Jim Collins, renowned business consultant and author of Built to Last, and Good to Great, identifies five major stages of decline of a major business organization.
They are identified as follows:
Stage 1: Hubris Born of Success
Stage 2: Undisciplined Pursuit of More.
Stage 3: Denial of Risk and Peril.
Stage 4: Grasping for Salvation.
Stage 5: Capitulation to Irrelevance or Death.
I recommend his book, How the Mighty Fall, to obtain his detailed perspectives on each stage. Below I review his summary of the components of each stage. Note the critically important fourth stage as being characteristic of a large portion of BigLaw firms today.
Apply these five factors to the recently demised large law firms you are familiar with. Then apply them to your own.
Think about the applicability of these factors to any announced mergers/alliances, as to both parties. The next five months of November through March, in the environment of continued pressures brought in part by difficult economies, and exacerbated by years of bad decisions by the leadership of some firms, may prove to be one of the most challenging in the last several decades.
(Reprinted with permission of The Daily Journal Corp, copyright (2012).)
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