Bruce MacEwen has been writing AdamSmith Esq for over a decade, but last year his series “Growth is Dead” both stunned and perplexed law firm leaders throughout the US.
At best I can offer what I would call " the Haiku of Adam Smith Esq."
- Financial recessions are different.
- Law firm leaders only began to identify efficiency as a desirable goal four years ago.
- When comparing law firms look at revenue per lawyer… it is more reliable because it is harder "to game."
- Revenue per lawyer in Q1 of 2013 was down 23% for corporate work and 26% for litigation.
- Excess capacity triggers the irrational impulse to offer irrational discounts.
- Most law firm partners don’t know the difference between revenue and profits.
- Lawyers still divide the world into lawyers and non-lawyers.
- Law firms may need to move to a new leverage model of 1 partner to 1 associate.
- Law firms should cultivate an active alumni network including lawyers who want to work part time or on a temporary basis who can be tapped when the firm needs to staff up.
- Proactive firms are more profitable than reactive firms.
- Substitutes are more dangerous than competitors. LPOs are substitutes. For every one dollar an LPO gains, law firms lose 3 dollars.
- Running a law firm is 5 times more complicated than running any other kind of business.
- Lawyers need to practice law and let the professionals, manage the firm. He means those darned non-lawyers need to manage.
- Law firms need credentialed, senior level executives to run the business of the firm.
- Law firms and lawyers must determine their distinguishing strategic proposition.
- Most partners can not and most firm websites do not describe their firms " Unique Strategic Proposition."
- A Distinguishing Strategic Proposition is distinctive, compelling and credible.
- Law firms must build visibility in a digital world.
- There is no entitlement to incumbency. Quoting from the CEO of now defunct, A&P Stores before they slid into oblivion,” You can’t argue with 100 years of success,”
- Complacency is the biggest threat to law firms.
- Lawyers are psychologically ill suited to reinvent their law firms. (Too skeptical, too independent and too risk averse,)
- Lawyers hate failure. But they need to learn to take chances in order to improve their firms and become more competitive. This may involve some failures.
- Law firms need to invest in R&D in order to reinvent their own future.
This list is not be enough, read the book, Growth is Dead and subscribe to the AdamSmithEsq website to receive Bruce's ongoing commentary on the state of the legal marketplace. Well done Bruce!.