“Unchecked Hourly Fees = Absurdity!”, “The Great Pyramids: Ancient Wonder or AmLaw 100 Business Model?”.
To read most practice management publications, you’d think that national and multinational law firms are on the path to destruction. To read Bruce MacEwen’s book, “Growth is Dead: Now What?” you might think again. But you’d better steel yourself. The journey off-course could be bumpy.
Lawyers interested in the longevity of their firms would do well to read this book.
I heard about “Growth is Dead” when partner and practice group chair of an international firm lent it to me. I emphasize the word “lent” because he was so excited by its message that he wanted to re-read it after hearing my review.
While this gave me hope, the book itself gave me optimism.
MacEwen knows of what he speaks. He practiced law for 20 years; 10 with Morgan Stanley/Dean Witter and 10 with a New York firm. He runs a successful management consultancy, Adam Smith, Esq.. He has a seat at the proverbial table as a Fellow of the College of Law Practice Management and has published over 1,300 articles on firm strategy.
The credentials alone would be enough for most to sit up and take notice. But MacEwen synthesizes market research with lessons long ago learned by the business world to make a poignant case: the legal services market isn’t changing. It has already changed.
You might be as familiar with the evidence as I was. We listen to conference panels of Fortune 500 General Counsel patiently explaining how firms can provide value. We highlight regulatory changes. We study economic indicators. We report back to the decision makers. We keep trying to update business models. Sometimes we stop trying. (MacEwen nicely explains why this happens so often, which will earn him plenty of bonus points with the legal marketing crowd).
Two senior lawyers I know read the book at the same time as me. Both agreed that MacEwen’s thesis – that firms need to anticipate market demands, that the heady days of high profit margins are over, and that excess capacity must be addressed– holds true.
Although “Growth is Dead” focuses on large firms, its tenets can be applied to those of any size, in any market.
- Lawyers and those they entrust to lead operations must sharpen their business acumen. Quickly. Firms that operate like businesses will beat competitors. Firms that operate like fiefdoms will go the way of the feudal system.
- Clients are not becoming more “fee sensitive”. What clients are becoming is value-focused. And value is defined by the client, not the lawyer. Clients want confidence in the return on their investment in legal fees. It’s a reasonable request.
- Globalization is not a trend. It’s reality.
- Your competition is not who you think it is.
- Governance is more important than ever. Firms with the fortitude to cut across internal silos will adapt, innovate and survive. But it will take courage, imagination and a lot of tough love. (See point #1.)
MacEwen’s logic is difficult to argue with. His comments about doing what is right rather than convenient are on-point (especially in the areas of segmentation, pricing and self-awareness). My only concern about his premise is that business development professionals and those responsible for firm strategy will be the only ones who nod their heads in agreement.
Associates and future partners also need to take the message to heart. If they don’t, MacEwen’s sage advice will be relegated to the same dusty spot on the bookshelf as all the other practice management classics given to them at firm retreats. That would be a shame.