The erratic attempts at policy coming from the Trump government in the United States have made commercial and financial prospects more unpredictable than perhaps in any period since the 1930s. Many investors and business people, as well as traditionally friendly governments, now wonder -- often with good reason -- whether the United States can be trusted to honor its international commitments at any level of enterprise or international engagement.
These forces and risks ultimately affect almost every law firm with any significant international or regional practice. This is a real challenge for the legal profession, because clients traditionally have looked to lawyers and law firms for analysis and problem solving in uncertain times. Yet the business futures of many of those firms are perhaps even less certain than those of their clients.
Here are four disquieting thoughts to help make sense about what appears to be increasing chaos. They don't provide the answers to the issues that are confronting the future of your law firm, but they can help you to ask the right questions.,
"Who could have predicted...?" is no longer a valid excuse.
A critically important skill in strategic thinking for lawyers and law firms is the ability to tame "uncertainty" by reducing it to a set of reasonably understandable, quantifiable risks.
The information needed to do this is available, if we are diligent in looking for it and disciplined in analyzing it.
Forget about traditional strategic planning with its lofty-sounding vision statements and SWOT analyses. Focus instead on strategic risk management.
Multiple, seemingly contradictory, visions of the future are part of a new reality.
The law firms that are already successful in navigating through uncertain waters are the ones that have developed multiple scenarios for their most probable futures and plans to address each one if it arises -- or, more disturbing, if more than one of them arise at the same time. They also have identified the less probable scenarios that nonetheless can have potentially destructive -- not just merely disruptive -- consequences.
"Both can be true" is a frequently-heard phrase in these firms; and their lawyers and managers are learning how to accept and deal with ambiguity, and even use it to their advantage.
Past success is no guarantee of survival...
The business world is littered with the remains of businesses -- including law firms -- that believed that they could continue moving along more or less in the same way as they did in the past. Experience can be a useful guide, but it can become highly unreliable in the unknown territory into which most law firms in most legal markets are now moving, usually without many of the familiar reference points upon which they relied in the past.
... and neither is size.
Service delivery capabilities will be more important in the 2020s than the number of lawyers or number of offices that a law firm has scattered around the world.
At Walker Clark, we have never agreed with the assumption that "Big Law" is inevitably destined to rule the legal services world. In fact, with the opportunities and challenges of "1-to-400 leverage," facilitated by artificial intelligence and other forms of advanced technology, smaller law firms -- the "incredible shrinking law firms" that we foresee as coming to the fore by the mid-2020s -- might have considerable practical advantages, being able to compete against even the global giants at a level of profitability that might be difficult, if not impossible, for some of the giant law firms to match.
In this regard, we believe that younger firms in the Asia-Pacific region, Africa, and Latin America -- regardless of size -- might have special advantages, because they are not as invested in the old, traditional paradigms that have governed the business of law in North America and much of Europe.
Your future should not be a do-it-yourself project.
There are real dangers in trying to do so. There is a natural tendency to deny or try to explain away the troubling implications of the future of the legal profession, in which lawyers have invested so much of their spirit, energy, and resources. Old assumptions and intellectual habits, which seemed to work well in the past, can lead a group of partners down the wrong path, and deeper into the darkness rather than out of it.
Even if you have a knowledgeable, strategically sophisticated team, these issues are too big and too important to resolve by yourselves. Disquieting concepts, such as the four listed previously in this article, need an external perspective, someone who can:
- Present new information on which to base reliable decisions.
- Introduce new ideas from outside the firm and show the firm's leaders how to build on them.
- Challenge the assumptions and paradigms that block an understanding of the new realities, challenges, and opportunities.
- Help the law firm to see new opportunities within what, at first glance, might be viewed simply as problems.
- Confront denial and challenge partners' thinking to produce realistic business priorities.
- Facilitate planning to respond to change in the legal market with geniune innovations that fit the distinct characteristics and culture of the firm.
The next time you believe that the fast-moving uncertainties of the legal markets today are too great to manage, think about the four points in this article. Discuss them with your partners. Regardless of your firm's size, you can manage the future's risks and capture its opportunities with greater confidence and better sustainable results.
We can guide you along that journey.
Click here to learn more about how Walker Clark can help your law firm make sense of the chaos; or contact us by e-mail to schedule a complementary preliminary telephone consultation with a senior Walker Clark strategic advisor.