Culture is a Valuable Asset When Margins Are Tight


As with every business enterprise, especially one in highly competitive markets that are undergoing rapid and significant changes, the challenges are significant. When you come to a fight, you fight “with what you brung.” The KLG model is sourced in their roots, just like most businesses. It has some advantages, and some disadvantages.

Does it make sense for KLG to be expanding as it is, to be doing what it is doing, the way it is doing it, when it has the rootstock that it does? Why does the firm pursue this growth strategy? Eight mergers in 15 years. Does it bring the prospect of greater profit, greater stability, greater sustainability as an enterprise? Or is this more like the expansions of Ling-Temco-Vought or Gulf+Western? See “Big Law Could Learn Lessons from the Unsuccessful Corporate Conglomerate Business Model,” Sept. 16, 2009.

Perhaps it does make sense for a Pittsburgh-based firm, with a lot of small, low cost offices, to be going to Europe, Australia and Asia. Then again, perhaps it is like playing the cello in the high school marching band. It can be done, but why? Is this driven by a need for partners and their practices to have offices overseas? Does the return overcome the additional costs and investments to acquire and sustain those operations, for the collective benefit of the partners in... Harrisburg?

Is having an occupancy cost per lawyer that is $10k lower per year an answer to a question that really indicates something that is outcome determinative for the success or failure of a firm? Nothing in the AmLaw Daily article addressed the bigger questions that matter. But that was probably the point.

Besides, that is for the KLG partners to address internally and collectively if they can, and if they cannot they will most certainly address it individually. That is what usually happens in law partnerships. Let’s give them a chance to do it.

(Reprinted with permission of the Daily Journal Corp-copyright 2012)

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DISCLAIMER: Because of the generality of this update, the information provided herein may not be applicable in all situations and should not be acted upon without specific legal advice based on particular situations.

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