How David beat Goliath

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Reading to my three-year-old from her new book Bible Stories for Toddlers last night, I was struck by something about the story of David and Goliath that I hadn’t fully appreciated before. David is often held up as a symbol of bravery in the face of insurmountable odds, as well as the power of divine protection. But it struck me that courage and righteousness aside, young David was no fool: he didn’t engage a gigantic opponent in hand-to-hand combat. He kept his distance, picked up a sling and stone, and took out a heavily armed warrior with missile fire. David was one of history’s earliest recorded asymmetric fighters.

There’s a lesson here for lawyers who work in smaller operations, from midsize firms all the way down to sole practices: taking on your bigger competitors on their terms is a losing strategy. Either avoid their strengths or capitalize on their weaknesses, but at all times remember that you can’t do business the way they do and you shouldn’t try. Recent news items offer three examples that bear this out:

1. Technology: The 2008 ABA Legal Technology Survey Report sent out some highlights in a press release, including this one: 37% of respondents use case or practice management software. But what’s interesting is that smaller firms have better uptake: 24% of large-firm lawyers use the software, versus 33% at firms with 10-49 lawyers, 50% of respondents from firms of 2-9 attorneys and 40% of solos. If you’re in a small practice, you absolutely must capitalize on big firms’ unwillingness to adopt these programs, which pay for themselves almost immediately in terms of increased productivity and efficiency. Biglaw’s failure in this regard is a gift to its smaller rivals, one that won’t last forever.

2. Receivables: The Daily Business Review reports on a raft of firms that, in the face of a weakening economy, are cracking down on overdue receivables and getting their cash flow pumping harder. Firms could ignore outstanding bills when times were good, but now they’re motivated to collect those debts — or at least, judging from the article, the midsize and smaller ones are: the only large firm in the story says it “touch[es] base periodically” with clients whose lack of payment suggests the firm has “fallen off their radar screen.” Small firms can and must take cash flow seriously, because it adds an extra layer of profitability that some larger firms still feel, for some reason, they can ignore.

3. Exclusivity. Your ABA reports on a session at its annual meeting in New York on how solos can get referrals from large firms. The critical feature, as is always the case for smaller practices, is focus: develop a specialized niche that offers a complementary, not competing, profile to firms that could send you work. True enough, but the greater point is that large firms seek to be as many things as possible to as many clients as possible. You need to do the opposite: be very few things to a limited selection of people, so that you can own that cross-sectioned block of work and clients. Large firms think constantly about their fellow big-firm competition; your goal should be to have as little competition as possible.

Taking an asymmetric approach to strategy allows you to think of other big-firm weaknesses that you can turn into small-firm strengths:

* Overhead: One of the two biggest expenses for large firms, which feel compelled to occupy tony premises in expensive locations, can be a competitive advantage for you. Take steps to reduce your real-world footprint by going wireless and mobile, accessing caselaw and precedents online, sharing office space, or working from home or outside urban centers.

* Payroll: Here’s the other major expense for your huge competitors, whose business models assign many highly paid young lawyers tasks that have them punching below their intellectual weight. Hire experienced lawyers on contract, or let them work from home, and try to send at least some work offshore every month. The big firms have made salary a weakness for you by driving up market prices, so compensate by offering the flexibility and satisfaction that they can’t. Which brings us to:

* Women: Large firms’ inability to retain women past their sixth year of call is well-known, thanks to an economic model that pretends women don’t carry a disproportionate amount of child and home responsibilities. Women lawyers are an undertapped source of talent, a Moneyball-esque market inefficiency. Take advantage: find out what women lawyers are looking for in a legal employer and shape your workspace accordingly.

You can adjust and add to this list based on your own community, practice area, talent pool and client marketplace. What it comes down to is: don’t try transplanting a large firm’s business model to your more modest tract of land. Identify your bigger rivals, figure out their vulnerabilities, and make the appropriate changes to your own smaller firm’s profile.

But one final note of caution; beware of focusing too much on your competitors and not enough on your own strengths and vision. David was smart enough to use a sling and stone against a giant. But he was also adept enough with that weapon to take the giant down with one shot.

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2 Responses to “How David beat Goliath”

  1. Susan Cartier Liebel

    Jordan,

    This is a brilliant observation. Sometimes people have an intuitive feeling about how to handle things. Yet, sometimes when someone paints a picture as clearly as you did it gives clarity.

    Solos have the ability to do everything you described. Successful solos already exploit Big Law’s weaknesses and therefore have no competition. They are not mini-Big Law, they are solos which is a distinct category without competition. They function differently and generally have a different mindset, that of the entrepreneur.

    I’d like to add another dimension to your story, though. They can also peacefully co-exist each serving their respective clients, each simply capitalizing on that which the other is incapable or not desirous of doing.

  2. Grant D Griffiths

    Great post and premise on how solos, by utilizing technology and other tools, can handle things just fine for their clients and give the public access to legal services. And thanks for the link to Home Office Lawyer.

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