Interesting post today in the More Partner Income blog. Bottom line: if you're running a law firm, you don't really need a strategy when things are going well. True. A rising tide sure does lift all boats. And, emotionally, everyone's kind of invested in acting as if the tide will rise forever. It's much easier to believe that you're getting a lot of business because you're a genius, rather than because you're lucky.
The need for a strategy becomes painfully clear when the tide begins to ebb. At that point, you begin to encounter pricing pressures, real competition from firms that previously were content simply to feed from the other end of the same big trough, and so on. At that point, it's a little late to start evaluating your options. Even if you develop a strategy, you're going to have a very hard time implementing it. The tide that so effortlessly lifted you may now be heading down the drain.
One of the baseline tools for developing a strategy is the SWOT analysis. SWOT stands for "Strengths, Weaknesses, Opportunities and Threats" and precisely 50% of your work in this matrix is devoted to Bad Things That Might Happen. The very first thing any strategist worth his expense account thinks about is where the landmines are, and what might set them off.
Yet, in a lot of environments, people absolutely hate to think about this stuff. I read a piece yesterday in Salon that illustrates this perfectly. It was the autobiographical story of a guy who borrowed a lot of money to buy a typesetting company. In 2000. The piece was largely about the impact of outsourcing, which is what rapidly killed his business. But as I read it, I couldn't help but wonder why on earth someone who had a strategy would borrow millions of dollars to compete in a market where, basically, he was obviously soon going to be unable to compete.
Strategy is all about what's going to happen, not what's happening at the moment. Law firms need to remember this.