Reprinted with permission from Legal Management magazine, Volume 33, Issue 9, published by the Association of Legal Administrators, www.alanet.org.
From Lemons to Lemonade: Lessons from the Great Recession | Legal Management
LI
9/15/14, 7:55 PM
LEGAL INDUSTRY/BUSINESS MANAGEMENT
From Lemons to Lemonade: Lessons from the
Great Recession
Learn how some firms persevered and triumphed, even in the worst of times
The economic downturn affected all industries differently. The legal profession experienced reductions in force, budget cuts and
a general worried feeling as clients pulled back on spending and deals. Yet, despite the setbacks in business, the crumbling
economy, and the fear that accompanied the unpredictable future for the business of law, some firms were still able to
persevere. The firms that did responded to their difficult circumstances by creating new opportunities through expansion,
reinvention and collaboration.
While the economy continues to recover from the Great Recession, there are many lessons that can be
learned and opportunities to be had by those who know where to look. Continue reading to see how
your fellow law firm leaders were able to take advantage of an unfortunate time period for the legal
industry and turn lemons into lemonade.
PAULA TSURUTANI
Marketing Communications Writer
FINDING OPPORTUNITIES FOR EXPANSION AND GROWTH
Like most firms during the economic downturn, Ogletree, Deakins, Nash, Smoak & Stewart, P.C.
immediately began to watch expenses. But their first goal, according to Chief Administrative Officer
Sharon Wardrip, was to “hold on to our talent. We wanted to avoid layoffs,” she says. And they did.
“The difficult economy
allowed us to network with
partners from other firms to
combine talent and take
advantage of strategic
opportunities.”
SHARON WARDRIP
Chief Administrative
Officer, Ogletree,
Deakins, Nash, Smoak
& Stewart, P.C.
“As it ended up, we did not layoff any attorneys. In fact, we grew during the downturn. And the
growth prompted the firm to become more strategic and disciplined in our administrative practices.”
In a four-year period, from 2009 to 2013, Ogletree added 10 new offices, gaining approximately 250
attorneys in the process. “The difficult economy allowed us to network with partners from other firms
to combine talent and take advantage of strategic opportunities,” Wardrip says. While such rapid
growth could have been daunting and challenging, the effect at Ogletree was largely positive. “Our
growth actually gave people a lift,” Wardrip says. “It became a morale booster.”
K&L Gates LLP was another firm that grew significantly. “In 2007, we had a merger, and since then,
have grown through combination — globally, in the Middle East, Asia and Australia,” says K&L Gates
Chief Marketing Officer Jeffrey Berardi. The firm grew from 20 offices in 2007 to 48 offices in 2014 —
with an emphasis in the growth of our international offices. “Instead of downsizing, the firm took the
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From Lemons to Lemonade: Lessons from the Great Recession | Legal Management
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opposite approach — being driven by clients with a global reach. It was an example that speaks to the
consolidation of law firms. The downturn created great opportunities to grow and provided a chance
to do more soul searching about what the firm wanted to do long-term.”
“Attorneys needed to
become true business
advisers, thoroughly
knowledgeable about the
client’s industry, pending
legislation, current trends,
tax issues.”
MONICE
KACZOROWSKI
Chief Knowledge
Officer at Neal,
Gerber &Eisenberg
NAVIGATING NEW TERRITORY
Opening new markets and becoming a global firm through growth also presented challenges. “We
became more aware that we needed to reinforce and package our training so attorneys who were
joining us laterally could become part of the Ogletree community quickly,” Wardrip says. The firm
implemented just-in-time training and ramped up its onboarding program so new attorneys could
more swiftly integrate, transition and become productive. According to Wardrip, the process was
“very hands-on and personalized, almost like a concierge service,” with legacy attorneys reaching out
and serving as ambassadors to lateral attorneys so they would have a friendly, internal lifeline who
could share information about firm resources, processes and day-to-day matters.
The expansion of offices also improved diversity hiring and retention efforts at Ogletree, creating a
positive buzz and prompting the formation of a professional development and inclusion group, which
led to a more formalized associate development program and more sophisticated recruitment and
retention processes.
LLP
It has taken time, special effort and flexibility to keep K&L Gates’ global marketing team informed
and connected. Berardi’s department is organized regionally around the globe — in the Americas,
Europe/Middle East, Asia Pacific, including Australia, plus firm-wide practice support. Initially, when
the firm began its global expansion, it was somewhat cautious and a bit restrictive about its branding
because it wanted to carefully control its identity. Now, says Berardi, “We have struck a better balance
and are much more flexible. Over time, we have developed a consistent brand that allows for
differences based on geography and cultural differences, and our regional directors work in a
decentralized way. We’ve learned that the firm needs to convey its brand and initiatives in a culturally
appropriate way.”
GETTING SMARTER ABOUT INTELLIGENCE
Monice Kaczorowski, Chief Knowledge Officer at Neal, Gerber & Eisenberg LLP, comments that the
downturn triggered intense competition among law firms, which led to an increase in requests for
high-level market research. “It was at an all-time high, a real buyer’s market. Requests have doubled
in recent years. People who never asked for reports are calling us.”
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Her department shifted its focus, delivering information with a greater emphasis on actionable,
targeted intelligence. Lawyers found that it “was no longer enough to provide legal services,”
Kaczorowski says. “Attorneys needed to become true business advisers, thoroughly knowledgeable
about the client’s industry, pending legislation, current trends, tax issues.” Kaczorowski says the
demand for more strategic intelligence bolstered her group’s relationship with the firm’s finance and
marketing departments to provide more comprehensive information. This new set of expectations
significantly broadened the scope of intelligence gathering. “Attorneys want an up-to-date SWOT
[strengths, weaknesses, opportunities and threats] report.” To provide the best intelligence,
Kaczorowski continually vets new products and research tools and has seen her department budget
increasing.
Kaczorowski’s department has morphed, becoming more involved in client interviews and partnering
more closely with multiple departments — especially marketing and business development — so the
firm can more efficiently target new client prospects, tap into client relationship management (CRM)
systems and know who is pitching new business. Overall, the expansion of competitive intelligence
within the firm has helped the firm to become more strategic in its marketing efforts. Attorneys more
readily recognize the value of research and competitive intelligence, and how these areas can make
their business efforts more efficient and productive.
“Any time you have
change, you have
opportunities for big
innovations.”
SHIFTING FROM MARKETING TO BUSINESS DEVELOPMENT
To keep pace with rapid growth, Berardi says, “Marketing needed to respond quickly and concisely
about our identity to clients, further develop cross-marketing efforts and strengthen current client
relationships.” With such a large firm, this was — and still is — a big challenge. While K&L Gates
always had a business development function in place, Berardi says the firm shifted its attention from
marketing and branding to business development, focusing on requests for proposals (RFPs) and
ANN RAINHART
Chief Talent Officer,
Faegre Baker Daniels
LLP
expansion of business. “We took on a more strategic, analytical role,” he says.
More robust marketing training for associates and partners was also incorporated into K&L Gates’
client development strategy. “The [marketing] department works with lawyers to help identify the
value proposition,” Berardi says. “Our marketing team can help connect the dots, but the attorneys
are the ones on the frontlines and want to drive the marketing effort. They want to know how to do
it themselves — and they are expected to be more entrepreneurial in getting business.”
OPPORTUNITIES ABOUND
“Any time you have change, you have opportunities for big innovations,” said Ann Rainhart, Chief
Talent Officer at Faegre Baker Daniels LLP. The economic downturn and the firm’s combination with
another firm presented an opportunity “to take a long look at our processes, operations and systems.
We had a chance to take a big — and new — look at hiring, and develop new career models for
attorneys, administrative assistants and paralegals.”
For firms like Faegre Baker Daniels LLP, the Great Recession provided an opportunity to get creative
and in some cases, start from scratch. Below are some examples:
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Opportunities to redefine and reaffirm firm values
The combination of firms led to one of the biggest and best benefits, according to Rainhart: the
creation of a core group of five operations executives in the firm who were asked to come together to
manage the integration. Sitting at the table were heads of key departments (IT, Business
Development, Talent, Strategy and Finance). Together, they made a decision to develop an operations
roadmap that allowed them to plan and monitor integration efforts. This collaboration demonstrated
the power of a shared vision, involving different perspectives, united to create a better firm.
In September 2013 Lewis & Roca combined with Rothgerber Johnson & Lyons, to form Lewis Roca
Rothgerber LLP. Even before inking a deal, communication to both partnerships was extensive. By the
time both firms were ready sign on the dotted line, says Ken Van Winkle, Managing Partner of Lewis
Roca Rothgerber, “Eighty percent of the partners had had some kind of involvement. We worked hard
to get buy-in, doing roadshows to the offices and listening to concerns.”
Van Winkle reports that no one has left the firm because of the merger, and the increase in crossmarketing efforts, plus the expansion into different jurisdiction has been a positive trend. The firm has
gone through a self-assessment process to determine what kind of law firm it should be in the new
economy and how it needed to differentiate itself. Van Winkle says they created a plan that discussed
what it means to be a lawyer.
“The downturn created
great opportunities to grow
and provided a great
chance to do more soul
searching about what the
firm wanted to do long
term.”
Opportunities to reinvent
While some firms expanded through merger and combination, others decided to strike out on their
own to create not only a different firm, but a different law firm model. Marc Taylor, a Founding
Member of Taylor English Duma LLP, says that when he and several others left their midsize firm, they
were “driven to start a new firm that focused on client value. It was a chance to build a new model
from scratch — with no legacy expenses.”
The firm opened its office in an Atlanta suburb with low overhead, lower cost operations and an
emphasis on technology. Focusing on commoditized work, the attorneys recruited talent from top
Atlanta firms who could bring in clients seeking high-quality legal services without the high costs
JEFFREY BERARDI
Chief Marketing
Officer, K&L Gates LLP
usually charged by big law firms. Resisting the urge to become a big firm, Taylor says they are working
to create a model that will change the way high-quality work is delivered — emphasizing efficiency
and budget certainty.
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Opportunities to demonstrate leadership
Tough times provide ample opportunities to demonstrate leadership. Those elusive skills are crucial in
forging change and charting new directions. What qualities are needed? “When tough times hit, a
leader needs to make sure the mission and vision are sound and that there’s a reason to exist,” says
Tom Grella, a Member and Immediate Past Chair of the Executive Committee of McGuire, Wood &
Bissette, P.A. in Asheville, North Carolina. “At the same [time], you need to look at your strategy and
ask key questions: What forces will cause us to change? What areas do we need to focus on? Do some
of us need to shift the focus of our practice?”
When the economy took a nosedive, Grella says his firm asked everyone to sacrifice. “We told staff —
we may not be able to make payroll, but reduction of headcount is a last resort.” Grella met with staff
to answer questions and respond to concerns. Communication, even over-communication, was
important so everyone was informed, didn’t jump to conclusions and had a shared role in helping the
firm.
“What often appears — or
is perceived — to be a
crisis, can turn into an
opportunity.”
THE MOST IMPORTANT LESSON
In good times, leaders tend to get more flak. But when times are bad, employees want leadership
from the top, Grella says. “They are looking for direction,” and their opinions tend to shift with the
times. To stay nimble in a rapidly changing profession, Grella’s firm adopted a new strategic-planning
process that is proactive, not reactive. Attorneys work on the plan on a continual basis and as a team.
It’s built to be flexible, taking into consideration general economic trends as well as emerging trends
TOM GRELLA
Member and
Immediate Past Chair,
McGuire, Wood &
Bissette, P.A.
in the legal profession.
Whether the legal industry is facing an economic downturn, sudden loss of business or abrupt
departure of top rainmakers, the willingness to stay open-minded, flexible and willing to change is
one of the most important lessons in navigating rough waters. “What often appears — or is perceived
— to be a crisis, can turn into an opportunity,” Grella says. It’s an opportunity to make lemonade.
ABOUT THE AUTHOR
Paula Tsurutani is a marketing communications writer, focusing on issues in professional service firms,
association and arts organizations.
Email
Website
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Learn&More&from&Industry&Leaders&
!
Resources&on&Leadership&Development&and&Strategic&Planning&
!
•
Evolutionary,Road:,A,Strategic,Guide,to,Your,Law,Firm’s,Future!(2013):!This!e.book,!written!by!
Canadian!legal!management!analyst,!futurist!and!consultant!Jordan!Furlong,!“envisions!and!
details!an!evolutionary!timeline!consisting!of!five!distinct!stages!of!development!for!the!legal!
profession.”!!
•
Strategic,Legal,Leadership,blog!(tomgrella.com):!Tom!Grella!has!served!as!firm!managing!
partner!of!his!Asheville,!North!Carolina!firm!and!Chair!of!the!ABA’s!Law!Practice!Division.!His!blog!
provides!insight!and!practice!advice!to!enhance!firm!leadership,!management!and!the!client!
experience.!!
•
Lessons,in,Leadership:,Essential,Skills,for,Lawyers!(2014):!Tom!Grella!draws!from!his!own!
experience!as!a!law!firm!leader!to!help!young!and!veteran!lawyers!develop!leadership!skills.!!
•
The,Emergence,of,NontraditionalDTrack,Lawyer,Career,Paths:,A,Resource,Guide,for,Law,Firms,
and,Law,Schools!(2014).!The!National!Association!for!Law!Placement!(NALP)!created!a!New!
Career!Models!Task!Force!in!2012!to!research!the!growth!of!nontraditional!career!opportunities!
for!lawyers.!This!Resource!Guide,!the!result!of!their!work,!provides!detailed!information!that!can!
help!firms!make!informed!decisions!about!nontraditional.track!programs.!!
•
The,Lawyer's,Guide,to,Strategic,Planning:,Defining,,Setting,,and,Achieving,Your,Firm's,Goals!
(2004)!by!Tom!Grella!and!Michael!L.!Hudkins:!This!book!provides!guidance!for!putting!together!a!
strategic!plan!for!a!small!or!midsize!law!firm.!Included!are!chapters!on!developing!a!mission!
statement,!vision!statement,!drafting!long.range!goals,!understanding!different!forms!of!
governance!and!developing!tactics!to!make!the!strategic!plan!work!effectively.!!
•
Watch!the!work!of!the!ABA&Law&Practice&Division&Task&Force&on&Evolving&Business&Model&for&
Law&Firms,!which!will!make!recommendations!to!help!guide!lawyers,!firms!and!bar!associations!
through!the!changing!practice!environment.!!