There has been a lot of talk about the exodus of partners from Dewey and LeBoeuf. As the article states the firm tried to grow by bringing in successful partners with generous pay packages that they have been unable to fulfill. The primary reason for this has been the market and the lack of growth. Most economists now believe that the US economy is going to have a slow recovery and this is going to have an impact on all business. So where will growth come from for Law Firms in the next 5 years.
Already there are a number of firms that are looking at their business model. The “of counsel” position is a recognition that the traditional transition from associate to partner does not work for everyone. “Of counsel” positions are filled by very capable lawyers, but who do not have the entrepreneurial skills to bring in their own business. This way the firm can keep a very good resource that provide capability to the firm. In the consulting business they call may name this position an “essential capability.”
The new economic outlook creates a much more competitive market place. In both Law and Consulting there are now competitors everywhere making it harder for an associate who is in his 30s to build his client network than for the 60 year old partner that build their business in a different climate. I am always amazed at the lack of development that firms offer their associates or consultants to develop the skills to be a entrepreneur and bring in business; it is often seen as a personality trait as opposed to a skill that can be taught and developed.
So what does this have to do with innovation? Isn’t innovation about products? As the market changes, firms need to change and creating an innovative culture will be critical to the future success of the firm. An innovative culture will find better ways to interact with clients, develop the work product, manage finances and even manage their people. The challenge is that both law firms and consulting companies are designed as independent little companies where tradition will stifle anyone with a new idea. However very soon it will be “innovate or die!”