The legal market has undergone some significant changes due to the financial crisis and respectively the collapse of a significant part of the M&A transaction business. While international players have been rather quiet over the last years the market in Germany has seen a significant pickup of the midcap M&A business and thus several German law firms have profited from the trend. International law firms have certainly been able to hold their grounds but have been hurt by the pressure on the fee rates. International law firms of US or UK origin suffer from volatile home markets and even if the business picks up fast in London or New York, this does not mean necessarily that the German situation is changing as well. Thus there is a certain time lag between their home markets and the German market. Understanding the German market and allowing for a certain “local leeway” is a significant part of the more successful firms of UK or US origin. German firms have enjoyed the advantage of trustful long lasting relationships with their mid-sized clients who might not have the glamorous “big tickets” for their consultants but offer a certain continuity.
To cope with a sluggish market – or at least with a market which is no longer rapidly expanding- asks for some strategic decisions. Managing a professional services firm requires decisions on size, practice structures and practice management, branding, focus of the firm, governance and compensation structures. Due to changes in mentality of the younger lawyers retention of qualified people will be an issue of the future as well. Since mergers with other players in the market will become more and more difficult, due to a size and client conflict issues the question of growth will remain a hot topic on the agenda of each manager of a professional services firm.
As a global leadership consulting firm Ward Howell is committed to help clients to solve those questions relevant and important to the leadership of law firms. Based on more than 60 years of experience we believe that the big strategic issues in any firm can only be solved by people who have the right qualification – and sometimes even more important- mind set. The best lawyer is not necessarily the best manager – a well known fact - which in reality is often blatantly neglected. Strategic topics like those mentioned above are not being discussed in a vacuum. They are decided upon by people based on their qualifications and convictions or past experiences. Finally all strategic decisions need to be seen in the light of “who is going to implement” them. Our experience over the years has told us that most of the mistakes in such processes are being made in the beginning. Profiles which are not comprehensive of lack in clarity and focus are often the result of incomplete processes. Consultants need to be involved in the beginning, i.e. when business issues and objective – those in need of a solution – are being discussed. Partners of Ward Howell have a minimum business seniority of more than 15 years and we are delighted if our client involves us right from the beginning. We hope that we will have the opportunity to talk to you about your business.