Friday, March 22, 2013

You Know Your Firm’s in Serious Trouble When …


The only reason for a law firm to invest in competitive intelligence is to help its decision makers prepare to benefit from (or avoid the dangers in) near- and long-term opportunities and threats. Therefore, among their other duties, CI professionals and their clients must track leading, lagging and coincident indicators that identify specific opportunities and threats and that forecast their timing.

Yes, the US economy is recovering from the Great Recession. But like all downturns, it stressed our industry. Some firms, more vulnerable than others, were tested hard. Happily, some of those firms’ leaders took major corrective actions, and their firms are emerging stronger than before. But some firms will not recover.

Below are 20 indicators that your firm—or a competitor firm—probably won’t make it, at least not in its current incarnation. I thank my esteemed colleagues (you know who you are) for suggesting some of these indicators. 

Twenty ways to know your firm’s in serious trouble …

1.    You dread coming to work.

2.    Partners’ doors are closed all the time.

3.    The coffee’s gotten worse.

4.    Firm revenue and headcount have shrunk, and net operating income has fallen even more.

5.    Profits per equity partner are shrinking or flat, kept aloft by partner de-equitizations.

6.    The only thing growing at your firm is the number of non-equity partners.

7.    Women at your firm are third-class citizens, not firm leaders or full equity partners.

8.    You don’t recruit government officials without business because you can’t afford to invest in them.

9.    There’s a big donut hole in your firm’s partnership, where future leaders used to be.

10. All the firm’s largest client relationships are controlled (“tattooed”) by the firm’s oldest partners.

11. Clients are viewed primarily as revenue sources, not objects of real affection and service.

12. Partners won't delegate work to other lawyers until they make their own production numbers.

13. Equity partner compensation is decided by a few partners, black-box style.

14. Your firm has downsized marketing and eliminated the CMO position.

15. You’re still using MS Office 2003.

16. You haven’t had a real firm retreat in years.

17. Your firm has recently been sued for malpractice, discrimination and/or sexual harassment.

18. Clients have started to ask you about the firm’s health.

19. You’re open to a combination, but “worthy” firms’ leaders won’t take a meet and greet.

20. You’ve finally started to say the M-word, assuring reporters your firm is not interested in a merger.

What other leading, lagging or coincident indicators do you think identify a law firm that’s in imminent danger of failing? 

16 comments:

Ann Lee Gibson said...

Leigh Dance has riffed on this post at her own blog ... at http://www.eldinternational.com/2013/03/24/from-ann-lee-gibson-recognize-signs-that-your-law-firm-could-be-in-big-trouble/. Thanks, Leigh!

Joe Altonji, LawVision Group said...

Great post Ann! This is a topic near and dear to my heart these days. A huge number of firms remain on the edge - and many of those are reluctant to face the facts as they are.

George Clerk said...

Very good website. I liked it very much.

Tenders Online & Tenders Online

jowdjbrown said...

Happily, some of those firms’ leaders took major corrective actions, and their firms are emerging stronger than before. But some firms will not recover. waunakee wisconsin lawyer

Andrew Greenwood said...

Excellent blog. I loved the item completely.

Bedrijven Te Koop & Inkopen in Bedrijf

Jack White said...
This comment has been removed by the author.
Jack White said...

I completely agree with your list that you gave. Shockingly accurate about the coffee as well too. I have noticed this trait in past firms that i have worked at. Now they are either gone are just doing really badly. http://www.vanblk.com/Offices/Norfolk

Mike Joynes said...

Hahah... the coffee has turned bad, was great! Nobody can function on bad coffee. And who wouldn't want a staff retreat! A fun work environment creates the best output. Personal Injury Nofolk. http://joyneslaw.com/personal-injury-lawyer-norfolk-va/)

Joseph Russo said...

Extraordinary post! This is a theme important to me nowadays. Countless stay on the edge - and huge numbers of those are hesitant to face the certainties as they may be.
kirkland law firm

Deborah Richards said...
This comment has been removed by the author.
Deborah Richards said...

I was surfing the Internet for information and came across your blog. I am impressed by the information you have on this blog. It shows how well you understand this subject. dui attorney

historypak said...

Love what you're doing here guys, keep it up!.. Bair hugger infection

Adiba Alam said...

When you have a legal advisor for battling your case, then you don't need to pay the substantial sum as fines to the movement police and to some expand you won't not get the need to pay fines on the grounds that your legal counselor is very savvy in taking care of such cases http://legacylawoffl.com/

Raheel Ali said...

I chose them because even though it is an expensive procedure, their prices were competetive, (in most cases cheaper), and their credentials and ratings were not only good, but most importantly - believable.. http://www.premiumtaxresolutions.com/

Sarah Jacb said...

It is a barrister that you want if you need to address a question of law that required greater expertise. Personal injury lawyer

Muneer Ahmed said...

Such legal advisors have a tendency to be very superb and are among the most well known and effective ones. lawyers

ShareThis