Midsize in the Midwest? This Could Be Your Firm’s Moment.
Yesterday’s release of data on the AmLaw “second hundred,” the firms ranked from 101 to 200 on American Lawyer magazine’s list of the country’s largest law firms, was something like the opening of a time capsule. The 2019 results measured for the list aren’t terribly old, but they are jarringly out of context in the present moment.
Still, there was plenty to learn from the numbers feeding the legal industry’s most obsessed-about list, even if it is a relic of pre-Covid days. From our perspective, two key dynamics stood out:
Focus: The firms in the smallest quarter of the AmLaw 200 list, ranked 175 to 200, booked some of the strongest growth and overall financial performance in the entire list, often matching the results achieved by the firms at the very top of the list. Meanwhile, those in the middle of the list were among the weakest. There’s no single explanation for this, but one general trend is very clear: it’s easier to compete and succeed as a smaller, more sharply focused firm than it is as a scaled-down version of a global firm. Many of the firms who did best were characterized by a boutique or specialty approach to a particular industry or a narrow set of practice areas. They were able to market their skills and services as distinct from the giant full-service firms, and clients were clearly receptive to that. On the other hand, the “full-service, only smaller” firms had a harder time distinguishing themselves and, in the absence of a distinct offering, are sometimes forced to compete on price alone. We say it over and over again in the strategic communication advice we offer to our client firms and to individual lawyers: trying to be all things to all people is not a strategy.
Geography: Nearly 40% of all the “second hundred” firms who grew 2019 revenue by 5% or more were in the Northeast. That’s no surprise, given the historic dominance of New York firms on the list. Significantly, though, the next biggest group – 24% of the fastest growing firms – were in the Midwest. As business clients make decisions about what law firms they’ll hire in 2020, Midwestern firms hold some key advantages, including lower cost structures and, if current trends hold, a potential faster return to full productivity. Midwestern firms could well be an increasingly attractive alternative to businesses concerned about both cash and responsiveness to the anticipated wave of litigation following the pandemic and return to work.
If you’re a mid-sized firm in the Midwest, this could be your time to shine. Are you ready to build new business and compete for new work in this environment? Does your firm stand out in this crowded and confusing marketplace?
We can help sharpen your messaging to meet this critical moment.