You remember Kodak. It was that massive film and camera company that dominated its industry for nearly 100 years. As the story goes, the juggernaut underestimated the digital revolution, fell behind, and paid the ultimate price.
Today, the company is often cited as a cautionary tale. “Keep a close eye on disruptive trends and act quickly,” they say, “or you’ll be left in the dust and end up like Kodak.”
But that’s not entirely true. Kodak created the first prototype digital camera in 1975. It spent billions to develop a range of digital cameras over the ensuing decades and even acquired a photo-sharing site in 2001. By all accounts, the company had the vision, talent, and resources to succeed in the digital world.
As Harvard Business Review’s Scott Anthony points out, Kodak wasn’t caught by surprise. Instead, it was its approach to digital photography that caused its downfall. Kodak was focused on digital as a tactic to drive its print business and failed to understand that digital photos and online sharing were becoming the industry.
The best-laid plans
The Kodak case offers a much more useful lesson than most people realize. It is entirely possible to understand your industry trends, make strategic plans, invest accordingly, and still lose the competitive battle. Even a massive organization with decades of experience and intelligent leaders making informed decisions can miss the mark.
The legal industry is not immune to the same risks. With so many disruptive forces at play – AI, alternative legal service providers, legal project management, and more – long-term success is not simply a matter of uncovering the right recipe of technology investments, business development plans, and compensation structures.
There will always be an element of uncertainty with strategic planning. Even the best strategists, consultants, and technology experts can’t predict the future. As you work through your long-term planning, consider these questions from Anthony that can help your firm evaluate your choices:
- What business are we in today? This is not about categories or offerings. Instead, consider what your clients are purchasing from you. In Kodak’s case, Anthony suggests it might have framed itself as a “moment-sharing” company rather than a chemical film company. Your value to your clients likely goes far beyond simply providing legal services.
- What new opportunities do these disruptions create? As with Kodak, it’s important to consider whether the disruptions to your practice are indicators of a fundamental shift in the industry. For instance, alternative fee arrangements may present an opportunity to restructure all your pricing strategies. Looking back at the first question, it may be the case that the business you are in today is different from the business you find yourself in tomorrow.
- What capabilities do we need to realize these opportunities? As the incumbents, traditional law firms have access to talent, capital, and clients. With the right strategies in place, these resources can give firms a distinct advantage over even the most disruptive competition. The key here is a forward-looking strategy.
A dose of humility
Law firms with decades of experience, sterling reputations, and top-flight talent have a well-founded sense of confidence about their planning. To have survived in an industry where major players can fail for so many reasons is an accomplishment.
Today’s top firms grapple with technology innovations like AI and automation, the evolution of the standard billable hour, and new client demands and cost pressures. Depending on your perspective, these factors represent a wholesale sea change for the profession or simply the next evolution. Regardless, it’s clear that the legal landscape 10 or 15 years from now will likely look much different from today.
It’s important to make decisions with confidence. But take care not to cross the line into hubris simply because your firm has succeeded in the past. Here Anthony offers powerful advice – approach new growth with appropriate humility. No one knows the future of the legal market and the smartest firms are building strategies with room to bend rather than break as the situation evolves.
For practical guidance on competitive positioning and a guide for conducting an analysis of your firm, read our white paper, The New Legal Business: Rethinking Competitive Advantage.