The New Law Firm: Ditch Old Traditions to Grow a Business
In the time of the "start up" business, where young people fresh out of college get some venture capital and make a bajillion dollars, the law firm seems like a vestige of an older time -- a time when we were genteel professionals writing on parchment with quill pens.
Structurally, that's the way it is, too: the vanguards of the legal profession still like to pretend law firms are a separate, distinct, elite category of business-but-not-business entity. Really, though, the law firm is a business -- and it needs to act like one to survive. All the worn leather briefcases and elegant constitutional references the world won't pay the bills.
The Stanford University Graduate School of Business will launch a five-week online course, starting September 15, on "growing your business." Could law firms learn something from this course?
Yes, to the Extent Allowed by Law
The course seems geared to get managers to think like Robert Sutton, one of the faculty members in charge of the course. Lawyers are trained to think like lawyers, not like business people. Sutton is a proponent of "evidence-based management," which Sutton and a colleague described in a Harvard Business Review article as "identifying, disseminating, and, most importantly, applying research that is soundly conducted and clinically relevant." Most importantly, evidence-based management requires ignoring certain kinds of evidence, including "obsolete knowledge gained in school, long-standing but never proven traditions, [and] patterns gleaned from experience."
The legal profession -- excuse me, business -- is steeped in tradition, often to its detriment. Take the BigLaw firm itself, which places dozens of practice areas under one roof. Supporting all of these different silos costs money -- money that clients sometimes don't want to pay if they can get it cheaper from the boutique firm next door, which charges half as much and has one-quarter the number of partners.
Undoubtedly, this is one way to "grow" business at a law firm: horizontally, not vertically. Rather than trying to be the best at everything (which means either that you'll be mediocre at everything or you'll be really good at most things but charge a lot of money for it), perhaps law firm growth should be predicated on getting more clients in a practice area or expanding a practice area intelligently and logically.
Collaboration, Not Competition
The old "Cravath" model of operating a law firm is over one hundred years old. It focuses on competition among associates for partner jobs and competition among partners for business. Increasingly, though, competition isn't what it's cracked up to be. Internal competition is bad for life in the office, but it can also bad for clients. Why is the client paying for an office full of lawyers "[w]hen partners are usually acting like a collection of sole practitioners sharing office space and a receptionist"? Again, the boutique firm -- which can change course quickly like a yacht, not slowly like a cruise liner -- focuses on collaboration, which ultimately increases client service, says Kenneth Carroll, attorney with the boutique practice Morningstar Law Group.
It's tempting to imagine growing your business as just doing more of what you've been doing before. But with the upheaval of the law industry in the last ten years, survival is going to require abandoning at least some of those long-held "traditions" that have been stifling innovation. Think light on your feet: Float like a butterfly, sting like a bee.
- How to Run a Law Firm Like a Startup (Business Insider)
- Law Firms are Businesses Too And Why the Model Ethics Rules Need a Reality Check (mySanAntonio.com)
- 3 Reasons to Take Business Risks in Your Legal Practice (FindLaw's Strategist)
- Business Plan 101: Why You Need One, What's In It (FindLaw's Strategist)
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