Can Addleshaws live up to its own reputation?

For Addleshaw Goddard, its own reputation must now seem as much a burden as it was recently an asset. Indeed, judging from the problems that have hit the firm over the last two years, a cynic would wonder if there was something of a prize 'got without merit' in its image.

The firm had two well-handled mergers behind it, a superb client base, plenty of good partners and a reputation for cohesion and tight management. With the exception of its sizeable real estate team, several years back the upwardly mobile and decisive firm seemed one of the best bets to buck the post-crunch gloom.

Instead, the firm finds revenues have shrunk for three years in a row while partner profits this year won't be much better than half the top 50 average. Underperformance like that doesn't happen without something going wrong with the business.

Yet, if in retrospect the firm's standing was raised beyond justification during the boom, its considerable achievements shouldn't be dismissed now. It is the way of these matters that problems typically set in at large businesses years before they become apparent – usually, in the case of law firms, when they seem at the height of their powers.

There was a touch of bad luck in the timing of the deal for Addleshaws' flagship new London office – though only a touch. The storm clouds were already on the horizon when it committed itself to a site that would become a drain if its growth slowed.

Moreover, the time to start going international was surely the mid-noughties, after the smooth integration of its City merger had been completed and its finances were in good order. No-one would dispute the value of a slick City office – but it's debatable whether this is a significant enough asset to justify putting its international ambitions off for so long.

I would also argue that the firm must keep an obsessive eye on the premium end of its practice. Addleshaws' name was founded on its credibility with plc clients and a high-quality partnership – it appears it has too often in recent years been edged down the value chain. Realistically, a more flexible remuneration system for partners looks not only sensible but inevitable if it wants to keep competing credibly in the City.

In facing up to some considerable challenges, one thing the firm cannot be criticised for is a piecemeal response. In May, the new management team of Paul Devitt and Monica Burch unveiled a stream of measures covering governance, remuneration and its cost base. There is also the much-touted attempt to build a low-cost hub in Manchester.

In essence, Addleshaws concedes this will be a crunch year, but argues that it has a comprehensive programme for recovery that will come good. If nothing else, this year should answer once and for all how solid are the foundations on which Addleshaws' brand rests.