Every month or so there is an article or BLOG about law firm culture. According to Forbes Magazine references to “culture” in leading business publications have leaped from under 500,000 in 2019 to well over two million in 2021.
What I hear from my clients is that the concept of culture is too fuzzy and soft for them. What does culture have to do with PPP, hard financial analysis, tracking successes and failures? At the same time, they want sustained firm growth, top and bottom line, new clients and headcount. To get that you need a firm-wide culture that supports how your strategic growth pathways will be successful.
Let’s work on our definition to see if it helps make sense of culture: According to Harvard Business Review, firm culture is a set of shared values, goals, attitudes and practices that shape how an organization operates:
- The way things are done. Culture is how an organization operates, or “the way we do things around here.” What I hear in firms is this is how it’s always been done.
- The personality of a group: Culture is the personality of a group, similar to how you might describe an individual’s personality. What I find in firms is it is generally the firm leadership, rainmakers and influential partners that are emulated.
- The glue that binds a team: Culture is what binds a team together and informs how work gets done. What are hear from the contrarians is What drives success is success and culture can adapt.
Professor Stephen Mayson, in his book, Law Firm Strategy (Oxford University Press 2007), notes that culture leads to strategy: The Normative strategy describes one or more of the overall purpose, concept, culture and climate of the business. Where the normative strategy is made explicit and the articulation identifies the intended outcome, that articulation may be described as the culture of the firm.
Most firms adopt one or more of the same competitive strategies: markets, clients, services, location, economics and/or competitors. In addition to an analysis of where and how the firm is competing we also want to gain an understanding of what growth pathways the culture is driving. When I do a client’s fully allocated costs analysis, I also allocate gross and net dollars to where the work comes from. At a high level I use these four channels:
- More work from existing clients, industry sectors.
- Work from new clients, industry sectors.
- Addition of new practice areas, and
- Addition of new offices, either organic growth or by acquisition or merger.
All of these strategic growth channels require that the values and corresponding behaviors of your people are in synch with your existing, modified or new strategy. The key growth question is:
What will we do differently or better than our competition to create
greater value for our clients and superior profits for our firm?
For most firms, competitive advantage derives from execution of their plan rather than their choice of options. Successful execution requires the proper identification, development and deployment of people.
It is people (and the culture they foster) that differentiate firms.
You create the greatest competitive differentiation when operational policies are designed to acquire, develop and coordinate the right mix of people for each matter.
The most difficult challenge for firm leadership is the clash, mismatch, or lack of alignment of the normative environment, “the culture”, with the firm’s chosen strategy.
Before you kick off your next strategic planning project, take the time to understand your existing culture. It will either mesh with your ambitions for the future or it will be a struggle to implement.
Bottom line: Culture eats strategy for breakfast – Prof. Peter Drucker, Harvard Business School.
Steve Daitch
Steve is an expert in law firm businesses, and his customized surveys and analysis of Law Firm Culture and Law Firm Values are an incredible value-add in EvolveLaw’s strategy and growth projects.
Click here to learn more about Steve.
To learn more on how we can help you understand your Firm’s culture visit www.evolve-law.com.