Walker Clark
Worldview Archives
The Antidote to Fear
In recent confidential discussions with law firm leaders around the world, the author has noticed a very interesting apprehension that seems to be emerging as they consider the business prospects for their firm in for the next two to five years.
How then, can a law firm navigate through the strategic fears about the rest of the decade -- even the rest of 2025 -- with a reasonable degree of confidence?
Establishing a Risk-Management Program for AI in Law Firms
How can your law firm's risk management programs keep up with the ethical and practical challenges of artificial intelligence?
Here is a "quick start" outline.
Time to Get Really Serious About IT Security
The rapid development of the Dark Web and the adoption of new operational modes in the legal services industry, such as working at home, pose substantial new threats to many law firms that might have previously assumed, correctly or not, that they were "immune" from hacking and ransomware.
There are several basic steps that any law firm, of any size and anywhere, can take to reduce the risks.
A Quick — But Not Easy — COVID-19 Strategic Checklist for Law Firms
The March 9, 2020, issue of Bloomberg Businessweek contains a practical strategic checklist to "make your company disaster-proof-ish."
The nine steps listed in the article apply with full force to law firms, especially small and midsize ones. It should be required reading for every law firm managing partner.
Why don’t they want to become partners?
This is not just something that we can blame on "the Millennials."
For the past 20 years, partners from law firms of all sizes, in almost every part of the world, frequently have told me that they can't understand why so many of their best associates and non-equity partners decline the offer of equity partnership.
Partner Compensation: a Small Law Firm’s Biggest Risk?
Smaller law firms have much less tolerance for poor management. The loss of just a few clients or even one partner can have a disproportionately larger impact than in a larger firm.
One of the biggest risks to a small law firm — and one that is frequently overlooked or, in some partnerships, deliberately ignored — is its partner compensation system.
Does your law firm have a war plan?
At no time since the 1960s have the signs been more ominous.
One increasingly has the sense that the increasing tensions between the United States and North Korea will not end well.
If your practice involves Asian clients, cases, or transactions, especially in northeastern Asia, you should develop a "war plan" now.
The International Challenge to Asian Law Firms
As international law firms from outside the region become more deeply embedded in the legal markets of Asia, the leading local and national law firms, which previously may have held relatively secure market positions, must respond quickly and accurately to these new competitors, or face relegation to the lower, less-profitable levels of the market.
After We Hit the Iceberg
The massive systems failure at Delta Airlines on 8 August 2016 disrupted operations for more than 48 hours and left tens of thousands of Delta passengers stranded.
Delta Airlines is one of the largest airline companies in the world, with perhaps the world's largest and most sophisticated operations systems, but Delta's experiences over the past several days provide sobering warnings to even the smallest law firms that take don't take disaster planning and client relations recovery seriously.
So, before we all get into too much of a high dudgeon about Delta Airlines and other air carriers that have experienced similar systems problems, let's look at your law firm. There are some good lessons to be learned from Delta's misfortunes this week.
Could this disaster have been avoided?
The Lawyer reports today that the U.K.-based international law firm Withers has lost its appeal of a GBP 1.6 million (US$ 2.4 million) professional negligence judgment arising from an associate's defective drafting of an LLP agreement.
The plaintiff, Wellesley Partners, had been a long-standing Withers client. The trial court found that a Withers associate's "misremembering" of his instructions ultimately resulted in losses to the plaintiff of more than GBP 1.5 million in London and in the United States, plus substantial additional internal costs.
Engagement Letters: The Riskiest Documents in Your Practice?
When a new client appears at the front door of your law firm, do you see opportunities or risks?
Our firm's experience advising law firms on risk management issues demonstrates that law firms can incur substantial risks in the way that they manage the intake of new clients and matters. The focal point for these vulnerabilities is the engagement letter.
Adopt a "merger mentality" even when it's not a merger.
Small and mid-sized law firms are receiving lots of proposals for affiliations that are less than a traditional law firm merger. They frequently ask us, "How should we evaluate these opportunities?" We advise our clients to approach them in the same way that they would to consider a full merger.
This is one of the ten most frequently viewed posts in the Worldview Archive, with more than 10,000 visits since it was first published in 2015.
Priorities, Low-Hanging Fruit, and Risks
One of the most intriguing and sometimes most frustrating issues in strategic planning often arises when a law firm's leaders consider the question "What should we work on first?"
Among all of the attractive strategic goals that we have set for ourselves, which ones should receive the most immediate priority in terms of our management attention, resources, and action?
Fire? Flood? Storm? Earthquake? Epidemic? Plague of Locusts?
To help our clients prepare for, and respond to, emergencies better, Walker Clark LLC has studied how law firms respond — or fail to respond — when a disaster strikes.
We have identified four common but usually critical weaknesses in law firm disaster preparedness. These are not the only potential problem areas; but a weakness in any one of these areas poses a very high risk to the continued success — indeed, the continued survival — of a law firm.
When Risk Walks in the Front Door
Some of the biggest business risks in a professional services firm arise at the beginning of the client relationship, but they are often overlooked or not detected at all until a crisis strikes.
Market leaders lead the market.
When a group of law firm partners discusses significant possible changes in their firm, at some point one of them often will say: "But no other firm in our market does this..."
My colleagues and I usually have three responses when we hear this from one of our clients.
The Risks Within
The critical issues in a governance consultation can present themselves in many forms, such as: an outdated partnership agreement; a failure to think about succession until it is almost too late; disputes over compensation and the respective rights of partners; the absence of the flexible but reliable internal structures needed to manage change.
However, they almost all involve a profound need to identify and manage internal business risks, which are usually more dangerous than anything that the external market can throw at the firm.
New Blood for Zombie Law Firms
There is an old saying among law firm managers: "Even the best-managed law firm is only 90 days from bankruptcy."
This is because most law firms traditionally have been woefully under-capitalized. To some extent, some of these firms are already financial zombies. They survive due to good luck, deft financial management, and the persistence of partners — none of which can sustain them indefinitely.
