An important article published recently by the Wharton School, University of Pennsylvania, reminds us that resilience has become a critical strategic asset, which enables businesses to respond successfully to rapid changes in their markets. In Process Resilience Is Becoming a Business Imperative, experts from the University of Pennsylvania, University of Florida, and Wipro Ltd. discuss how In an increasingly networked world, organizations need to move beyond the kind of corporate disaster-recovery efforts that followed the earthquake, tsunami, and nuclear incidents in Japan in 2011. To remain competitive, organizations also must become resilient to internal as well as external disruptions. Process resilience, in particular, is very important for industries which are either highly regulated, Internet facing, or serve end-user customers.
All three of these indicators describe law firms in the 21st century.
How resilient is your law firm?
The experience and observations of Walker Clark LLC, while advising law firms of all sizes worldwide, strongly suggest that:
- Resilience requires, first of all, a willingness to anticipate changes and the risks that they could produce. The old excuse "Nobody could have foreseen that..." seldom withstands honest scrutiny. The reallity is that most of the major changes in legal markets, client expectations, and law firm economics in the past 10 years -- even the Global Financial Crisis that started in 2008 -- were easily identifiable in advance. Moreover, the law firms that have navigated significant market disruptions well are ones that anticipated them and were prepared to meet them.
- Resilience also requires planning. One of the most profitable exercises that a law firm partnership can undertake at a partners meeting is to spend an hour in "what if" scenario-based planning. This requires the willingness to "think about the unthinkable." It also requires a risk-management mentality that allows partners to understand the value of spending time discussing plans that everyone hopes will be unnecessary.
For example, as part of the Walker Clark Comprehensive Managment Systems Review, we not only help law firms to evaluate their existing management structures, policies, and processes, but also to test their internal resilience to change. Our risk management services to law firms also strongly emphasize the importance of strategic anticipation and contingency planning.
Being prepared to meet today's business and professional challenges is hard enough, but it is not enough. Past success can be a good resource, but it guarantees nothing for the future. It is your firm's internal resilience that will be a key factor in determining your long-term success and sustainable profitability in business environments that are typified by ever-accelerating change.