Wake up and smell the coffee.

If you run a law firm, heck, if you work at a law firm, wake up and smell the coffee.  What, exactly, do you think you’re going to do if the economy continues to head south (which I just wrote about).   If life for your clients continues to worsen, what exactly do you think you’re going to do?  Think for a minute about how clients will feel when they receive that letter telling them that you’re raising your rates.  Think how they will feel when they read about BigLaw complaining that their profits per equity partner are down 10% (but that partners are still making millions, all the while the company’s stock price is down by two-thirds).   Think about the struggle everyone at our client’s is experiencing everyday to do more with less.

Now think about what will run through each client’s mind when he or she considers how you and your firm have reacted during these troubled times.  Did you help their situation or did you hurt it?  Did you feather your own nest at the client’s expense or did you tighten your belt so your client didn’t have to tighten its belt as much?

My friend Gerry Riskin has repeatedly advised law firm leaders to discuss the strategic and managerial implications of the economic meltdown.  I hope people are lining up with Gerry and others like him to discuss the issues raised, because these issues go to the heart of most firms’ business model.  I don’t think I am wandering too far from reality to suggest that firms that are slow to reinvent themselves during these times will be in peril.  Already the early indicators are there:  the recent ACC study showing client’s taking more work inside; the warm, enthusiastic reception to ACC’s value challenge (subtitled, “kill the billable hour”); some major counter-cyclical practices not cycling up; decreasing executive compensation and other factors that blow chill winds into most law firms.

Now, more than ever, is the time for zero-based thinking.  Everything must be on the table for critical examination.