Name: Emily C. Rushing
Title: Competitive Intelligence Specialist
Firm: Haynes and Boone, LLP
Since: September 2008
Profiles: You can find Emily at LinkedIn and Twitter.
Q: What is your job description at Haynes and Boone?
A: My role is primarily focused on developing and reporting strategic business and competitive intelligence. I support the Business Development and Marketing Departments, the CMO, the firm’s attorneys, and, most importantly, firm management.
Q: Who are your typical CI clients at Haynes and Boone?
A: My clients range from associates to the Managing Partner to marketing staff. My primary clients are the Business Development Managers who coordinate with me on behalf of their respective practice groups.
Q: What are three common KITs you’re often asked to address?
A: Topics for our intelligence frequently include: 1) profiling competitors’ practice areas and clients, 2) identifying business development opportunities for the firm among existing clients and developing strategic targeting programs, and 3) developing intelligence in preparation for business development meetings with existing or potential clients.
Q: How is the intelligence function organized at your firm? To whom do you report?
A: I am the firm’s only CI professional. I am directly supervised by the Director of Business Development, indirectly supervised by the CMO, and my role is situated within the Marketing department.
Q: What experience or training prepared you most for the CI work you do now at Haynes and Boone?
A: My years as a research specialist with King & Spalding were good training for the CI work I do for my current firm. I also developed technical skills with various softwares during my time working as a consultant and freelance technical librarian.
Q: What formal CI training have you had?
A: Very little CI-specific training. I studied social sciences and statistics in college and went on to achieve a Juris Doctorate and Master’s of Library and Information Sciences. These are highly analytical areas of study, and I feel that the training I received in those programs were wonderful preparation for my career in CI.
Q: Where do you go for ongoing CI training and mentoring?
A: Since accepting this position, I have attended webinars and tried to expose myself to the basic literature. I also have been mentored by colleagues via professional organizations like SCIP and SLA’s CI division, for which I am very grateful. From librarian to CI professional isn’t as jarring a transition as lawyer to librarian, but has required some adaptation.
Q: What specific adaptations have you found necessary in your transition from librarian to CI professional?
A: The most helpful adaptation I have made has been to change my patron/client focus from transaction-oriented (retrieve article, locate book on shelf, instruct on research techniques, build bibliography, perform catalog search) to results-oriented (find and understand the client, prepare for the meeting, get the business, maximize the relationship). My new, CI perspective looks less at the question "What is the patron asking me to give them?" or even "What do we need to know?" than it looks to the question "What should we do and how can intelligence help us make a better decision?" Once I really understood my present role in terms of the latter phrase, rather than either of the first two phrases, CI made sense to me and I was able to more smoothly transition from a research practice to an intelligence practice.
Q: What do law firms most often misunderstand about CI? What should they know about CI that you’re afraid is often misunderstood?
A: There is some misunderstanding about the process of developing KITs and CI. It is a two-way street, and a successful CI program requires that management and decision-makers share information with the CI professional. For CI to simply generate a report on a set of data or research into a particular topic is not a successful use of CI. CI must be actionable and must help inform management’s decisions, but that requires that management perceive CI as an integral part of the decision-making process.
Wednesday, April 22, 2009
Monday, April 20, 2009
Law Firm Economic Cycles Part IV
Here’s my fourth and final post in a series offering findings from analyses I performed last fall as my law firm clients were considering how best to respond to the economic downturn. Seven months later, some of my findings from last fall look like a big duh, although others still offer useful insights. (For more details and caveats about this series, read the past three posts at this blog.)
1. Many firms will return to a single equity partnership tier.
In the nineties, law firms created non-equity partnership tiers as a tactic to elevate their profits-per-partner performances. The number of non-equity partners in law firms grew in the 2000s, those ranks filled by reliable technicians who did good work and supplemented labor gaps unmet by the associate talent wars.
As a result, many firms now have expensive, middle-aged legal work forces with reduced appetite and aptitude to become equity partners. These non-equity partners supervise associates, a useful function, but one that has an unintended consequence of blocking mentoring of associates by partners who are business owners, a distinction I think is important. It’s interesting that law firm associates’ widespread and vocal dissatisfaction with their professional lot coincides with their greater insulation from equity partner mentoring.
Although few firms have yet announced taken they will action to eliminate completely their multiple partnership tiers, I have long heard firm leaders talk about their desires to return to a smaller, single equity partnership structure for a variety of reasons. Therefore, I view some of the late 2008 and early 2009 partner downsizings as not only housecleaning and paring of practices, by efforts to reduce these non-equity partnership tiers.
2. Legal marketing and business development functions will continue to evolve.
During the recession of 1990-91 and through the nineties, law firms began to engage marketers and marketing methods from other industries. This first wave of professional legal marketers focused on basic marketing services—promotional events, marketing communications, public relations, and branding. Marketing services have expanded over the years to include sales and sales support, decentralized marketing support for practice and industry groups, market research, in-house client feedback programs, and key client programs.
I predict that in the current downturn law firm marketing will undergo a second renaissance. Marketing contributions that were valued 15-20 years ago probably will not make a big difference this time around.
Going forward, competitive firms will double down with even more professional sales support and coaching, key account management, and much more sophisticated competitive intelligence functions. These skill sets will help firms to acquire, expand, and defend their best client relationships. These functions will also help firms add badly needed rigor to their business planning function. Strategy, long pooh-poohed by most firm leaders, is finally seen to be important at both practice group and firm-wide levels. During this global recession and the new-world recovery to follow, law firms now need the early-mover and better execution advantages these functions offer.
And with print journalism on its last legs, law firms’ traditional PR programs will have no choice but to embrace Web 2.0 tools and activities to support the firm’s and individual lawyers’ institutional and personal brands through digital promotion and virtual word of mouth.
Conclusion: Recessions Offer a Chance to Step Forward
Recessions offer opportunities for a law firm to emerge stronger than its competitors. Certainly, a law firm is obliged to do whatever it must to survive in the short term. But the greater challenge for law firm leaders and their advisors is to find and take those positions (invest in resources) that will take advantage of changes wrought by the recession and the eventual recovery. Firms that will be stronger after this recession are those that find and tap new opportunities at the intersection of otherwise disconnected areas of expertise, where change is happening that they can exploit. (USC business school professor Dick Rumelt describes this approach to successful strategy in an excellent McKinsey Quarterly interview.)
The changes this recession introduces to law firms are nearly limitless—energy and environmental changes, client industry changes, political changes, legislative and regulatory changes, dramatic changes in communications and news channels, as well as changes in the legal talent pool, law firm structures, fee arrangements, business processes, and legal technology.
Lessons from the 1990-91 recession tell us that fifteen to twenty years from now, at least a fifth of today’s “leading law firms” will no longer be around, having dissolved or been acquired by stronger firms. Many others will have fallen one or more quartiles in the rankings that matter most—firm revenue, revenue per lawyer, and profits per equity partner. But still others will have ascended dramatically, having done what firms like Latham, Orrick, Dechert, Goodwin Procter, and Quinn Emanuel did in the last fifteen years—finding and tapping new opportunities at the intersection of otherwise disconnected areas of expertise, where change is happening that they can exploit.
1. Many firms will return to a single equity partnership tier.
In the nineties, law firms created non-equity partnership tiers as a tactic to elevate their profits-per-partner performances. The number of non-equity partners in law firms grew in the 2000s, those ranks filled by reliable technicians who did good work and supplemented labor gaps unmet by the associate talent wars.
As a result, many firms now have expensive, middle-aged legal work forces with reduced appetite and aptitude to become equity partners. These non-equity partners supervise associates, a useful function, but one that has an unintended consequence of blocking mentoring of associates by partners who are business owners, a distinction I think is important. It’s interesting that law firm associates’ widespread and vocal dissatisfaction with their professional lot coincides with their greater insulation from equity partner mentoring.
Although few firms have yet announced taken they will action to eliminate completely their multiple partnership tiers, I have long heard firm leaders talk about their desires to return to a smaller, single equity partnership structure for a variety of reasons. Therefore, I view some of the late 2008 and early 2009 partner downsizings as not only housecleaning and paring of practices, by efforts to reduce these non-equity partnership tiers.
2. Legal marketing and business development functions will continue to evolve.
During the recession of 1990-91 and through the nineties, law firms began to engage marketers and marketing methods from other industries. This first wave of professional legal marketers focused on basic marketing services—promotional events, marketing communications, public relations, and branding. Marketing services have expanded over the years to include sales and sales support, decentralized marketing support for practice and industry groups, market research, in-house client feedback programs, and key client programs.
I predict that in the current downturn law firm marketing will undergo a second renaissance. Marketing contributions that were valued 15-20 years ago probably will not make a big difference this time around.
Going forward, competitive firms will double down with even more professional sales support and coaching, key account management, and much more sophisticated competitive intelligence functions. These skill sets will help firms to acquire, expand, and defend their best client relationships. These functions will also help firms add badly needed rigor to their business planning function. Strategy, long pooh-poohed by most firm leaders, is finally seen to be important at both practice group and firm-wide levels. During this global recession and the new-world recovery to follow, law firms now need the early-mover and better execution advantages these functions offer.
And with print journalism on its last legs, law firms’ traditional PR programs will have no choice but to embrace Web 2.0 tools and activities to support the firm’s and individual lawyers’ institutional and personal brands through digital promotion and virtual word of mouth.
Conclusion: Recessions Offer a Chance to Step Forward
Recessions offer opportunities for a law firm to emerge stronger than its competitors. Certainly, a law firm is obliged to do whatever it must to survive in the short term. But the greater challenge for law firm leaders and their advisors is to find and take those positions (invest in resources) that will take advantage of changes wrought by the recession and the eventual recovery. Firms that will be stronger after this recession are those that find and tap new opportunities at the intersection of otherwise disconnected areas of expertise, where change is happening that they can exploit. (USC business school professor Dick Rumelt describes this approach to successful strategy in an excellent McKinsey Quarterly interview.)
The changes this recession introduces to law firms are nearly limitless—energy and environmental changes, client industry changes, political changes, legislative and regulatory changes, dramatic changes in communications and news channels, as well as changes in the legal talent pool, law firm structures, fee arrangements, business processes, and legal technology.
Lessons from the 1990-91 recession tell us that fifteen to twenty years from now, at least a fifth of today’s “leading law firms” will no longer be around, having dissolved or been acquired by stronger firms. Many others will have fallen one or more quartiles in the rankings that matter most—firm revenue, revenue per lawyer, and profits per equity partner. But still others will have ascended dramatically, having done what firms like Latham, Orrick, Dechert, Goodwin Procter, and Quinn Emanuel did in the last fifteen years—finding and tapping new opportunities at the intersection of otherwise disconnected areas of expertise, where change is happening that they can exploit.
Thursday, April 16, 2009
Law Firm Economic Cycles -- Part III
This is my third post in a four-part series that offers findings from analyses I performed last fall as my law firm clients were considering how best to respond to the economic downturn. Seven months later, some of my findings from last fall look like a big duh, although others still offer useful insights. (For more details and caveats about this series, read the past two days’ posts.)
5. In this recession, many law firms will be dissolved or acquired by stronger firms.
I maintain a list of “weakest link” law firms—those that are nearing or have passed a tipping point in terms of falling lawyer headcount and net operating income (these two metrics seem to be as good or better indicators of potential law firm dissolution or fire-sale acquisition compared to more arcane metrics). Right now, my weakest links list contains the names of nearly a dozen US law firms among the Am Law 200, the dissolution or acquisition of which would improve the health of competing firms, in some cases dramatically.
As with earlier recessions, this one will drive some law firms to failure and weaken other firms that will fail after the recession ends. US regional markets that are particularly stressed include Atlanta, Boston, Ohio, and the San Francisco Bay Area. During and following this recession, we can also expect to see failures or acquisitions of three or four New York Am Law 100 and 200 firms.
Firms that grew rapidly in recent years, spending or borrowing heavily to fund their growth, will suffer extra pressures during this recession. Those pressures will be hardest to withstand at firms where large blocs of partners have been together only a short while.
These forecasts should not shock anyone. Of the Am Law 100 firms listed in reports describing 1989’s financial performances, twenty no longer exist. Eight were acquired, and twelve have dissolved (see Table 2 below).
Twenty 1989 Am Law 100 Firms That No Longer Exist
A. Eight Firms Were Acquired
1. Brown & Wood
2. Hale and Dorr
3. Hopkins & Sutter
4. McCutchen, Doyle, Brown & Enersen
5. Rogers & Wells
6. Rosenman & Colin
7. Shaw Pittman
8. Winthrop, Stimson, Putnam & Roberts
B. Twelve Firms Have Dissolved
9. Arter & Hadden
10. Brobeck, Phleger & Harrison
11. Coudert Brothers
12. Gaston & Snow
13. Graham & James
14. Heller Ehrman White & McAuliffe
15. Johnson & Swanson
16. Keck, Mahin & Cate
17. Mudge Rose Guthrie Alexander & Ferdon
18. Pettit & Martin
19. Shea & Gould
20. Thelen, Marrin, Johnson & Bridges
6. Stronger firms absorb failing firms’ best assets, producing even stronger firms.
As in the past, many lawyers in firms that will fail or falter in the next few years will remain in private practice. An acquired firm’s strongest assets (lawyers) with the best strategic fit will be retained and assimilated, or they will find even stronger new homes.
Newly acquired and unhappy groups and practices at unsteady firms will be fair game for poaching firms with the resources to invest in new talent.
Odds are also strong that a Magic Circle firm and a top-tier New York City firm will soon find more reasons to merge than to stay single. If I had more courage, I would name here those two firms I fantasize will tie the knot.
Coming soon:
Tomorrow’s post concludes this series and addresses coming changes in:
7. Law firm partnership tiers
8. Marketing and business development functions
5. In this recession, many law firms will be dissolved or acquired by stronger firms.
I maintain a list of “weakest link” law firms—those that are nearing or have passed a tipping point in terms of falling lawyer headcount and net operating income (these two metrics seem to be as good or better indicators of potential law firm dissolution or fire-sale acquisition compared to more arcane metrics). Right now, my weakest links list contains the names of nearly a dozen US law firms among the Am Law 200, the dissolution or acquisition of which would improve the health of competing firms, in some cases dramatically.
As with earlier recessions, this one will drive some law firms to failure and weaken other firms that will fail after the recession ends. US regional markets that are particularly stressed include Atlanta, Boston, Ohio, and the San Francisco Bay Area. During and following this recession, we can also expect to see failures or acquisitions of three or four New York Am Law 100 and 200 firms.
Firms that grew rapidly in recent years, spending or borrowing heavily to fund their growth, will suffer extra pressures during this recession. Those pressures will be hardest to withstand at firms where large blocs of partners have been together only a short while.
These forecasts should not shock anyone. Of the Am Law 100 firms listed in reports describing 1989’s financial performances, twenty no longer exist. Eight were acquired, and twelve have dissolved (see Table 2 below).
Twenty 1989 Am Law 100 Firms That No Longer Exist
A. Eight Firms Were Acquired
1. Brown & Wood
2. Hale and Dorr
3. Hopkins & Sutter
4. McCutchen, Doyle, Brown & Enersen
5. Rogers & Wells
6. Rosenman & Colin
7. Shaw Pittman
8. Winthrop, Stimson, Putnam & Roberts
B. Twelve Firms Have Dissolved
9. Arter & Hadden
10. Brobeck, Phleger & Harrison
11. Coudert Brothers
12. Gaston & Snow
13. Graham & James
14. Heller Ehrman White & McAuliffe
15. Johnson & Swanson
16. Keck, Mahin & Cate
17. Mudge Rose Guthrie Alexander & Ferdon
18. Pettit & Martin
19. Shea & Gould
20. Thelen, Marrin, Johnson & Bridges
6. Stronger firms absorb failing firms’ best assets, producing even stronger firms.
As in the past, many lawyers in firms that will fail or falter in the next few years will remain in private practice. An acquired firm’s strongest assets (lawyers) with the best strategic fit will be retained and assimilated, or they will find even stronger new homes.
Newly acquired and unhappy groups and practices at unsteady firms will be fair game for poaching firms with the resources to invest in new talent.
Odds are also strong that a Magic Circle firm and a top-tier New York City firm will soon find more reasons to merge than to stay single. If I had more courage, I would name here those two firms I fantasize will tie the knot.
Coming soon:
Tomorrow’s post concludes this series and addresses coming changes in:
7. Law firm partnership tiers
8. Marketing and business development functions
Wednesday, April 15, 2009
Law Firm Economic Cycles -- Part II
This post continues the serialization begun yesterday of findings from analyses I performed last fall as my law firm clients were considering how best to respond to the economic downturn. To help them, I parsed US law firm performance data, particularly those from 1989-1996 to identify precursors to and impacts of the 1990-91 recession on law firms’ financial performances.
As noted yesterday, I have long since shared the insights gleaned from my analyses and their early warning benefits with my own clients. Therefore, it’s now appropriate to share them with a larger audience. Which brings us to today's post.
3. Higher-end firms suffer longest from recessions.
Partners at firms with the highest-end practices should manage particularly downward their expectations of an early recovery. A severe recession’s impacts are generally felt longer by the most profitable law firms, which rely on a stream of complex, high-value deals and, therefore, must wait longer for that level of economic activity to reappear and stabilize.
Evidence of the long-lasting effects of severe global recessions on highest-end law firms is offered by their performances during the early 1990s. After 1989, seventeen of that year’s twenty most profitable US law firms failed to produce profits per partner (PPP) higher than their 1989 PPP during at least four of the seven following years.
Overall, the most profitable law firms suffer the longest recession impacts. For example, twelve Am Law 100 firms failed to produce higher PPP for all seven of the years following 1989; these firms included Cahill, Cravath, Davis Polk, Gibson Dunn, Kaye Scholer, O’Melveny, Paul Weiss, and Skadden. Eight more Am Law firms failed to exceed 1989 PPP for six of the following seven years; these firms included Kirkland, Latham, Milbank, Wachtell, and Willkie Farr.
4. Lower-end firms tolerate recessions better and recover from them faster.
The data also show that those firms that generally feel a deep recession’s impacts for the shortest time are less profitable firms with low billing rates and the lowest profits per partner. Even in depressed times, day-to-day legal work does not subside.
Note: The two findings described above are brightly demonstrated by the data in a chart (click here) that I simply was unable to figure out how to include here (I welcome any advice and help from readers about how to do this).
As noted yesterday, I have long since shared the insights gleaned from my analyses and their early warning benefits with my own clients. Therefore, it’s now appropriate to share them with a larger audience. Which brings us to today's post.
3. Higher-end firms suffer longest from recessions.
Partners at firms with the highest-end practices should manage particularly downward their expectations of an early recovery. A severe recession’s impacts are generally felt longer by the most profitable law firms, which rely on a stream of complex, high-value deals and, therefore, must wait longer for that level of economic activity to reappear and stabilize.
Evidence of the long-lasting effects of severe global recessions on highest-end law firms is offered by their performances during the early 1990s. After 1989, seventeen of that year’s twenty most profitable US law firms failed to produce profits per partner (PPP) higher than their 1989 PPP during at least four of the seven following years.
Overall, the most profitable law firms suffer the longest recession impacts. For example, twelve Am Law 100 firms failed to produce higher PPP for all seven of the years following 1989; these firms included Cahill, Cravath, Davis Polk, Gibson Dunn, Kaye Scholer, O’Melveny, Paul Weiss, and Skadden. Eight more Am Law firms failed to exceed 1989 PPP for six of the following seven years; these firms included Kirkland, Latham, Milbank, Wachtell, and Willkie Farr.
4. Lower-end firms tolerate recessions better and recover from them faster.
The data also show that those firms that generally feel a deep recession’s impacts for the shortest time are less profitable firms with low billing rates and the lowest profits per partner. Even in depressed times, day-to-day legal work does not subside.
Note: The two findings described above are brightly demonstrated by the data in a chart (click here) that I simply was unable to figure out how to include here (I welcome any advice and help from readers about how to do this).
Tuesday, April 14, 2009
Law Firm Economic Cycles – Part I
For the next few days I will be serializing here some findings from analyses I did last fall as my law firm clients were considering how best to respond to the economic downturn. To help them, I parsed US law firm performance data to identify precursors to and impacts of previous recessions on law firms’ financial performances since the late 1980s.
Because I have long since shared the insights gleaned from my analyses and their early warning benefits with my own clients, it’s now appropriate to share them with a larger audience. Seven months later, some of my findings from last fall look like a big duh, although others still offer useful insights. All the findings endorse the good advice offered in December 2008 by Bruce MacEwen at http://www.adamsmithesq.com/ that we all should “read fewer newspapers [and study] more history.”
Last fall, I found strong parallels between the current recession and the 1990-91 recession. I remember 1991 well because it was the year I first entered the legal marketing scene. At that time, I lived in California where the economy was suffering terribly from overextended and failing banks and S&Ls, tanking real estate prices, rising unemployment, high oil and gasoline prices, a US war, stock market losses, and plummeting consumer confidence. Therefore, one focus of my research last fall became: What happened to the legal services industry (specifically big law firms) during and after the 1990-91 recession that can help us appreciate how our industry will be affected by the current recession? Here’s some of what I found.
1. The highest increases in large law firm revenues presage recessions.
My review of all Am Law 100 performance data since the late 1980s shows that those years in which the Am Law 100 firms’ total revenue increased by the greatest percentage (compared to the previous year’s performance) were in each of the three years preceding the appearance of the three recessions since 1984. Those banner total revenue increases occurred in fiscal years 1989 (17.8%), 2000 (17.0%), and 2007 (13.6%).
Apparently, an economic tide that lifts law firm revenue so high cannot sustain itself. This pattern announces that a downturn is imminent, due to imbalances in the marketplaces that feed large law firms.
2. Recessions can hurt large law firm performances for a long time.
Based on Am Law firms’ performances in the early 1990s, I foresee that the current recession’s impacts on large law firms, particularly on partner profitability, will be felt for four years or longer by most firms. This forecast is based on how long it took many firms to recover after the 1990-91 recession.
As noted earlier, 1989 was a banner year for Am Law firms. Eighty firms were included in the Am Law lists for all eight fiscal years 1989 through 1996, and I took special interest in those firms. From 1990-1993, more than half of those eighty firms produced profits per partner no higher than they had enjoyed in 1989 (see Table 1 below). The second year of the recession saw even more firms failing to exceed their 1989 PPP levels. It was not until 1994—four years after the recession began—that more than half of the Am Law firms in this sample finally produced partner profits beyond their 1989 levels.
Because I have long since shared the insights gleaned from my analyses and their early warning benefits with my own clients, it’s now appropriate to share them with a larger audience. Seven months later, some of my findings from last fall look like a big duh, although others still offer useful insights. All the findings endorse the good advice offered in December 2008 by Bruce MacEwen at http://www.adamsmithesq.com/ that we all should “read fewer newspapers [and study] more history.”
Last fall, I found strong parallels between the current recession and the 1990-91 recession. I remember 1991 well because it was the year I first entered the legal marketing scene. At that time, I lived in California where the economy was suffering terribly from overextended and failing banks and S&Ls, tanking real estate prices, rising unemployment, high oil and gasoline prices, a US war, stock market losses, and plummeting consumer confidence. Therefore, one focus of my research last fall became: What happened to the legal services industry (specifically big law firms) during and after the 1990-91 recession that can help us appreciate how our industry will be affected by the current recession? Here’s some of what I found.
1. The highest increases in large law firm revenues presage recessions.
My review of all Am Law 100 performance data since the late 1980s shows that those years in which the Am Law 100 firms’ total revenue increased by the greatest percentage (compared to the previous year’s performance) were in each of the three years preceding the appearance of the three recessions since 1984. Those banner total revenue increases occurred in fiscal years 1989 (17.8%), 2000 (17.0%), and 2007 (13.6%).
Apparently, an economic tide that lifts law firm revenue so high cannot sustain itself. This pattern announces that a downturn is imminent, due to imbalances in the marketplaces that feed large law firms.
2. Recessions can hurt large law firm performances for a long time.
Based on Am Law firms’ performances in the early 1990s, I foresee that the current recession’s impacts on large law firms, particularly on partner profitability, will be felt for four years or longer by most firms. This forecast is based on how long it took many firms to recover after the 1990-91 recession.
As noted earlier, 1989 was a banner year for Am Law firms. Eighty firms were included in the Am Law lists for all eight fiscal years 1989 through 1996, and I took special interest in those firms. From 1990-1993, more than half of those eighty firms produced profits per partner no higher than they had enjoyed in 1989 (see Table 1 below). The second year of the recession saw even more firms failing to exceed their 1989 PPP levels. It was not until 1994—four years after the recession began—that more than half of the Am Law firms in this sample finally produced partner profits beyond their 1989 levels.
It is possible that large law firms may indeed recover faster from this current recession than from the one in 1990-91 . This time around, firms have more quickly pared troublesome practices and unneeded resources, actions that law firm leaders were slower to take in the early 1990s. However, most firms and their partners must still prepare for multiple years of lower profits per partner.
Note: A fuller description of the research summarized above and in future postings is provided in a chapter I contributed to Leigh Dance’s new book, Bright Ideas: Insight from Legal Luminaries Worldwide. For more information about this book, which will be published in May 2009, please contact Leigh.
Coming soon:
Watch here for future posts re “Observations about Law Firm Economic Cycles,” e.g.:
3. Higher-end firms suffer longest from recessions.
Note: A fuller description of the research summarized above and in future postings is provided in a chapter I contributed to Leigh Dance’s new book, Bright Ideas: Insight from Legal Luminaries Worldwide. For more information about this book, which will be published in May 2009, please contact Leigh.
Coming soon:
Watch here for future posts re “Observations about Law Firm Economic Cycles,” e.g.:
3. Higher-end firms suffer longest from recessions.
4. Lower-end firms tolerate recessions better and recover from them faster.
Monday, April 13, 2009
Director’s Cut – Four Law Firm Scenarios
The scenario planning workshop provided by Outward Insights and Ann Lee Gibson Consulting to senior marketers at the 2009 LMA annual meeting got strong interest and good reviews.
Given law firms' growing interest in scenario planning, I have posted on my Web site the four detailed possible futures we designed for use during the workshop.
Even if you aren’t ready to do full-on scenario planning, do yourself a favor and read these four possible futures in which your law firm might soon be operating. Some are outrageous, some are grim. Each might (or might not) come to pass.
Then consider:
Given law firms' growing interest in scenario planning, I have posted on my Web site the four detailed possible futures we designed for use during the workshop.
Even if you aren’t ready to do full-on scenario planning, do yourself a favor and read these four possible futures in which your law firm might soon be operating. Some are outrageous, some are grim. Each might (or might not) come to pass.
Then consider:
- What actions and positions should your firm take today to succeed in each of these possible futures?
- Which actions / positions, taken now, would predicate your firm’s success in the majority of these scenarios?
- What early warnings would signal when / if each of these possible future were coming true?
- What other actions / positions should you take ASAP when it looks like one of these scenarios is coming true?
Sunday, March 29, 2009
Four Possible Futures for Law Firm Scenario Planning Workshop
LMA'ers will be tweeting at #LMA during sessions of the upcoming 23rd LMA annual meeting at Gaylord Conference Center on the Potomac. Therefore, LMA has asked speakers to share some of their materials with those who will be following these tweets. Good idea! And so ...
On Wednesday morning, April 1, Bill Fiora (of Nixon Peabody), Ken Sawka (of Outward Insights), and I (Ann Lee Gibson Consulting) will lead a three-hour scenario planning workshop for senior legal marketers.
Below is a summary of four possible futures we have developed for participants' use during the session. Working in small groups, they will identify core and contingent strategies for success under different scenarios, identify early warnings to recognize when scenarios are "coming true," and challenge their own and others' assumptions and strategies.
Each of the following scenarios describes a possible future for the legal industry intersecting somewhere between two dimensions: (1) timing of economic recovery (early 2010 vs. 2011-12) and (2) legal services delivery models (aggregated vs. disaggregated). The scenarios are summarized below.
Note to workshop participants: You will receive and work with scenarios that are much more detailed than the following summaries.
Scenario #1 -- The Great Pretenders describes a world where economic recovery begins in early 2010, the earliest anyone now hopes for. Global M&A activity, one of the earliest indicators of the recovery, surges as market-leading companies and those with large cash reserves acquire competitors and suppliers weakened by the recession. The strong are eating the weak and getting even stronger.
In this world, law firm leaders feel they have made it through the tough times and look forward to life as they once knew it. The recession was tough, but it encouraged necessary discipline and weeded out the weak. 2010 promises to produce the most law firm mergers and acquisitions ever recorded.
Scenario #2 -- Shattered! describes a legal industry dramatically altered by a perfect storm of events that created a PR nightmare for BigLaw. In this possible future, the recession’s impacts on the legal industry pale in comparison to other events that also grabbed the public’s attention. Inside BigLaw, the survivors of the 2008-09 layoffs still suffer from depression and guilt. In 2009, a runaway bestseller and a summer HBO TV series set the stage for a Wall Street BigLaw disaster fueled by debauchery and hubris. One of America’s most respected law firms has been brought very low, rocking New York society and BigLaw to its core. Law firms may never be the same.
As a result, the legal industry is reversing its bigger-is-better trend. Dozens of start-up law firms, prospering mid-sized and regional firms, mega-networks of telecommuting lawyers, and new legal vendors leap into the breach. It’s possible the growing economic recovery will allow BigLaw to repair its embattled reputation and rule again, but one thing everybody understands is that for the first time in a long time BigLaw has many serious competitors.
Scenario #3 -- The Big Chill is a future where the hoped-for 2010 recovery has not appeared and does not seem imminent. All governments and economists now agree the recovery will not appear until 2011 or later. Federal stimulus plans have dramatically slowed home foreclosures, but failed to thaw banks’ lending practices. The only bright spot in the corporate legal services market comes from the huge corporate M&A deals being struck in pharma, transportation, real estate, and energy at enormous fire-sale prices.
Corporate legal clients have much smaller legal budgets, but still face an overwhelming burden of legal issues, including bankruptcy, financing, litigation, and regulatory changes. In response, all firms survive by cutting costs to the bone and learn to compete on price. The largest companies discover they have no energy to deal with scores of smaller firms. The exchange of large amounts of commodity work for law firms and the BigLaw promise of safety for corporations becomes the two-ingredient glue that keeps big companies with big law firms. It is a painful time, particularly for legal vendors. Competition becomes cut-throat, pitting firm against firm—and in a surprising twist, some firms against some clients.
Scenario #4 -- Davids vs. Goliaths sees corporate legal clients having a radically different response to the continuing economic deep freeze. In a world already full of risk, they see little extra risk in moving from one law firm to another. All relationships are up for grabs. Some clients cancel their convergence programs, turning to procurement agents or consultants to deliver the best combination of price and expertise on each matter.
The legal industry is rapidly disaggregating. The fiction that big firms could develop and benefit from economies of scale is now seen for the naked emperor it always was. In BigLaw, some of the biggest rainmakers decide they’d rather not share their pie, and form their own boutique firms. In fact, new firms of all kinds are sprouting up all over. Technology vendors reorganize to provide turnkey services and compete directly with firms. Many law firms outsource everything but their most core legal services. Clients are buying legal services directly from India and China. The only certainty is that this is a time for pragmatists, not purists. Everyone who hopes to survive this era is now brutally scrutinizing their beliefs, styles, processes, and goals.
On Wednesday morning, April 1, Bill Fiora (of Nixon Peabody), Ken Sawka (of Outward Insights), and I (Ann Lee Gibson Consulting) will lead a three-hour scenario planning workshop for senior legal marketers.
Below is a summary of four possible futures we have developed for participants' use during the session. Working in small groups, they will identify core and contingent strategies for success under different scenarios, identify early warnings to recognize when scenarios are "coming true," and challenge their own and others' assumptions and strategies.
Each of the following scenarios describes a possible future for the legal industry intersecting somewhere between two dimensions: (1) timing of economic recovery (early 2010 vs. 2011-12) and (2) legal services delivery models (aggregated vs. disaggregated). The scenarios are summarized below.
Note to workshop participants: You will receive and work with scenarios that are much more detailed than the following summaries.
Scenario #1 -- The Great Pretenders describes a world where economic recovery begins in early 2010, the earliest anyone now hopes for. Global M&A activity, one of the earliest indicators of the recovery, surges as market-leading companies and those with large cash reserves acquire competitors and suppliers weakened by the recession. The strong are eating the weak and getting even stronger.
In this world, law firm leaders feel they have made it through the tough times and look forward to life as they once knew it. The recession was tough, but it encouraged necessary discipline and weeded out the weak. 2010 promises to produce the most law firm mergers and acquisitions ever recorded.
Scenario #2 -- Shattered! describes a legal industry dramatically altered by a perfect storm of events that created a PR nightmare for BigLaw. In this possible future, the recession’s impacts on the legal industry pale in comparison to other events that also grabbed the public’s attention. Inside BigLaw, the survivors of the 2008-09 layoffs still suffer from depression and guilt. In 2009, a runaway bestseller and a summer HBO TV series set the stage for a Wall Street BigLaw disaster fueled by debauchery and hubris. One of America’s most respected law firms has been brought very low, rocking New York society and BigLaw to its core. Law firms may never be the same.
As a result, the legal industry is reversing its bigger-is-better trend. Dozens of start-up law firms, prospering mid-sized and regional firms, mega-networks of telecommuting lawyers, and new legal vendors leap into the breach. It’s possible the growing economic recovery will allow BigLaw to repair its embattled reputation and rule again, but one thing everybody understands is that for the first time in a long time BigLaw has many serious competitors.
Scenario #3 -- The Big Chill is a future where the hoped-for 2010 recovery has not appeared and does not seem imminent. All governments and economists now agree the recovery will not appear until 2011 or later. Federal stimulus plans have dramatically slowed home foreclosures, but failed to thaw banks’ lending practices. The only bright spot in the corporate legal services market comes from the huge corporate M&A deals being struck in pharma, transportation, real estate, and energy at enormous fire-sale prices.
Corporate legal clients have much smaller legal budgets, but still face an overwhelming burden of legal issues, including bankruptcy, financing, litigation, and regulatory changes. In response, all firms survive by cutting costs to the bone and learn to compete on price. The largest companies discover they have no energy to deal with scores of smaller firms. The exchange of large amounts of commodity work for law firms and the BigLaw promise of safety for corporations becomes the two-ingredient glue that keeps big companies with big law firms. It is a painful time, particularly for legal vendors. Competition becomes cut-throat, pitting firm against firm—and in a surprising twist, some firms against some clients.
Scenario #4 -- Davids vs. Goliaths sees corporate legal clients having a radically different response to the continuing economic deep freeze. In a world already full of risk, they see little extra risk in moving from one law firm to another. All relationships are up for grabs. Some clients cancel their convergence programs, turning to procurement agents or consultants to deliver the best combination of price and expertise on each matter.
The legal industry is rapidly disaggregating. The fiction that big firms could develop and benefit from economies of scale is now seen for the naked emperor it always was. In BigLaw, some of the biggest rainmakers decide they’d rather not share their pie, and form their own boutique firms. In fact, new firms of all kinds are sprouting up all over. Technology vendors reorganize to provide turnkey services and compete directly with firms. Many law firms outsource everything but their most core legal services. Clients are buying legal services directly from India and China. The only certainty is that this is a time for pragmatists, not purists. Everyone who hopes to survive this era is now brutally scrutinizing their beliefs, styles, processes, and goals.
Wednesday, March 18, 2009
Taking Off the Blinkers--with Scenario Planning
A loud conversation is going on via legal periodicals, the blogosphere, Web 2.0 sites and at legal conferences about whether BigLaw is dying—and, if so, what other delivery models will fill clients’ needs and thrive. Although I’m enjoying the larger conversation—and enjoying watching the bets and side bets being made and taken—I’m also dismayed at the blinkeredness of some debaters.
Many, perhaps understandably, consider this topic solely from the position where they’re heavily invested and from which they see no possibility to reposition, even if they wanted to do so.
Too few on either side of this debate seem unable to suspend their lobbying efforts long enough to intellectually consider the possibility that their “put it all on red” bets may not be the winning ones.
And too few demonstrate the capacity to consider a variety of possible futures, none of which have come to pass yet and on none of which any of us should bet the farm without first exploring what other futures would look like and how our beloved strategies would fare there.
Worst of all, too many smart people—people who ought to know better—are not only behaving as though what’s happening today will continue forever, but also like none of our competitors (those stupider than us, right?) will change anything they’re doing in response to today’s and tomorrow’s events. To me, this behavior sounds like the kind of shortsightedness that helped get us into this current mess.
However … for those legal marketers, practice group chairs, and firm leaders who would to take time out to explore some alternate futures and consider how firms of various kinds might best position themselves to thrive in those possible futures—I invite you to consider scenario planning.
In fact, I invite you to attend this year’s Senior Marketers Program prior to the upcoming 2009 annual conference of the Legal Marketing Association, when the entire morning will be devoted to an interactive scenario planning workshop. The program will be held on Wednesday, April 1, at the Gaylord National Resort and Conference Center. Only ten seats are left. The price is wonderfully recession-priced at $395 for LMA members who will attend the LMA conference and at $595 for those who wish to attend only the Senior Marketers Program. Registration and program details can be found here.
Many, perhaps understandably, consider this topic solely from the position where they’re heavily invested and from which they see no possibility to reposition, even if they wanted to do so.
Too few on either side of this debate seem unable to suspend their lobbying efforts long enough to intellectually consider the possibility that their “put it all on red” bets may not be the winning ones.
And too few demonstrate the capacity to consider a variety of possible futures, none of which have come to pass yet and on none of which any of us should bet the farm without first exploring what other futures would look like and how our beloved strategies would fare there.
Worst of all, too many smart people—people who ought to know better—are not only behaving as though what’s happening today will continue forever, but also like none of our competitors (those stupider than us, right?) will change anything they’re doing in response to today’s and tomorrow’s events. To me, this behavior sounds like the kind of shortsightedness that helped get us into this current mess.
However … for those legal marketers, practice group chairs, and firm leaders who would to take time out to explore some alternate futures and consider how firms of various kinds might best position themselves to thrive in those possible futures—I invite you to consider scenario planning.
In fact, I invite you to attend this year’s Senior Marketers Program prior to the upcoming 2009 annual conference of the Legal Marketing Association, when the entire morning will be devoted to an interactive scenario planning workshop. The program will be held on Wednesday, April 1, at the Gaylord National Resort and Conference Center. Only ten seats are left. The price is wonderfully recession-priced at $395 for LMA members who will attend the LMA conference and at $595 for those who wish to attend only the Senior Marketers Program. Registration and program details can be found here.
Subscribe to:
Posts (Atom)
Posts
