- A recent ABA Journal article, More Law Firm Layoffs Are Likely, Consultants Say, makes reference to Reed Smith's 45-lawyer layoff in January, and quotes consultants who project more of the same, citing a 2015 Altman Weil survey in which 65% of the respondents said equity partners weren’t busy enough, and 79% said non-equity partners were insufficiently busy. One consultant, Peter Zeughauser, added that "for the last 18 months, law firms have been laying off lawyers, counseling partners to leave and closing entire offices."
This is consistent with recent reports from Citigroup and others pointing to slowing demand for legal services from traditional law firms. The common expression appearing in all these reports is "overcapacity." The dictionary definition is "excessive capacity for production or services in relation to demand."
If you're among the 65% or 79% mentioned above, the "excessive capacity" in this case is you. There are only two ways for organizations to respond to overcapacity:
- Increase demand
- Decrease capacity
There are exceptions, but generally speaking, law firms aren't very good at increasing demand. Their fortunes tend to rise or fall according to macro-economic trends. Even if marketing was a law firm strength, though, to make up for a 65% or 79% gap between supply and demand, they'd have to be legendarily great at it.
On the other hand, decreasing capacity is easy. All a firm has to do is pass out X number of pink slips and, "Presto!" they've balanced capacity with demand, at least for awhile. It's not surprising that firms are doing just that, and must (not "will," but "must") continue doing it as demand declines, competition intensifies, and firms lose pricing power.
(The reports acknowledge that there are firms outperforming the market. If you're at one of those, good for you. Perhaps it will continue for the remainder of your career, although it doesn't seem like the prudent way to bet.)
Unless your firm suddenly acquires and empowers legendary marketing capability, you can't count on it to create additional institutional demand sufficient to keep you busy enough that you're not vulnerable to being part of the capacity decrease. You're going to have to create demand for yourself, and you'd be wise to begin now.
Actually, you're not really going to create demand for yourself. You're going to identify and tap into logical pockets of existing and future demand for skills like yours.
If you're waiting for your firm to fund marketing/sales training for everyone, you're going to get good at waiting. They can't. There are too many of you, and training that works is expensive. You have two practical choices:
- Learn on your own, pay attention to your attempts and learn from your mistakes, creating experience over time
- Hire someone to teach you an approach that's been proved effective and help you apply that approach to your circumstances. You borrow that coach's experience to shortcut the learning process and increase the number of successes while you learn.
The do-it-yourself approach can work -- if you're willing to put in the time to identify and consume worthwhile content. For example, if you did nothing more than read every one of the roughly 700 posts in this blog’s archive, you'd know more about how to generate business than virtually all the lawyers you compete with. How long would that take? Let’s do the math.
The average reading speed is 300 words per minute. These posts average about 500-700 words, or about two or three minutes reading time per post. Let’s call it three, which would mean 2100 minutes, or 35 hours, to consume the entire (searchable) archive. If you spend an hour each Saturday and each Sunday doing that, by mid-year you’ll be hugely knowledgeable about every aspect of marketing and selling. If during that same span you spend another half-hour each weekday applying what you learned, by mid-year you’ll be very good at doing it.
If you decide you’d rather have help with this, whether the training/coaching cost will be paid by your firm or you, you shouldn’t see it as Option 1 “or” Option 2, but as Option 1 “and” Option 2, where the coaching help is in addition to self-learning.
Visualize this process as a funnel with three segments, such as shown below:
- Education: Raise awareness, understanding; enable recognition of deficiency
- Training: Skill acquisition; learn by doing (just as athletes or musicians train by practicing)
- Coaching: Human guidance to apply what you learned otherwise
In the Internet era, education is free. There is no shortage of published material available to anyone who wants to learn. Training can be free, too. It's called trial-and-error. It's inefficient, but it works. Simply go out and make an attempt to use what you learned instead of sticking with old habits. Or, training can be at modest cost, using simulation technology to accelerate the trial-and-error virtually, at zero risk.
Coaching should be reserved for help applying -- to specific situations -- new principles and approaches to strategic decisions and to tactical opportunities. Too many lawyers waste too much of their firms’ or their own money paying coaches to fulfill the first part of the learning mission, i.e., teaching them what they can learn on their own.
Whether you choose the DIY approach or decide to hire a coach, get started now. The macro forces that cause law firm leaders to “right-size” their firms periodically aren’t going away, and it’ll always come down to, “Are you busy enough?”
Have you ever used a coach? If not, or if your previous experience with one was unsatisfying or left you skeptical about their value, schedule a complimentary 30-minute call with me to get concrete, practical advice about how to progress with a real opportunity or challenge you face now.