Would you rather be a great lawyer or be perceived as being a great lawyer?
For many people, I think the answer to that question varies over time: At age 30, you’d rather be a great lawyer. At age 60, you’d rather be perceived as being a great lawyer.
Because, over time, your reputation may come to track reality. If you’re perceived as great when you’re 30, but you’re actually no good, that truth may out over time. As you age, your reputation may catch up with you.
By the time you’re 60, your professional horizon will have shortened, and it’s less likely that the world will unearth your incompetence. If you’re perceived as being a great lawyer when you’re 60, you may well make it to retirement unscathed.
What of law firms? Would you rather that your firm be great or be perceived as being great?
The answer may be the same for institutions as it is for individuals, and the answer may again turn on your time horizon: If you’re actually great, you’re likely to prosper over time. If you’re (incorrectly) perceived as being great, you’re likely to prosper in the short-term and fail over time.
What does that tell you about law firm mergers that are meant to increase the “brand awareness” of a law firm? The firm will merge and improve its public profile (and image) in the short-term, without necessarily tending to quality. That may well improve short-term performance, but perhaps at the expense of long-term success.
Finley Kumble plainly followed that strategy. Steve Kumble is quoted as having said, “When we’re the biggest, people will think we’re the best.” I’m not sure that anyone ever viewed Finley Kumble as the pinnacle of quality, but the firm surely gained prominence by expanding rapidly and improving its brand awareness, until the firm exploded.
There’s plenty of pseudo-empirical evidence that suggests that the marketplace generally perceives bigger as better. From the late 1980s through roughly 2000, Baker & McKenzie, Jones Day, and Skadden were the three largest law firms in the world, with Baker & McKenzie the largest and Jones Day and Skadden running neck and neck for second place. Which U.S. law firms had the strongest brands this year? You guessed it.
Zoom out from the U.S. to the entire world, and big still matters. A recent analysis by Acritas says that the five law firms with the strongest brands globally are Baker & McKenzie, Clifford Chance, Freshfields, Linklaters, and DLA Piper. Those may not be precisely the five largest law firms in the world, but they’re all contenders. And I’ll wager that the recent moves by Norton Rose Fulbright and, if it closes, Orrick and Pillsbury Winthrop, will catapult those firms (even) higher in the brand awareness charts.
I recently dined with a senior administrative guy from one of those five best-known global firms, and he told me that he thought the trend to globalization favored his gargantuan firm. “If I were a great law firm with a presence in only one or two cities, the trend in these brand-awareness studies would worry me. To remain at the top of the heap in today’s world, you simply must get bigger.”
But that’s all reputation; what of quality?
Let me start with the obvious: All of the huge global firms appear near the top of the brand awareness charts, and no huge firm appears at the bottom (or falls off the charts entirely because no one has ever heard of it). Thus, in one sense, Kumble was right: Bigness alone adds value.
At that point, please lay out the eggshells for me to walk on. I work for the world’s leading insurance broker for law firms; I’m not about to criticize any particular law firm in public.
To the contrary: I think you’re all great! Lawyers are like the children in Lake Wobegon: They’re all above average! In fact, that’s understating it: You’re all the very best in the world! It’s a zillion-way tie for first place! (By the way, do you need a good broker? Send me a note through the e-mail link at the end of this column.)
I’ll say only that there must be some large firm whose quality has become spottier over time as the firm pursued growth as an end in itself. And there are surely some small- and medium-sized firms that consist entirely of top-notch lawyers; those firms are overlooked in the marketplace only because fewer clients have had personal contact with lawyers at the firm.
But perhaps that’s irrelevant. Reputations are odd things and are often very sticky. Maybe reputations do conform themselves to reality over time, or maybe that’s true only in an abstract world in which information is perfect and time unbounded.
Or, as yet a third possibility, maybe the meaning of “quality” is so amorphous in the field of professional services that reputation is what matters and reality doesn’t exist.
Mark Herrmann is the Chief Counsel – Litigation and Global Chief Compliance Officer at Aon, the world’s leading provider of risk management services, insurance and reinsurance brokerage, and human capital and management consulting. He is the author of The Curmudgeon’s Guide to Practicing Law and Inside Straight: Advice About Lawyering, In-House And Out, That Only The Internet Could Provide (affiliate links). You can reach him by email at [email protected].