Trial Magazine
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Smart Firm Growth
Be sure any plans for law firm expansion are in line with a shared vision of your firm’s goals, culture, needs, and aspirations.
March 2022Law firm growth is one of the most important, misunderstood, and hazardous aspects of law firm management. Law firms constantly seek growth opportunities. Growth, however, inevitably brings change. And when firms cling to outdated growth strategies, they can doom not only growth but the firm itself. Adaptability is the key to successfully growing your firm.
There are many reasons why you might want to grow your law firm. Those reasons can be as diverse as the need to staff a sudden surge in business or the desire to launch an entirely new practice area that requires additional personnel and infrastructure. To succeed in growing your firm, you must know your firm’s goals and then deliberately implement a plan that addresses sustainability; your “dream team”; geography; finances; and management, oversight, and quality control protocols appropriate for your expanding firm.
The “what” in growth is conceptually easy: Law firm growth can take many forms, including increasing your existing client base, establishing new practice groups, or opening new offices. The “how” is the pivotal issue and bright-line decision point that separates success from failure in the expansion context. Answering the “how to grow” question requires a thoughtful analysis of the legal industry’s evolution and where your practice fits into the picture. Agility in the face of change separates firms that thrive from those that merely survive.
The challenges that accompany law firm growth, such as taking time to focus on business management and struggling to find the right talent, can be downright exhausting. But there are important reasons to focus on growing your firm that will be worth your investment of time and resources. Whether your goal is to establish your firm as a legal thought leader or to increase business, a deliberate, well-planned approach to law firm growth is crucial.
The key is to set reasonable short- and long-term benchmarks that your firm can achieve.
Think About Sustainability
As with all goals, the key to preventing burnout and abandonment of plans to grow your firm is to set reasonable short- and long-term benchmarks that your firm can achieve, such as practice group headcount targets, geographic targets, and profitability goals.
While setting goals may appear to be simple, people tend to be impatient. Impatience can motivate achievement of short-term goals, but it can destroy your long-term vision. For example, long-term goals can be jeopardized if a firm adds headcount to satisfy a perceived immediate need to cover the workload without considering what happens if and when that short-term need ends. Be disciplined in your focus on current needs as a component of your larger, long-term strategy.
A key feature of sustainable growth is hiring lawyers and staff as the firm acquires new clients or pursues new matters. If you wait to add team members until you’re already overwhelmed with client needs, you won’t have the time to properly integrate, train, and support them. This can compromise your firm’s ability to advance new matters and comprehensively represent your clients’ interests.
Another key to sustainable growth is your firm’s versatility in dealing with unexpected challenges. For example, when COVID-19 broke out, many firms downsized or reduced compensation. Others adapted by shifting their focus to business interruption claims or to cases in the ever-growing technology and cybersecurity fields while also embracing technology for remote working conditions. This ability to adapt and pivot allowed these firms to grow even during uncertain times.
Filling New Roles
Associates are often ideal candidates for firm growth. If your primary concern is handling excess work or upsizing your existing practices, hiring associates likely will meet your needs. Working with and training younger lawyers also creates valuable mentoring opportunities. You will be able to impart knowledge to these newer attorneys, potentially creating a legacy of lawyers who will continue to advance your firm’s interests and vision. While many firms have a “sink or swim” attitude toward mentorship, that approach risks wasting opportunities to hone valuable talent. Newer attorneys can greatly benefit from this post-graduate training for early professional success.
Depending on the circumstances, however, lateral partners might be better-suited to your needs. If you decide to expand into a new practice area, consider pursuing high-level partner talent. Many firms believe that because they excel in one practice area, that talent is transferable to other case types. While there are, of course, exceptions to every rule, that’s usually not the case. According to Dr. Anders Ericsson’s 10-year rule of expert performance, it takes 10,000 hours (20 hours for 50 weeks per year for 10 years) of deliberate practice to develop true expertise.1
Unless you want to devote 10 years to the organic mastery of a given practice area, hire a partner-level lawyer who has already put in the time and has the experience. He or she can provide invaluable insights into growing that new department consistent with your firm culture, including suggesting best practices that you cannot afford to prolong implementing. And as the new practice area evolves, a lateral partner can help the firm identify key roles and hire uniquely qualified personnel to propel the department forward.
For instance, recognizing the importance that cybersecurity and privacy play in the modern world, our firm founded its dedicated privacy, technology, and cybersecurity practice section in 2018. As the practice area grew, we realized that continued growth would require recruiting additional lawyers in technology. We laterally hired a partner who is an expert on property rights in personal data, uniting him with another partner who is a cybersecurity powerhouse. Will a new partnership at your firm move the law firm forward? If so, lateral hires can be advantageous.
When you’re hiring new team members, your first goal is to get talented people. The difficulty is in doing so efficiently. You may rely on a word-of-mouth referral, search consultant, or LinkedIn search. There’s also the prospect of working with a legal recruiter or a professional search company, but because of the high fees associated with such services, we’d recommend that approach only for highly specialized search projects. Moreover, sometimes a situation arises in which a prospective lateral you weren’t even looking for suddenly becomes available, and you strategize those hires in real time.
Before embarking on an expansion plan, understand your firm’s existing—and desired—culture.
The Importance of Firm Culture
Every new hire has the potential to affect firm culture. Before embarking on an expansion plan, understand your firm’s existing—and desired—culture. For example, our firm was established with the overarching principle that everyone is a potential team leader with talents that enable them to lead through adversity. In addition, our lawyers and staff focus on the impact their work will have on clients and the community. If you don’t know your own purpose, goals, and outlook, you’ll never be able to meaningfully communicate your firm’s vision to prospective new hires. With the ultimate goal of expanding the firm, a shared vision is essential for cohesion with new lawyers.
During the onboarding process, clearly communicate about your firm’s culture, and have your new hires spend considerable time with your preexisting team to get a comprehensive orientation into what the firm is really all about and how they fit into it. Considering that your preexisting team already should have spent meaningful time with the new hire during the interviewing process, transitioning that discussion from a “pre-hire” to a “post-hire” context should be relatively seamless. Fostering a forum for open dialogue among team members encourages transparency and accountability. Practice groups can hold regular “huddles” to check in on team members and talk through their ideas and concerns.
Regular team meetings are also a great tool for promoting firm cohesion and fostering, implementing, and reviewing the firm’s diversity efforts by perpetually making them a “front burner” focus. Robust diversity, equity, inclusion, and belonging (DEIB) programs have emerged in countless industries, including in the legal field.2
Recent law school graduates and potential clients increasingly seek out firms that reflect the face of America. While we typically think of diversity in terms of visible differences, it also includes factors such as diversity of thought and family structure. People with differing perspectives and worldviews directly influence and create a stronger workplace and better work product.
Having a firm culture where belonging is inherent will attract top-level talent. An environment of inclusion builds a more cohesive team and ensures the firm’s health and longevity. If your team members don’t have to worry about fitting in or “code switching,”3 they can focus on growing the firm and leading the next generation of its lawyers.
Forecast Your Finances
Of course, all these growth opportunities require meticulous and strategic financial planning—the last thing you want to do is outgrow what you can afford in both the short and long term. New lawyers bring with them increased overhead, including salaries, benefits, bonuses, and additional support staff requirements. Optimizing results from hiring a new partner might necessitate adding additional associates, paralegals, forensic accountants, investigators, and the like.
New partners almost always bring new cases and new business relationships, which is an incredibly positive development for any firm. However, those new relationships and cases increase firm costs. At the outset of the new relationship, account for litigation fund contributions; expert, travel, and discovery costs; and other anticipated case expenses.
During expansion, firm managers also should take a calculated look at current personnel, both in terms of historical achievement and firm needs, as well as in the context of what future firm expansion will require. Look for redundancies or whether more systemic—and often difficult—personnel decisions need to be made. For example, multiple associates may be more valuable than a single partner. Correspondingly, adding personnel may require hard discussions about partnership track adjustments, compensation overhauls, and firm culture considerations. All of these issues are manageable, but you need to approach and address each one prospectively and carefully.
Evolving Your Management Style
The reality is that expansion results in a larger firm, raising different management issues, advantages, stresses, and pressures. A matter that previously could be resolved by two people sitting at a table may now require management committees and additional planning and oversight. It is also crucial to engage an employment lawyer very early in the process and to work carefully with that lawyer to formulate and implement firm-wide policies and best practices that establish guardrails and maintain expectations. This can be as mundane as vacation day accrual and approval or as complex as compensation, case origination, and advancement within the firm.
Moreover, if your growth plan entails establishing new offices, managing and integrating those offices will create additional pitfalls and opportunities. As the saying goes, “The best part about working in a satellite office is that they leave you alone; the worst part about working in a satellite office is that they leave you alone!” It is thus vitally important to ensure that your satellite offices—whether preexisting or new—are fully and sustainably integrated into your firm.
Contrarian Expansion
Finally, contrarian expansion—expanding when other firms are contracting—raises an additional set of considerations and concerns. As we saw during the pandemic, expanding during a crisis isn’t for everyone. It can be difficult to be the firm that decides to go one way, while others do the exact opposite.
During the pandemic, our firm increased headcount by more than 100% and opened three new offices. Our decision to expand during this time was driven by a need to increase headcount both to support current practice groups and case dockets as well as to develop new practice groups and practice group initiatives.
We could not pass on opportunities to bring some “best in class” partners and associates aboard to fortify and expand several practice areas. Doing so, however, required careful planning. We had to ensure that adding remote personnel was done in a manner that maintained cohesion, while being mindful of the physical and emotional impacts of the pandemic—a challenge that we successfully faced through regular virtual check-ins, practice group meetings, and (electronic) social opportunities.
Law firm expansion is never a one-size-fits-all approach, and much of it is an iterative process. However, having a shared vision of your firm’s goals, culture, needs, and aspirations—and deliberately pursuing your expansion in a way that tracks and fulfills those goals—will greatly enhance and facilitate your efforts.
Adam J. Levitt is a founding partner of DiCello Levitt Gutzler in Chicago and can be reached at alevitt@dicellolevitt.com. Mark A. DiCello is a founding partner of DiCello Levitt Gutzler in Mentor, Ohio, and can be reached at madicello@dicellolevitt.com.
Notes
- K. Anders Ericsson, Ralf Th. Krampe, & Clemens Tesch-Romer, The Role of Deliberate Practice in the Acquisition of Expert Performance, 100 Psychol. Rev. 393–94 (1993).
- For more information on developing DEIB programs, see Kate Heinz, What Does Diversity, Equity, and Inclusion (DEI) Mean in the Workplace, Built In, Dec. 13, 2021, https://builtin.com/diversity-inclusion/what-does-dei-mean-in-the-workplace; Alexander Sediva, DEI in a Nutshell, Employers Council, https://www.employerscouncil.org/resources/dei-in-a-nutshell/; Creating a Culture of Diversity, Equity, and Inclusion, Thomson Reuters Legal, Feb. 25, 2021, https://tinyurl.com/vf37arrm.
- “Broadly, code-switching involves adjusting one’s style of speech, appearance, behavior, and expression in ways that will optimize the comfort of others in exchange for fair treatment, quality service, and employment opportunities.” Courtney L. McCluney et al., The Costs of Code-Switching, Harv. Bus. Rev., Nov. 15, 2019, https://hbr.org/2019/11/the-costs-of-codeswitching.
