Five years ago, the managing partners of two midsized Philadelphia-based law firms determined they would have to diversify out of their significantly weighted insurance defense practices because the declining fee structure and the increasing competition could not support long-term growth and the relatively high compensation levels paid to the members of each firm. Not only did the managing partners announce their new long-range plans to the partners and associates, but they established elaborate plans to acquire attorneys with profitable books of business in other disciplines. Today, after several years of floundering in attempts to acquire and develop new disciplines, both firms are firmly back doing insurance defense work, and the two managing partners have been replaced.

Each of the managing partners had been unable to implement their diversification strategy, not because it was theoretically wrong or inappropriate, but because neither had understood that their firm’s culture was so entrenched in the traditions and values of practicing law as insurance defense lawyers that a significant number of the partners resisted the changes that the managing partners tried to impose. Both managing partners realized, too late, that strategies can only be embraced and implemented by the partners with the wholehearted effort and willingness of everyone involved. If implementing the recommended strategies violates the partners’ basic beliefs about what the firm should be and their roles in the firm, or the traditions and values that underlie the firm’s culture, they are doomed to fail.

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