Reinventing The Law Business: Creating Customers – Peter Drucker

What lessons does the work of management guru Peter Drucker offer for the business of law?

Of all the regrets I have in life, one of my greatest is that I never had the chance to meet Peter Drucker before he died.

Drucker is one of my intellectual heroes. He was able to look at the same world that everyone else was looking at but see things that others couldn’t see. He literally invented a science. And like all science, it is around you from the start but you just can’t see it till someone shows you the way.

The science he invented was the science of “management.” Before Drucker, people just ran things and sometimes good things happened and sometimes bad things — no one really delved too deeply into the “why” of it all. But then along came Drucker, who made order out of chaos and realized that there were principles that, if followed, would increase the likelihood a business would be successful.

All those leadership books you sometimes read, all those “how to” books you sometimes read, all of that thinking evolved from his groundbreaking analysis into the science of “management.” Drucker’s books are utter masterpieces. Indeed, there was an epiphany for me on every single page of his amazing book Management (affiliate link). I think I learned more about how to run my law firm successfully from Drucker than from any other source.

Here are two thoughts from Drucker that hit me like a bolt of lightning when I read them. Honestly, my business — and even my whole life — was never the same again.

First, Drucker asks a question: what is the “purpose” of a business?

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The obvious answers I thought of were to make a profit or serve society or do good things for your employees or make your customers happy or something like that.

But Drucker says: The purpose of a business is to “create” a customer!

Wow. When you hear that, it makes you tingle, doesn’t it? You aren’t just going out to “get” customers, you are “creating” them…… and that is your true purpose.

Then he further peels the onion away with a second thought by saying that there are only two things that every business MUST do. Everything else is white noise. If you do these two things, you have a chance at great success, and if you don’t, then most of the time the converse.

Can you think of what they are? I couldn’t till he told me. The two things are very simple:

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To innovate.

And to market.

I remember reading all of this and feeling like I had been struck. Of course!!!!

If you don’t innovate, then you are selling what everyone else is selling and you have no pricing power. By the laws of perfect competition (which we remember from college), your pricing power erodes as you are effectively selling a commodity.

And if you don’t market the product, then people not only don’t know about it but also don’t know why they should want it.

If you really spend a moment and think about all of this, it is so simple. To succeed in the business (including the legal) world, you just keep in mind that the “purpose” of your business is to “create” customers, and the way you do this is by “innovating” and “marketing.”

Consider Apple for a moment. What would Wozniak have done without Jobs? He would have tinkered and tinkered till someone stole or used what he did or employed him or the industry just moved past him.

And what would Jobs have done without Wozniak? What would he have had to sell? Not a doggone thing.

They were the ultimate people in innovating and marketing.

And talk about creating customers. No one did that better than Jobs. I truly love his incredible statement:

“Don’t give the customers what they want – show the customers what they should want.”

So I ask you: does your law firm have as its purpose “creating” customers? And are you “innovating and marketing” to do it?

Let me drill down a little deeper.

As you probably know by now if you have been reading my column, I am the managing partner of Duval & Stachenfeld. We are a 70-lawyer firm in midtown Manhattan, focused on real estate. I have two kinds of customers: lawyers (attracting talent to my firm) and clients (attracting clients to my firm).

If I were trying to attract a client to my firm, I could say we are really great lawyers — but would that do much to attract a client to my firm? I sincerely doubt it. People have all have heard that before.

And if I were trying to recruit a superstar lawyer to my firm, would it work to say we are really a great place to work? Would that do much to attract this great lawyer to my firm? I doubt that too. The lawyer prospect has heard that before too.

But if I told prospective lawyers and prospective clients that I was “reinventing the law business” by doing things that were dramatically different from other law firms, maybe people would perk up, just a little bit?

For example, if I said the following:

We are a pure play in real estate law — unlike all other law firms, shunning other lines of business — in order to achieve the top status in our niche?

We add value to our clients by doing more than just legal work — instead, our mission is to really help our clients build their businesses, by making connections for them, finding them strategic alliances, finding them employees (or finding them jobs) when needed, and creating intellectual capital for them.

We really add value to our lawyers by making the mission statement of the firm to “attract, train, retain and inspire talent.” Unlike most law firms, which are “about the clients,” we are “about the lawyers,” and we put the lawyers and their careers first in our thinking. Indeed our saying is that “we are not in the law business – we are in the lawyer business.” This is because we are focused on helping our lawyers build their careers, and we know if we make our firm a place where lawyers can successfully build their careers, then our firm will be a place where clients are treated exceptionally well.

We have a unifying “hedgehog principle” that stands for the proposition that we really care about our lawyers and our clients, not just because the clients pay money and the lawyers bill hours, but because there is something more in the relationship.

So are we creating customers here by innovating and marketing? I think we are.

It used to be that lawyer customers looked for a “job” at a law firm that was kind of like the other law firms. It was a “job and not an adventure” (to mis-quote the U.S. Army’s recruiting jingle). The customers, the lawyers, had no idea that something like this could even exist, but now that they see it in action, they realize what they are missing — and they like it a lot.

And it is the same with the clients. It used to be that clients went to lawyers for legal advice. Did they think they needed a law firm with a mission to help clients build their businesses? I don’t think they thought that. Our clients think that now and they like it.

So my theme here is very simple. Don’t just do what everyone else does and tell everyone “same ole same ole.” Recognize that your “purpose” is to “create” customers by “innovating and marketing” — and see what amazing things happen.


Bruce Stachenfeld is the managing partner of Duval & Stachenfeld LLP, which is an approximately 70-lawyer law firm based in midtown Manhattan. The firm is known as “The Pure Play in Real Estate Law” because all of its practice areas are focused around real estate. With over 50 full-time real estate lawyers, the firm is one of the largest real estate law practices in New York City. You can contact Bruce by email at thehedgehoglawyer@gmail.com.