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As most of us wind down the year and start preparing to face 2023, law firm leadership teams are contemplating how to stay strong and relevant in the coming uncertain economic times. Past performance is famously not a guarantee of future results, and most businesses ultimately fall flat or flame out entirely given enough time.<\/p>\n
Consider the fact that of the companies listed on the Fortune 500 in 1955, at least 87% no longer exist today<\/a>. The vast majority of the world\u2019s biggest movers and shakers at a time still in living memory just aren\u2019t around anymore, and the rate of change and turnover in the business world is only going to continue to increase. Simply treading water in the marketplace is hard, and treading water isn\u2019t good enough. As William S. Burroughs said, \u201cWhen you stop growing, you start dying.\u201d<\/p>\n Part of the problem, paradoxically, is that a firm\u2019s success can sow the seeds of its own failure. As businesses succeed, their leadership teams are (hopefully) acutely aware of the decisions, strategies, and actions that got them to where they are. So when the time comes to keep succeeding and keep growing, leadership teams are prone to looking at their old strategies and simply double down on the plan that\u2019s already proven it can work. It\u2019s a totally understandable and rational thought process, but it\u2019s also one that can result in ossified business plans that aren\u2019t prepared to adjust to changing economics, trends, and competition.<\/p>\n How Success Works<\/strong><\/p>\n As I\u2019ve mentioned before, I\u2019ve spent much of the past two years studying entrepreneurship through a master\u2019s program at the University of Cambridge Business School, with the goal of better understanding how the world\u2019s most successful enterprises find lasting, durable success, and how to apply those lessons to running the firm I help manage. As part of my thesis, I interviewed 25 legal heavyweights, including Biglaw managing partners, LegalTech CEOs, academics, and others to learn how established firms can use entrepreneurial strategies to drive innovation, rather than falling into a trap of complacently rehashing past successes.<\/p>\n Going into those interviews, I assumed that great entrepreneurship was driven by wild ideas formulated in stylish team meetings. Informed by the legends of garage-founded startups like Apple and Meta, I was imagining that great entrepreneurial ideas came out of a horde of young hoodie-wearing professionals sitting in a circle of bean bags, excitedly scribbling out concepts on dry-erase boards. It\u2019s an alluring, dynamic concept to build a company around, one centered on rogue geniuses reshaping the world one algorithm at a time.<\/p>\n Reality, as always, turned out to be a lot less sexy. Successful entrepreneurship isn\u2019t a series of blazing bright ideas implemented cleanly. It\u2019s a process, and often it\u2019s a grind. It\u2019s all about identifying looming challenges and opportunities, brainstorming solutions, and then designing controlled, measurable ways to experiment with those solutions. Those experiments will often fail. If you\u2019re lucky, they\u2019ll fail quickly and cheaply. Don\u2019t count on being lucky.<\/p>\n Once the experiment is over, it\u2019s all about figuring out what worked, what didn\u2019t, and what deserves further testing. Then it\u2019s back to experimenting, and analyzing, and experimenting again. The cycle never ends, the work is never done. Today\u2019s work is all about making tomorrow\u2019s work hopefully better.<\/p>\n There are a number of formulations and names for this process. I\u2019m partial to Eric Ries\u2019 book “The Lean Startup<\/a>,” where he calls it the Build-Measure-Learn cycle, but you may have read about or experienced the iterative feedback loop concept in any number of contexts. It\u2019s increasingly endemic in the broader business world, even if adoption in the legal space remains, as usual, lagging behind. It\u2019s a proven model for innovation and optimization, but more importantly it\u2019s a way of thinking that can be taught<\/em>, one that can become baked into a business’ systems and culture. Most law firms don\u2019t employ eccentric rogue geniuses who can reshape an entire industry with their ideas, but all law firms can work positively toward creating a culture of experimentation and iterative refinement.<\/p>\n So Why Do So Few Firms Do It?<\/strong><\/p>\n Many of the problems with law firms come down to the fact they\u2019re populated by lawyers. The challenge of developing an entrepreneurial culture in a law firm is no different. The Build-Measure-Learn cycle is all about constant change, and lawyers tend to resist change. Trevor Faure\u2019s excellent resource Smarter Law<\/a> goes into depth on this topic, and I won\u2019t quote here his entire \u201cMaleficent Seven\u201d reasons that lawyers resist change, but given our profession is one that is based on precedent, insulated from the full weight of the competitive marketplace, and that has historically done well enough by being reactive rather than proactive, it\u2019s not that surprising that many law firms are allergic to experimentation, especially given the high likelihood that some of those experiments will abjectly fail.<\/p>\n But our industry\u2019s historically reactive mindset doesn\u2019t mean the future has to look the same. Those firms looking to develop that entrepreneurial edge have some strategies at their disposal.<\/p>\n How To Overcome Being Lawyers<\/strong><\/p>\n First, firm leadership needs to constantly communicate that experimentation and change are crucial to the firm\u2019s continued success. Team meetings need to regularly include surveys of new economic trends, market competitors, and potential disruptions and opportunities. Leadership should make a point of considering structured experiments proposed by anyone in the firm, from the managing partner to the mail room attendant. And leadership needs to commit to the iterative learning model, normalizing the failure inherent in that process. Experiments that don\u2019t pan out as expected still teach us something, informing the next round of experiments that hopefully end more productively.<\/p>\n Second, firm leaders should implement programs designed to reinforce the feedback loop, rather than letting the experiment die on the vine. Next year, for example, Fennemore is launching an R&D incubator known as Fennemore Labs that provides a formal mechanism for partners, associates, and other legal professionals to systematically identify and pursue novel solutions that will position the firm for success. The ideas will be tested, and most will fail. But based on evaluation and measurement, the Fennemore Labs concept ensures that ideas that didn\u2019t work but still have potential will be iterated and tried again. We\u2019re committing resources and time to the basic concept of experimentation, learning, and growth.<\/p>\n Lastly, firm leaders must foster an environment of psychological safety for the above processes to thrive. Lawyers are trained to seek and destroy ideas. We\u2019re taught from our first days in law school how to prove our value by dismantling others\u2019 thoughts. That may arguably work in some legal contexts, but it doesn\u2019t work when ideating and working with coworkers. When it comes to innovation, leaders must learn to scale down how much we praise successful results and begin praising successes in the process. It\u2019s only by creating a positive, collaborative environment where constructive failure is welcomed that we\u2019ll be able to break ourselves of those bad law school habits and open up the floodgates of creativity.<\/p>\n Past performance isn\u2019t an indicator of future results, but today\u2019s performance absolutely is. If you want your firm to have a prosperous 2023 and beyond, embrace the entrepreneurial model. It\u2019s scary, disruptive, and often doesn\u2019t work out as expected. And that\u2019s exactly why your firm needs to do it.<\/p>\n How to grow your firm by cultivating a culture of learning.<\/p>\n","protected":false},"author":55042,"featured_media":378512,"comment_status":"closed","ping_status":"closed","sticky":false,"template":"","format":"standard","meta":{"_acf_changed":false,"footnotes":""},"categories":[279,11],"tags":[102,10555,2283,7],"class_list":["post-26017","post","type-post","status-publish","format-standard","has-post-thumbnail","hentry","category-biglaw","category-technology","tag-biglaw","tag-build-measure-learn","tag-james-goodnow","tag-technology"],"acf":[],"yoast_head":"\n
\n![\"Goodnow\"](\"https:\/\/abovethelaw.com\/wp-content\/uploads\/sites\/4\/2020\/07\/1-1-e1599160916384-150x150.jpg\")
James Goodnow\u00a0<\/em><\/strong><\/a>is\u00a0the CEO and managing partner of\u00a0NLJ 250 firm\u00a0<\/em><\/strong>Fennemore Craig<\/em><\/strong><\/a>.\u00a0At age 36, he became the youngest known chief executive of a large law firm in the U.S. He holds his JD from Harvard Law School and dual business management certificates from MIT. He’s currently attending the Cambridge University Judge Business School (U.K.), where he’s working toward a master\u2019s degree in entrepreneurship. James is the co-author of\u00a0<\/em><\/strong>Motivating Millennials<\/em><\/strong><\/a>, which hit number one on Amazon in the business management new release category. As a practitioner, he and his colleagues created and run a tech-based\u00a0<\/em><\/strong>plaintiffs’ practice<\/em><\/strong><\/a>\u00a0and business model. You can connect with James on Twitter (@JamesGoodnow) or by emailing him at\u00a0<\/em><\/strong>James@JamesGoodnow.com<\/em><\/strong><\/a>.<\/em><\/strong><\/p>\n","protected":false},"excerpt":{"rendered":"