Growth is Dead: Now What?
Growth is Dead: Now What? is written by Bruce MacEwen, a lawyer and President of Adam Smith Esq., an online publication providing insights on the business of law. The core focus of this book is the changes in the legal industry brought about by the 2008 downturn. MacEwen defines 6 core challenges affecting the sector:
- Pricing pressures
- Excess capacity
- Proliferation of career tracks
- Partner expectations
- Lateral partner mobility
- Critical role of truly strategic thinking
Ultimately these issues boil down to the fact that the market has changed substantially. Previously lawyers were in the driving seat, and with hourly billing there was little need to be efficient. But the market now finds itself in a position of low growth. The client is in the driving seat and they are are expecting more for less!
MacEwen does a good job in exploring each of the challenges, backing up findings with hard data from the likes of Hildebrant. There’s some very interesting statistics and charts on topics such as realisation rates and growth.
Whilst the first half of the book explores the issues, the second half provides potential answers and approaches to address the challenges. The vast majority of the ideas focus on taking a more corporate view and approach to running a law firm. This requires significant cultural shift, much of which MacEwen points out is counter to the characteristics of a lawyer!
We’ve seen some of our legal sector clients undertaking the suggestions made in the book, and we recognise certain industry trends. For example, specialisation of law firms.
Favourite quotes from the book
“We are collecting, industry-wide, less than 85 cents on the dollar. Imagine another industry that (de facto) gave its average customer a 15% discount day in and day out.”
“Good clients do not want trusted law firms to lose money. They really don’t. They want you round for the long run”
“Lawyer jobs are increasingly being lost to technology”
” We have systematically increased our reliance on the most expensive, least productive cohort of our lawyers.”
“Many (most?) of your partners have never experienced a seriously down year – or even a year when their compensation growth didn’t trounce the inflation rate.”
“Add to that, that most lawyers don’t understand business, including their own firm’s business, and aren’t honestly curious about it”
“We have not fundamentally changed how we do things”
“Pricing pressure is here to stay,”
“Clients have exhibited a strong and lasting preference for firms that promise to do one thing very well and don’t pretend to do anything else.”
Essential reading for any law firm leader. I also highly recommend it to Legal IT Leaders as technology will undoubtedly provide solutions to the core issues identified by MacEwen. The book is only 120 pages long so can be read in one or two sittings. Read it, or be left behind by the competition!
Buy a copy of the book by clicking on the link below.