Law Firm Profitability Insights: The Circle Of Failure

July 16, 2014

4541During a recent conference I attended, the conversation turned to how law firms are trying to tackle the challenges the legal industry is facing and what roadblocks law firms might encounter as they change.

Solutions to the dynamic market shifts we have seen in the past five years require a certain amount of experimentation.  Some experiments will succeed.  Some will fail.

We tend to want to downplay the times we come up short.  But in those failures, there can be important lessons that we should not overlook.  One author recently offered “20 Reasons To Do Win/Loss Analysis,” highlighting what can be learned from conducting a post-sale post-mortem with your customers.  I agree that a lot can be learned from talking to the people whose business you earned, as well as from those who walked away.

But what of the lessons we can learn just by dissecting our own failures and the failures of those around us?

One of my favorite quotes regarding success in business is, “The business empires built by successful entrepreneurs were erected on the foundation of past failures.”

Sometimes those failures come from within our own organizations.  This is not to suggest that we need to be hyper-critical when one of our colleagues fails to close a deal that we think we would have landed.  Quite the opposite, in fact.

During the first company-wide sales meeting I attended after joining Thomson Reuters, I heard the same names come up over and over as the rock stars of the sales team.  These were the people who won, our rainmakers.  They did not just meet quota, they crushed it. I was a bit surprised, then, to see many of those same names on the agenda as panelists for a session called “The Circle of Failure.”  How can these people be examples of failure.

Then I sat through the session.  The panelists shared examples of things they had tried, deals they had lost and strategies that had blown up in their faces.  The most important part was what they had learned as a result.  By sharing those failures and the lessons learned, we were able to increase institutional knowledge and learn from the mistakes of others.  It was Knowledge Management for the sales team, and it was done in a way that did not focus on the failure.  The focus, instead, was on the takeaway.  Everyone in the room could benefit from the lesson learned without having to make the mistake first.

I think something similar would benefit law firms.

I know attorneys, like anyone else, are loathe to share their mistakes.  An exercise like the Circle of Failure requires a large amount of humility, and that can be hard to muster.  But think of the lessons that can be taught by sharing what does not work.  The all-star rainmaker at a firm is no less of a star simply because she  is willing to talk about how she learned what she knows.  That person can become an amazing mentor.

Successful law firms will not be able to rely on just a few individuals to secure all of their future business.  The wisdom that today’s rainmakers can impart by sharing some of their experiences with tomorrow’s leaders, the junior and senior associates that will hopefully guarantee the future success of the firm, can pay huge dividends as those future leaders avoid the mistakes of the past.