Category Archives: Law Firms as Organizations

Advertisement for myself: The Aging of Professionals and What Can Be Done to Stop It

Herewith is essentially a press release to account for where I am and what I am doing.

Ed Winslow to present at World Conference of Lawyers and Accountants in Vienna

Brooks Pierce partner Ed Winslow has been invited to speak at the 2017 World Conference of the Geneva Group International (GGI) taking place from Oct. 19-22 in Vienna, Austria. GGI is a worldwide alliance of independent law, audit, tax, accounting, and professional advisory firms, ranked among the largest such organizations in the world with 566 member firms in 123 countries.  Winslow’s topic is “The Aging of Lawyers and What Can Be Done to Stop It.”

Following his presentation, Winslow will lead a panel discussion of lawyers and accountants from France, Germany, Washington, DC and Wichita, Kansas in which the panelists will address progressive management practices of professional services firms responding to the retirement of the Baby Boom Generation, including succession planning, creative roles for senior professionals, and alternatives to complete retirement.

Winslow, former managing partner of Brooks Pierce, has practiced law for over 40 years, with a focus on litigation, corporate law, and banking and financial services. He is the current chair of the board of trustees for the North Carolina State Bar Plan for Interest on Lawyers’ Trust Accounts and was the first North Carolina attorney appointed to the American Bar Association’s Commission on the Interest on Lawyers’ Trust Accounts. He is also chair of the board of trustees for Guilford College and a past member of the board of governors of the North Carolina Bar Association. He served as general counsel for the North Carolina Bankers Association for several decades.

 

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Law firms: consider the pilot fish and the shark

pilotoceanic_whitetipFor all the well-known reasons, aggregate demand for legal services delivered by traditional law firms is flat. That has been pretty well documented. (In fact, enough already.)

So, the firms that are succeeding are the ones taking business from others (they are taking business from other law firms and taking it from alternative legal services providers, as well).

Here are three opportunities for midsize firms in this jungle:

Midsize firms can take business from big firms when clients elect to hire smaller firms where (i) the service is equivalent or better, (ii) costs are lower, and (iii) firm principals are more directly engaged in direct client service.

Midsize firms can take business from small firms where the midsize firm can bring broader and deeper capabilities.

Midsize firms can take business from anyone, anywhere, any time a midsize firm can provide experience-honed legal judgment delivered person-to-person by empathetic, seasoned professionals.

But “taking business” from others need not be all tooth-and-claw. Think instead pilot-fish-and-shark.

Artful midsize firms can build lasting, mutually beneficial relationships with other firms — large and small — law firm and alternative provider —  by networking, collaborating, complementing.

Midsize firms are uniquely apt for networking.

Mid size law firms doomed to planning, diligence

due-diligenceGuilford College president Jane Fernandes once counseled the College’s board of trustees that there is a difference between “planning” and “hoping.” (She communicated this very diplomatically, a measure of her fitness for her job.)

In a word (well, two words) the difference is “due diligence.”

British law firm consultants Edward Drummond & Co recently advised “mid-tier” firms in England that the largest London firms are shouldering mid-tier firms out of high-margin work. Mid-tier firms, Drummond says, are in danger of losing their ability to attract new business.

But, there is hope. Drummond, itself a planning consultant, says there is

scope for mid-tier firms to improve their margins by placing greater focus on ‘rigorous strategic planning’. For their new ventures to be effective, the consultancy said, it was imperative that mid-tier firms dramatically ramp up in-depth market research and competitor analysis while also ensuring a thorough understanding of the potential opportunities and risks of the work.

Firms were warned that without carrying out detailed due diligence, they could risk seeing seemingly profitable new business ventures suffer or even fail.

Before firms commit to “new lines of business” though, a Drummond partner counseled

  • analysis of competitors,
  • identifying gaps in the market, and
  • targeting potential clients

Failure to commit to rigorous due diligence is more strategic hope than strategic planning. It risks doom.

What all this means in the context of mid-size American law firms is a horse of a somewhat different color than what British mid-tier firms face, but still a horse.

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Midsize law firms showing vigor

A glass building in downtown Greensboro,North Carolina. Notice the reflection on the glass.

An outfit that calls itself “MidLaw” and extols the virtues of midsize law firms probably has an obligation to call attention to January 12’s Georgetown Law Thomson Reuters “2017 Report on the State of the Legal Market” wherein it is reported (pages 13 and 14) that

midsize firms saw a consistent upward trend in demand growth and fees worked, as well as an improvement in productivity from the beginning to the end of the [last 3 years]. … One possible interpretation of these results is that clients, while still directing some types of work to high-end, fairly specialized, premium firms (like the AmLaw 50) are increasingly willing to move substantially down market to smaller firms (midsize firms) in order to achieve significant price savings.

For purposes of discussion, MidLaw is going to be large-minded about these references to what is “high-end” and what is “down market.” We could have found more directionally accurate terms.

Much in the 18-page report confirms what you’ve heard here at MidLaw for years in multiple posts.

 

The ecosystem of our kind: consultants to consultants to consultants

evolution-013First-of-the-year projections are still arriving at my inbox.

Added to the traditional providers now there’s a lively and growing new ecosystem of law firm consultants. There are all kinds of them. They do M&A, marketing, strategic planning, headhunting, IT, cyber security, all kinds of risk management, and more. Their categories are subdividing, their numbers multiplying. And they are projecting up a storm.

Many report that demand for legal services is growing again. “Exciting,” one of them said this morning. Transactional work for lawyers at all levels is growing, they say.

But just about as many say that demand is flat. That group tends to say that relatively few firms are taking work away from everybody else.

Still others are looking a bit further out. They are assessing artificial intelligence, non-lawyer legal services providers, the growth of legal departments, and the continuing expansion of accounting firms onto old-time lawyer turf. Most of them predict different kinds of long term demise. Some not.

I’m seeing a trend, myself. Demand for law firm consultants is up (it must be because there seem to be so many of them). But, wait, maybe it’s down (it must be because they are marketing so hard with their projections and all).

Anyway, I project a growing market for advisors to law firm consultants. Consultant consultants.  Just like anybody else, law firm consultants need advisors: someone to help them with their elevator speeches; someone to advise them about their mergers; someone to think about the impact of artificial intelligence on what they do.

They need somebody to tell them to be agile. We all do.

Law firms are surrounded. We must circle the wagons. But around what?

165hThe Financial Times recently published a very good, short article about legal technology: “Artificial intelligence disrupting the business of law.” It drives home the point that law firms are surrounded by new technologies, by alternative providers, by accounting firms providing legal services, and more. Big Law is under attack and it is beginning to fight back by investing in big technology.

MidLaw can never do that. Mid-size firms must look to third party providers to bring technology solutions.

But that’s fine. It frees mid-size firms to focus on their particular competencies, their core clients, and their home markets.

What does a mid-size firm do uniquely well? What is its focus? Get clear about that. There is a different answer for every firm. Context matters. Identity matters. Competence matters. Ethos matters.

The counter-intuitive next step after finding focus is to go beyond it. After you know who you are, the next step is to ask what goes with that? How do you grow it? What else can you be? What other services are natural expansions of core competencies?

And here is a key: growth beyond core competencies may not be limited to services that require a law license. The definition of the “practice of law” has limited relevance to the growth of a law practice. Do not allow the fact that you are a law firm delude you into the belief that you are limited to delivering legal services. Non-lawyer competitors are thriving based on the proposition that much that law firms do is not the practice of law.

Context matters:

  • who are you?
  • what are you good at?
  • what are you uniquely good at?
  • who are your clients?
  • what services can you provide to them, whether the practice of law or not?
  • what markets do you reach, can you reach?

The definition of the phrase “law firm” is shifting, shaking, and shrinking. Potential clients don’t see law firms as alternatives that all do about the same thing. And they don’t much care what the legal definition of  “the practice of law” may be.

Mindful governance for boards of directors, trustees

Illustration by Lars Leetaru

Illustration by Lars Leetaru

The Mindful Board: Mastering the Art of Conscious Governance by Charlotte Roberts & Martha Summerville is just out.

It will take anyone involved in making decisions for a group or a system onto new ground. Good book. More here later.

Available at fine bookstores from one end of the World Wide Web to the other.

Roberts and Summerville are high-powered Guilford College trustees.

ABA studies the future; Axiom opens an office: hires lawyers in Charlotte

cat-in-tieThe American Bar Association recently released its Report on the Future of Legal Services in the United States. Not long afterward, the ABA House of Delegates refused to approve outside investment in law firms. The ABA Commission on the Future of Legal Services contemplates state-by-state examinations of the issue, to be followed by local decisions state by state.

Last week, Axiom, a provider of “legal solutions” and “leader in the business of law,” announced opening an office in Charlotte.

Axiom is not a law firm. It is a business. It employs lawyers. It delivers legal services. It is an “alternative to the traditional law firm” — “more flexible, elastic, and commercially-minded”.

Axiom has begun hiring lawyers for Charlotte. It is hiring “elite talent that wants to practice in the Axiom mode.” And “looking at every practice area.

So, there’s them that studies and them that does.

 

Video interview with NC Chief Justice on future of legal services

future-legal-services-hero_jpg_imagep_980x179-2-png-imagep-980x179North Carolina Chief Justice Mark Martin represented the judiciary on the American Bar Association’s Commission on the Future of Legal Services whose report was published earlier this year, and so Chief Justice Martin was interviewed recently by Ralph Baxter, Chairman of Thomson Reuters’ Legal Executive Institute, who asked the Chief  (i) about broadening the scope of those who can participate in delivery of legal services (that is, who beyond licensed lawyers can provide legal services?); and (ii) about opening the door for non-lawyer investment in the business of legal services (can law firms issue stock?). Chief Justice Martin described the process by which such changes could come.

New proposals can come either through the ABA or directly at the state level. The ABA’s House of Delegates has already refused to approve outside investment in law firms. Even so, the Commission recommends that the states continue to consider the issue.

“So [non-lawyer investment in law firms is] one of those things that might happen,” Ralph Baxter observed to the Chief Justice in the video interview. The Chief’s response, a nonverbal chuckle, is the very model of making a noise without making a comment. Judicial and judicious. Worth the price of the (free) video.

 

MidLaw chauvinism

A photo by Charlie Harutaka. unsplash.com/photos/Gacd_XeSGQk

Photo by Charlie Harutaka.

Occasionally MidLaw has been characterized as diagnosing the obsolescence of mid-size firms. Sometimes we’re even said to be predicting the demise of mid-size firms. So I was glad that Kathryn Whitaker titled her JD Supra interview with me as “The Case for the Mid-Sized Law Firm.”

Of course, from time to time MidLaw does seek to understand the changes around us. And, from time to time it adverts to those who predict the end of the practice of law as we know it. Sometimes, MidLaw countenances those who proclaim the end of law firms altogether. But withal — MidLaw is solid – firm – in the conviction that mid-sized firms will be the last to go.

Kathryn quotes me as saying

A mid-sized firm is the best place on the planet to be a lawyer. The key is direct engagement with clients and colleagues.

Well, that’s what happens with oral interviews. You get all wound up and then you say something that you can’t take back. So, I am staked out. But, at least I believe what I said. No pivot here.

[In an earlier post, MidLaw proposed to republish Kathryn’s  JD Supra interview in this space, but I have come to the conclusion that the thing is just too long to put here, especially when it’s already been published over there. So, here’s another link instead.]

The main thing is: We will be the last to go!

Henceforth please understand: when MidLaw acknowledges the challenges that beset us, I am  simply setting the stage for us once more to demonstrate our resilience – to flex our agility. Remember, it was MidLaw who said these five years past, “Mid-Sized Firms Are the Only Hope for the Future of the Legal Profession,” and, later, more modestly, “I like MidLaw’s chances.”