From the macro to the micro, from strategic direction to execution details, law firms face challenges. Several news items and blog posts last week take us through these pressing legal market questions. 

The Strategic Overview. Bruce McEwen in A law firm taxonomy: Introduction (21 May 2013) offers an intriguing framework to think about how to classify law firms by strategic and market position:

  • Truly global players spanning three or more continents
  • Capital-markets-centric specialty firms headquartered in a global financial center—often historically tethered to a major I-bank
  • Corporate-centric firms headquartered in non-global cities catering to sophisticated upper/-middle market, mostly non-financial services
  • “Category killer” specialists targeting one broad but not necessarily high-intrinsic-value practice
  • Traditional boutiques
  • “The Hollow Middle:” One-size-fits-all, not a special destination, generic law firms
  • Emerging “synergistic super-boutiques”

You can quibble with the taxonomy but the key point is that law firms compete in different segments. Firms need leaders who can identify the right segment, develop a strategy for it, and then lead execution of that strategy. Whether firms and their leaders can do so remains doubtful…

The Gap between Market Changes and Responses. A May 21st AmLawDaily blog post Survey: Firm Leaders Admit Downturn’s Permanent Impact reports on Altman Weil’s survey, Law Firms in Transition 2013: An Altman Weil Flash Survey. The survey finds a big gap between law firm’s belief about the future of the market and actions they are taking to respond to those changes. For example, 80% see a shift to fixed fee pricing but only 29% have made significant changes in their pricing; 96% see the new importance of practice efficiency but only 45% have taken steps to improve efficiency.

If firms are not grappling with known problems, I don’t see how they can address the bigger strategic questions that MacEwen’s post implicitly raise. Perhaps the fundamental challenge of leading law firms explains the gap between recognizing problems and taking actions to solve them.

The Gap between Leading and Following. Two blog posts over the long weekend suggest that law firm partners often reject attempts at leading and managing. Patrick McKenna writes today at Slaw Do You Know What It Takes to Be a Firm Leader?, lists 30 challenges new law firm leaders face. Pam Woldow writes in her blog today Loneliness at the Top: Managing Partners’ Scary Balancing Act that managing partners face a tough challenge giving up law practice to manage because returning to practice is hard. I believe these challenges have existed for decades; today, however, the failure to resolve them has more dire consequences.

The Gap between Expected and Actual Skills. Turning from the macro to micro…. gaps exist even in the day-to-day of how lawyers work. D. Casey Flaherty, in-house counsel at Kia Motors, pointed that out last week at his Legal Tech West Coast keynote speech, covered in Big Law Whipped for Poor Tech Training: At LegalTech, Kia Motors’ Casey Flaherty chastises firms for poor tech competency. (Legal Tech News, 22 May 2013). Flaherty

“recently launched his technology audit program, where firms bidding for Kia’s business must bring a top associate for a live test of their skills using basic, generic business tech tools such as Microsoft Word and Excel, for simple, rudimentary tasks. So far, the track record is zero. Nine firms have taken the test, and all failed. One firm flunked twice.”

As best as I can tell, he tests for fairly basic proficiency in the most widely used software.

In a Twitter conversation about Flaherty’s article, I asked “do we need a reference model for core lawyer competency skills beyond research + writing?” Picking up on both the Altman Weill survey and my question, Larry Bridgesmith writes in Coloring Between the Lines: No Way to Resolve Crisis (May 25th in the ERM Legal Solutions blog) that “[m]any more skills and needed competencies can be articulated and developed for lawyers and law firm leaders.”

Closing the Gaps. The articles and blog posts over the last week point out major gaps in large law firm performance. Bridgesmith concludes that “if we don’t stop worshiping the status quo, there will be no growth, only decline.” I agree.

I see two ways to close the gap of responses and the gap of leadership. One is that a few firms will figure it out; they will do very well indeed. The other is to allow outside ownership.

To close the technology skills gap, firm leadership must first recognize the gap exists. More clients like Flaherty would certainly accelerate recognition. The superficial answer to closing the tech skill gap is easy: more training. The real – and much harder – question, is how will firms motivate lawyers to obtain that training. The floor is open for suggestions.