April 07, 2004
Law Firms Embracing Strategic Planning
Here's a good article from the Boston Business Journal which illustrates how law firms are evolving and embracing strategic market planning. As one might guess, in the legal market this is a slow but steady process. I particularly liked Hale and Dorr's attempts to convey that their litigation and business practices are well-integrated. Integration is a key concept. Clients love seamless delivery of services -- it makes them feel comfortable that they're in good hands.
Along this reasoning, the article cites, "[i]n another reorganization, a strategic shift from a geography-based management structure to running each practice group as an integrated national team prompted Holland & Knight LLP to develop strategic marketing plans for each practice group last year." This is a major trend I've been seeing in larger firms who have numerous widespread locations. Think about it: In a developing global economy, large corporate clients (the bread and butter of most large firms) have global issues, so they need a global legal team to handle them. I've also seen a trend whereby in-house lawyers don't want to track hundreds of outside firms -- it just takes too much time. However, with that said, smaller firms do have corporate opportunities in niches.
Another key concept expressed, one that may not sit well with all partners, is that "firms must also dole out money disproportionately to optimize results." "Developing a specialty magazine for a specific practice group, such as Hale and Dorr's IP Business, is one example of such a choice." This can be a difficult concept for many law firms who are organized as partnerships, which can psychologically infer an equal share.
Several years ago, I had an interesting conversation with a local law firm executive director. He explained that one of the virtues of adopting a corporate organization over a partnership was the concept of "retained earnings". That is, taking some of the profits and reinvesting it in the business, as opposed to slicing up and distributing all the pieces of the pie each year. This is perhaps the real gist of the article, as law firms are slowly adopting business practices that have been prevalent in other markets for some time. Glad to see it, although I firmly believe the past several years of rough economic conditions, combined with the globalization of our economy, has definitely forced firms to adopt these practices out of sheer necessity. As it's been said before, during good times it's easier to hide a bad bottom line.
Topic(s): Law Practice Management
Posted by Jeff Beard