Note: This copyrighted article was provided to the CBA free of charge for use in the Law Firm Leaders PracticeLink newsletter. It is abridged from the original.
Imagine the following scenario: All of your peer competitors are invited to share and read each other’s strategic plans. As firm leaders mull over and examine each competitor’s future strategies, they put a check mark next to the actions that their firm is also following and an x next to those that are drastically different. What is the likelihood that there will be exceedingly more check marks than crosses on all plans?
Many firm leaders view other competitors, their strategies, performance and experience as the benchmark from which to set standards for their own firm. That kind of competitive comparison makes sense, especially as your firm’s performance is often defined by what your peer firms are doing. Where this approach becomes an obstruction is when the logic behind what works for some other firm, why it works and what might work for you is not assiduously examined and thereby results in firms engaging in mindless imitation.
Some actions can render your casual imitation not only ineffective, but in some cases, downright dangerous. Consider these three common examples of what I’ve come to label competitive plagiarism:
You adopt forms or practices a new recruit brings along from a previous firm.
Numerous firms have gotten into trouble by importing, without sufficient examination and thought, another firm’s practices.
There is nothing wrong with learning from experience, as long as we’re learning from our own unique experience. Blindly copying some other firm’s tools, templates, practices, perspectives and procedures assumes that those documents and precedents can be easily applied in your firm’s unique culture.
But if your culture is unique, chances are another firm’s hand-me-downs won’t fit properly.
You duplicate the most visible action you see competitors initiating.
Buying revenue by acquiring partners with portable books of business has thrown the majority of the Am Law 200 firms into a lateral hiring frenzy. In fact, nearly every law firm of any significant size has selected “lateral hiring” as one of their top three strategic projects. How is it working for them?
Research results from Mark Brandon at Motive Legal in the U.K.. show that nearly a third of lateral hires into London law offices had failed within five years – and those were just the out-and-out failures.
Meanwhile, the research of Harvard Business School’s Boris Groysberg (Chasing Stars:
The Myth of Talent and the Portability of Performance) shows that many top performers quickly fade when they change firms because they underestimate the degree to which their success depended upon firm-specific factors such as long-term working relationships, quality of resources and support, and informal systems through which professionals obtain information and get work accomplished.
About 40 per cent of managing partners admit that lateral hiring usually is not profitable, yet this strategy remains pervasive. Why? Because they see how it has worked for some of their competitors. My experience suggests it is not the strategy you see – in this case, lateral recruitment – that works, but the strategy that you don’t see (exceptional efforts in methodical integration) that makes the difference.
You believe and subsequently copy things you read and hear other firm leaders doing.
“It’s not what you don’t know that will kill you—it’s what you know that ain’t really so,” quipped Will Rogers.
Many years back I attended a meeting of managing partners who belonged to the same network but didn’t compete against each other, who gathered twice-yearly to share experiences and challenges. One managing partner told the group about his firm's experience with initiating and operating three ancillary businesses – they brought the practice closer to the client, he said; brought new clients to the door; and were highly profitable. Fast forward eight months and I'm called in to work with this same firm on some internal conflicts. I quickly discerned that the level of dissatisfaction with the firm’s management committee couldn't be more extreme. And that the substance of partner discontent was in the huge amount of money being squandered on three disastrously unprofitable ancillary business operations!
I've subsequently seen this same situation unfold numerous times, most notoriously in the legal press where firm leaders are interviewed and asked specific questions about what they are doing in their firms.
From 30 years of working in the profession, I can attest, hand-on-heart, that far too much of what is conveyed is absolutely fictional. From leadership development efforts to the results achieved from a particular marketing initiative, to some firm’s actions to encourage innovation, the precise representations made are way too frequently aspirational, at best. There, repeatedly, is no factual basis to what is being reported; and yet I will subsequently hear from other firms who are using some firm’s anecdotal evidence as the justification for following in the same footsteps as a competitor.
Conclusion
The fundamental shortcoming to imitating some competitor’s action or strategy is that in your urge to copy, an urge often stimulated by consultants who take concepts from one firm to the next, you don’t conduct the necessary due diligence to determine whether a specific course of action would really work in your firm.
You are not going to get ahead by imitating what your competitors are doing; at best you are just going to maintain parity, and it may be parity of decline rather than advancement. When every firm chases the same strategies, they all slide inexorably into sameness and mediocrity. The essence of developing an effective competitive strategy is daring to think for yourself, instead of following the herd.
Patrick J. McKenna (patrickmckenna.com) is an internationally recognized authority on law practice management and strategy. He is co-author of business bestseller First Among Equals and Serving At The Pleasure of My Partners: Advice To The NEW Firm Leader published by Thomson Reuters in 2011 and was the subject of a Harvard Law case study entitled: Innovations In Legal Consulting. Reach him at patrick@patrickmckenna.com.
© Patrick J. McKenna 2014