are:
(1) What real problem do we really solve for our clients that our competitors don’t?
(2) Why should our clients truly care about what we’re doing differently? How does it make their lives better?
(3) With regard to our branding, community relations, legal service models, cross-practice collaboration, practice integration process, and all other factors that reveal our place in the market, is our true market position grounded and obvious to the audiences we aim to attract?
3. Reliable Scalability: While most firms focus on accounting for organizational agility, in order to meet the demands of today (which is important), they must also account for organizational scalability to meet the demands of tomorrow because today never lasts and tomorrow always comes faster than expected. When referring to organizational scalability, what firms are typically focusing on is their ability to support growth (in size, client count, revenue, etc.) without breaking or compromising the quality of their service. So, when it comes to creating a truly scalable firm, it’s all about building innovative firm features with the intent to support future needs. Three questions all firm leaders should ask themselves regarding their firm’s scalability are:
(1) What specific hurdles do we expect to encounter at our next phase of development?
(2) Do we have a strategic “road map” that clearly outlines the development of our firm’s organizational model at the next levels of projected growth?
(3) With regard to practice succession, revenue margins, risk, tech, systems configuration, operational sustainability, internal controls, and all other features that make up our firm’s operating model, are we structured to support 50% growth if it were to happen today?
All market indicators suggest that the fast-paced rate of change in the field of law will continue for the foreseeable future. For this reason, the healthy (and successful) law firms of yesterday may very well look, act, and think differently than the healthy law firms of tomorrow. And, while the future’s top law firms will each have their own unique philosophies and strategies, they will all possess a high-performance culture, a strong sense of competitiveness, and a reliable model built for scalability— all of which will be determined by their leadership. So, as it pertains to the firm leaders, who are truly dedicated to becoming top players within the industry, it is highly encouraged that they finalize their 1, 3, and 5-year strategic plans with specific action items intended to grow the culture of their talent, the competitiveness of their market position, and the scalability of their operating model.