In any informal conversation with law firm partners, their future plans always come up. They often express an ambition for improvement and stronger market positioning in the coming years—but few have clarity on how to achieve it. Turning that ambition into results depends largely on the firm’s strategy, which in the legal industry has very specific characteristics. The ultimate goal should be a strategic plan that allows partners to answer the question “What’s the plan?” immediately and with confidence.
Strategy is the set of decisions a firm adopts to achieve its objectives. Law firms, as professional service organizations, must recognize that they differ greatly from traditional companies: they are human-capital-intensive, not financial-capital-intensive. This distinction shapes every aspect of strategic definition.
One of the most delicate elements is corporate strategy. In their pursuit of growth, many firms adopt practices that later complicate strategic coherence. Defining precisely which practice areas the firm will offer—and what synergies exist between them—is far more critical than it may appear. Every lateral integration or partner promotion should start with one central question: What synergies does this generate for the firm?
Once this is clear, each practice group must develop its own competitive strategy to outperform its peers.
Firms pursuing accelerated growth require a completely different strategy from those seeking to maintain or protect their current market position. A firm that focuses solely on operational efficiency is, at best, executing an old strategy that once worked—but cannot expect to achieve a different level of positioning.
The challenge lies in ensuring that strategic execution coexists with improved operational efficiency—doing more with the same resources, or the same with fewer—and consequently becoming more competitive in partner profitability and associate compensation.
Once a firm defines its long-term strategy, it must test its feasibility and confront reality. In other words, is the projected strategy viable? To answer that, the firm must consider:
a. Do we have the right team of partners and associates?
A strategy cannot succeed without the right professionals. If it were otherwise, firms could simply copy the most profitable firm’s service portfolio. But without the right people—by expertise, experience, and reputation—the plan fails. The decision pattern is also critical: should the firm build capabilities internally, make lateral hires, or merge with another firm?
b. Where on the service spectrum do we want to position ourselves?
The firm must know exactly where its offering lies. An overly diversified portfolio—from basic to highly complex work—requires different capabilities that are often impossible to manage, which explains why team spin-offs frequently occur.
c. What services does the market actually demand?
This is the time to align with economic reality. Which markets are growing? How much business volume exists in each industry? Are the firm’s services critical to that sector’s development?
d. Who are our target clients?
Finally, partner relationships are the decisive factor for success. Do we have access to the market? How strong are our networks in the industries we target?
These are just some of the questions firms must address when defining strategy. Others include operational, business development, reputation management, IT, and communication strategies. Ultimately, the foundation of a good strategy lies in adaptability—understanding that success comes from managing uncertainty and knowing that the plan should never be set in stone.
Antonio Gómez Montoya – Partner at Black Swan Consulting