Page 38 - MASTER COPY LEADERS BOOK 9editedJKK (24)_Neat
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Leaders in Legal Business
Law Firm Business Strategies Timothy B. Corcoran 1
Corcoran Consulting Group, LLC
Principal
Every successful business must periodically review and adjust its service offerings in light of changing
market dynamics. New entrants pose threats to entrenched players; emerging technology automates at a low cost
what was once a lucrative manual undertaking; and leaders must engage in continuous game theory, acting and
reacting to changing circumstances and competitors’ moves. In the global legal marketplace, rapid changes have
increased the pressure on law firms and law departments alike to examine what and how they deliver legal services
to clients, and leaders of these organizations must step up their game.
Redefining Strategy
In prior years, with near unlimited demand for legal services, legal services strategy required less rigor to
identify new markets and new offerings. For law firm leaders, strategy was more closely aligned with branding
and positioning — what do we want to look like in the future — with the expectation that whatever we choose to
be, we will be. For law department leaders, strategy often followed the cadence of corporate strategy:
decentralizing and aligning in-house counsel with business units one year; centralizing and consolidating legal
services the next; but always with an eye on slowing the growth of overall legal services spending. As a result,
the strategic planning process carried with it an unstated perspective: “We’re here to stay, for what we offer will
always be necessary.” The growth plans that resulted were quite often
tactical in nature.
For law firm leaders, there was little need to engage in an
organized process of internal advocacy, aligning the firm’s capital
investments toward the practices, markets, and resources that generated
the best return, for all practices generated increasing revenue year after
year. Indeed, many firms have only recently begun to calculate
contribution margin, so it was often impossible or highly impractical to
measure performance in any way other than top line revenue growth.
Strategy plans, therefore, focused primarily on tactics to raise the firm’s visibility in target markets, employing
vague financial metrics to measure performance and minimal accountability for the partners expected to deliver
results. After all, so long as aggregate revenues exceeded aggregate costs by a comfortable and increasing margin
each year, the details of how firms reached their targets were less critical.
Tactics also ruled the day for many in-house law departments, as there was a prevailing expectation that
legal services are, and always will be, a cost center rather than a profit center. As a service organization to its
internal corporate clients, the law department’s reactive posture to whatever new strategy the corporate executives
dreamed up left its leaders in a perpetual state of keeping up — hardly the best position from which to proactively
organize and reexamine the role of the legal function.
The global economic recession that began in 2008 demonstrated beyond a shadow of doubt that legal
services organizations are subject to the same economic realities of other businesses, and with declining demand
— or, in the face of emerging substitutes and alternatives for the provision of legal services, at least declining
demand for the old ways and old prices — law firms and law department leaders have finally recognized that
1 Timothy B. Corcoran is the principal of Corcoran Consulting Group, LLC and served as the 2014 president of the international Legal Marketing
Association. A former CEO, he specializes in helping law firm and law department leaders adapt and profit during a time of great change. He authors
Corcoran’s Business of Law blog and can be reached at +1.609.557.7311 and tim@corcoranconsultinggroup.com.
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Law Firm Business Strategies Timothy B. Corcoran 1
Corcoran Consulting Group, LLC
Principal
Every successful business must periodically review and adjust its service offerings in light of changing
market dynamics. New entrants pose threats to entrenched players; emerging technology automates at a low cost
what was once a lucrative manual undertaking; and leaders must engage in continuous game theory, acting and
reacting to changing circumstances and competitors’ moves. In the global legal marketplace, rapid changes have
increased the pressure on law firms and law departments alike to examine what and how they deliver legal services
to clients, and leaders of these organizations must step up their game.
Redefining Strategy
In prior years, with near unlimited demand for legal services, legal services strategy required less rigor to
identify new markets and new offerings. For law firm leaders, strategy was more closely aligned with branding
and positioning — what do we want to look like in the future — with the expectation that whatever we choose to
be, we will be. For law department leaders, strategy often followed the cadence of corporate strategy:
decentralizing and aligning in-house counsel with business units one year; centralizing and consolidating legal
services the next; but always with an eye on slowing the growth of overall legal services spending. As a result,
the strategic planning process carried with it an unstated perspective: “We’re here to stay, for what we offer will
always be necessary.” The growth plans that resulted were quite often
tactical in nature.
For law firm leaders, there was little need to engage in an
organized process of internal advocacy, aligning the firm’s capital
investments toward the practices, markets, and resources that generated
the best return, for all practices generated increasing revenue year after
year. Indeed, many firms have only recently begun to calculate
contribution margin, so it was often impossible or highly impractical to
measure performance in any way other than top line revenue growth.
Strategy plans, therefore, focused primarily on tactics to raise the firm’s visibility in target markets, employing
vague financial metrics to measure performance and minimal accountability for the partners expected to deliver
results. After all, so long as aggregate revenues exceeded aggregate costs by a comfortable and increasing margin
each year, the details of how firms reached their targets were less critical.
Tactics also ruled the day for many in-house law departments, as there was a prevailing expectation that
legal services are, and always will be, a cost center rather than a profit center. As a service organization to its
internal corporate clients, the law department’s reactive posture to whatever new strategy the corporate executives
dreamed up left its leaders in a perpetual state of keeping up — hardly the best position from which to proactively
organize and reexamine the role of the legal function.
The global economic recession that began in 2008 demonstrated beyond a shadow of doubt that legal
services organizations are subject to the same economic realities of other businesses, and with declining demand
— or, in the face of emerging substitutes and alternatives for the provision of legal services, at least declining
demand for the old ways and old prices — law firms and law department leaders have finally recognized that
1 Timothy B. Corcoran is the principal of Corcoran Consulting Group, LLC and served as the 2014 president of the international Legal Marketing
Association. A former CEO, he specializes in helping law firm and law department leaders adapt and profit during a time of great change. He authors
Corcoran’s Business of Law blog and can be reached at +1.609.557.7311 and tim@corcoranconsultinggroup.com.
31
