Many firms – maybe most – don't have a strategy

Law firms don't generally have strategies. This basic point often gets lost in the commentary about the legal industry. What firms in many cases actually do is what they want to and then rationalise that as strategy. To a certain extent this course will be shifted by the client and labour markets and the fashionable business ideas of the day. But the pedestrian on this path will basically head where he wants to go, at least until he runs out of road or the conditions render the path impassable.

I was reminded of this recently when hearing of a firm I know well outlining its new strategy. The basic elements of this strategy don't really matter beyond one basic point: it is a 180-degree reversal of the firm's strategy a decade ago. Over that period the firm has shifted its strategy roughly 30% every two years as market realities have forced continual modifications of its plans. None of which, I would argue, has helped the firm get on the front foot.

This is a fairly extreme example but it is representative of many large commercial firms. Conservatism and the nature of partnership means law firms are still largely defined by what the partnership in its gut wants to do and wants to believe.

Does it matter? It depends how ambitious you are and how substantive the delusions your partners are labouring under. The ambitious firm that wants to have a hope of moving up the pecking order – or often even maintaining their position among the top performers in their peer group – needs some clarity to its gameplan to guide it and to judge performance against. Likewise, a firm that allows itself to believe its business has far more potency than reality is proceeding on a false prospectus.

One of the reasons, I suspect that firms short-change themselves on strategy is that they wrongly believe it is synonymous with plans for grandiose expansion. For many fine firms, sound strategy will not mean dramatic structural change, at least over a five-year view. What it should mean is working out what you do that drives success and making sure you keep doing it. (If you're in this camp and still need to be told that more than half the battle is improving the quality of the partnership, intake and client-base, then you're beyond my help).

There is also the misconception that strategies are complex. Successful strategy is usually simple in its broad strokes because that is the only way you can get anyone to understand it or act on it. Indeed, the problem with law firm 'strategies' is that, being a kind of laundry list of disparate interests, they become unwieldy and next to useless for changing anything.

Firms using such a dysfunctional or delusional strategy will make bad decisions and fall behind more clear-sighted rivals over the long term. It's that simple.

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