Five Criteria for Going National

In 1960, fewer than 40 domestic law firms had 50 or more lawyers. In the latest listing of the 250 largest U.S. firms, even after two years of declines in total employment, no. 250 on the list still employed 160 attorneys.

Many of these firms began practice in a single city or small region before their growth took them to a national level. Such law firms often followed their corporate clients, who for decades have lived by the philosophy that bigger was better.

Large national firms certainly offer their clients many resources and economies on a scale that smaller firms simply cannot. The existence of a fit and compatibility among clients and practices is the starting point for deciding whether national growth is the right choice.

Lawyers desiring national growth should know the exact details about the firm's strengths, its client focus, how profitable the firm is and what opportunities exist to get more work through national growth.

With this knowledge in place, there are five criteria that ultimately will determine whether a regional firm's effort to go national will be successful.

• The nature of your practice: Strengths in areas like natural resource law, immigration or intellectual property can take you across state boundaries. Insurance defense, personal injury and other practices that require local court appearances tend to be restricted by state boundaries even if they can grow within the state.
• The culture of your firm: Reconciling potentially diverse perspectives within a firm — or at least identifying a dominant one — is essential so that any attempted growth doesn't pull the firm apart. Some lawyers don't want to expand beyond one office. Other lawyers have life-balance issues and do not covet a workday requiring more extensive management involvement in multiple locations. Still other lawyers are entrepreneurial and see growth as a holy grail and the law merely as their chosen path to develop a business.
• The depth of your business plan: Writing a business plan tends to help you focus your energies and achieve the growth you set out to realize. But be careful not to formulate a plan so rigid that it discounts luck and good fortune as potential growth.
• The effectiveness of your business practices: National expansion will grow revenue and the bottom line; however, true success in national growth of law firms depends on the top line — the amount of revenue billed and collected. The firm that does not pursue a high realization rate as a consistent business practice risks becoming another Finley Kumble, which became the first national mega-firm before it disintegrated in the late 1980s recession due to lack of an aggressive receivables policy.
• The stature of your clients

If your firm is fortunate enough to get a growing company or major celebrity onboard as a client (especially an entertainer with multiple personal legal issues or a sports star with a national presence), you can grow simply as their activities and the media attention do.

Consider these criteria before making the leap to the national stage. As the last several years have proven, no poorly run organization is too big to fail.