The 5 Most Dangerous Mistakes Law Firms Make

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  • All fail because of poorly managed or implemented business practices such as debt loads, which often including over extended financial leveraging, significantly deferred financial obligations, low productivity and poor visualization; Internal dynamics mainly focused on leadership or the lack thereof, incompatibility between partners, their skills sets and goals, and differences over compensation philosophies; External dynamics involving the firms client base, the acquisition and expansion of the same, qualified talent and external partnerships (strategic relationships).
  • The 5 Most Dangerous Mistakes Law Firms Make

    1. 1. THE MOSTDANGEROUS 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
    2. 2. 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.
    3. 3. 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.
    4. 4. 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
    5. 5. 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 people 2010 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
    6. 6. 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
    7. 7. 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 Journal John P. Heinz, American Bar Foundation Owen L. Coon, Northwestern U. School of Law
    8. 8. TRENDS 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
    9. 9. QUI NON PROFICIT, DEFICITHe who does not advance, go backwards 3 P
    10. 10. 3 P • Planning (better systems) • Policies (the guidelines, the why) • People(internal and external relations)
    11. 11. 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
    12. 12. 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
    13. 13. 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?
    14. 14. 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.
    15. 15. 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.
    16. 16. 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?
    17. 17. 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
    18. 18. 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
    19. 19. 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
    20. 20. 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
    21. 21. 40% of all major litigation currently faced by law firms is from their own dissatisfied and un-happy clients.
    22. 22. 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.
    23. 23. The „Business‟ of Law1. Poorly managed or implemented business practices - debt loads2. 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).
    24. 24. Laser-Focused Strategy“He will win whose armyis animated by the samespirit throughout all itsranks”Sun Tzu
    25. 25. THE MOSTDANGEROUS 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
    26. 26. The 5 Most Dangerous Mistakes Law Firms Make Request your FREE copy of this compelling report 888-501-3157

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