Jun 18, 2014
The Failing Law Firm' by David J Parnell is a timely and relevant book for commercial lawyers. It centres around case studies of forty-two recent major commercial firm (50+partners) failures.
Parnell distills the evidence into patterns that can be found across many failing firms. He uses his extensive knowledge of the industry to generate diagnostic criteria that might well predict a high likelihood of failure in other cases. But beyond that, he analyses the dysfunctional patterns and points out practical ways to counteract them.
Parnell's analysis makes it clear that while economic changes contributed to some firm failures (e.g. the burst of the dotcom bubble for Brobeck Phleger & Harrison LLP), internal problems relating to strategy, financial management, and firm culture were far more detrimental. Given the changes in the legal services industry that today's commercial law firms face, this is a timely message.
The book covers aspects such as governance, firm culture, compensation models, and overall firm strategy, and makes it clear how they can jointly and severally lead to firm failure, as detailed in the case studies, if not counteracted in a timely fashion. The style is conversational, well-researched and detailed (occasionally slightly too much so), making the book worthwhile and enjoyable read.
Overall, mandatory reading for anyone working in a commercial law firm today, or considering a lateral move.