THE MOST

DANGEROUS

MISTAKES

LAW FIRMS MAKE

...and How they Can Impact You, Your Reputation, Your Firm,

Your Colleagues, Your Clients, Your Employees and Your Future...

Image source: sesow.com

Areas Covered

• Several millions dollars of research indicate five major trends that must urgently be address by every firm or they will cripple the success of your firm and career:

▫ – escalating competition + accelerating change▫– the spiraling impact of stress▫– increasing dependence on human capital▫– a shrinking talent pool▫– rising demands upon leadership▫- strategic relationships

• This research also points to the critical action steps necessary to secure your future prosperity.

Who are you?

• Whether you are a Solo Practitioner or part of a Small, Medium or Large law firm…

• Whether you have 5, 10, 25, 50 or 5000 employees…

• There are alarming market trends that can cripple the success of your firm if you do not take decisive action.

Trends

• Accelerating change

• The impact of spiraling stress

• Dependency on qualified human

capital and the shrinking talent

pool

• Debt loads

• Leadership 2.0

• External Relations

Challenges?

• 1.3 Million Attorneys▫200 Accredited Law Schools

50 Thousand New Lawyers▫65 % set-up practice within 2

years

Attorneys Per Capita*In 1970 there was

1 attorney for ever 700 people2010 there was 1 attorney for ever 340

San Francisco there is 1 attorney for ever 66Washington D.C. there is 1 attorney for ever 33

By 2052 it will be 1 in 2

Source: American Bar Association, 2011

Even the Most Powerful are Vulnerable

2008 and 2009 were marked by the largest corporate failures & bankruptcies in U.S.

History, including such giants as:

• Lehman Brothers, $691 Billion • Washington Mutual, $327.9 Billion

• WorldCom, $103.9 Billion • General Motors, $91 Billion

• CIT Group, $80.4 Billion • Enron, $65 Billion

• ConSeco, $ 61.4 Billion • Chrysler, $ 39.3 Billion

• Thornburg Mortgage, $ 36.5 Billion • Pacific Gas & Electric, $ 36.15 Billion

Source: BankrupcyData.com

Rainmakers with Umbrellas

• The Heller Ehrman – 730 lawyers

• Thelen law Firm – 630 lawyers

• Latham and Watkins – 190 lawyers, 250 staff

• David Stern – 1,200 people

Sources: Karen Sloan, National Law JournalJohn P. Heinz, American Bar Foundation

Owen L. Coon, Northwestern U. School of Law

Escalating Competition + Accelerating Change in the Economic Landscape

• In 1990 it took six years to develop a new model car – currently it takes 24 month.

• A generation ago there were 50,000 computers in the world – there are that many being installed today, as you read this

• In another two years there will be a billion people surfing the Web

TRENDS

QUI NON PROFICIT, DEFICIT

He who does not advance, go backwards

P3

P3

•Planning (better systems)

•Policies (the guidelines, the why)

•People (internal and external relations)

Words of Wisdom

• “Remember, at the end of the day, the ability to learn faster than our competitors may be our only sustaining advantage. Everybody else is the world is hoping the same thing we are. We’re going to get there faster with better prepared people.” Larry Bossidy, CEO

Honeywell International, Inc

Challenges for Today’s Firms

• To survive you must stay

competitive

• You must learn to master

“permanent white-water”

• You must come to grips

with constant and never-

ending change

Restructuring, downsizing,mergers, acquisitions

• There is no escaping change in

business

• While you are busy trying to make

things better, your employees

may be left shaken and unsure

• No matter how well you’re

leading... Are your employees

actually following?

Even the most experienced leader needs to be careful

• Some of the most simple problems can cost money and use up your valuable time

• Solving some of these problems can bring on a landslide of new problems

• There is so much more to consider than just offering your services

• Have you begun to develop the necessary strategic plans for your firm, your future, people, your career.

Laser-Focused Strategy,Flawless Execution

• A ten year study published in the Harvard Business Review found that companies which out performed their industry peers excelled in at eight

• The first two are:▫ Laser-focused strategy – sharply

defined, clearly communicated, and well understood by employees, customers, partners and investors.

▫ Flawless execution of that strategy throughout the company, from the top

execution on down.

Critical Question

• Are you satisfied with the results

of your current business?

• Is it sound enough to ensure

increased success over the next

10 years?

• Is it being executed consistently

by everyone in your organization?

The best strategy in the world is worthless your people are fully committed to it

• Effective execution is driven by employee committed – which is influenced by a number of variable:▫ Satisfaction with co-workers▫ Ease of access to the tools needed

to perform their job▫ Tasks independence or team

reliability▫ The degree to which employees

receive conflicting orders or requests from supervisors

▫ Satisfaction with superior vision or management

Keeping your employees “satisfied” is no longer

enough“The most essential best practice is the

measurement and cultivation of employees engagement - which is significantly distinct from satisfaction. When employees are highly engaged and their energy and actions are aligned with the goals of the enterprise, a dynamic of growth emerges. Research in recent years indicates that employee satisfaction is only minimally predictive of organizational performance; employee engagement, on the other hand, is a powerful leading indicator of whether the company will be successful. “

Source: U.S. Business Review, Nov 2006

Your Firm?

• Personnel is not satisfied with status quo – they all think and act like entrepreneurs

• Innovative and add great value

• Happy with self, with what they are doing, and where they work.

• Motivated by work and go the extra mile for the client and the company

Competition?

“There is more emphasis on growing business, so the partner who is maintaining the status quo is falling behind."

-Shook, Hardy chair John Murphy in "Building a

Breakout Firm."

Source: American Lawyer, December 2011

40% of all major litigation currently faced by law firms is from their own dissatisfied

and un-happy clients.

Reports Like:

• ‘The Most Dangerous Trends Facing Lawyers Today’ by Cole Silver, a lawyer and certified marketing consultant with 30 plus years of experience who heads the Silver Group

• ‘Why Firms Fail’, by Burkey Belser and Mark T. Greene of Greenfield/Belser Brand Design Ltd.

•‘The Top 20 Reasons Lawyers Fail’ by Keith Lee of associatemind.com

•‘Anatomy of Law Firm Failures’ with an in-depth look at Law Firm Dissolutions written by William G. Johnson at Hildebrandt International.

All point to three major discernable areas of business – the ‘business’ of law, not the practice of law in itself.

The ‘Business’ of Law1. Poorly managed or implemented

business practices - debt loads

2. Internal dynamics mainly focused on leadership or the lack thereof, incompatibility between partners, their skills sets and goals, and differences over compensation philosophies;

3. External dynamics involving the firms client base, the acquisition and expansion of the same, qualified talent and external partnerships (i.e. strategic relationships).

Laser-Focused Strategy

“He will win whose army is animated by the same spirit throughout all its ranks”

Sun Tzu

THE MOST

DANGEROUS

MISTAKES

LAW FIRMS MAKE

...and How they Can Impact You, Your Reputation, Your Firm,

Your Colleagues, Your Clients, Your Employees and Your Future...

Image source: sesow.com

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The 5 Most Dangerous Mistakes Law Firms Make