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Guest Editorial: Navigating a Law Firm Through Choppy Waters: A Challenging Time in the Czech Republic

Guest Editorial: Navigating a Law Firm Through Choppy Waters: A Challenging Time in the Czech Republic

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Attorneys tend to navigate their clients through stormy legal waters so that clients do not crash on the rocks of Scylla. But how good are we leaving the paternalistic client-care world and trying to navigate our own destiny in terms of our legal business facing the reality of severe competition, pricing pressure, and the legal profession becoming just a commodity?

All this in an opportunistic world where the original meaning of trusted advisor has been emptied out. Modern cars have a comfortable navigation system, where you enter a few details and a soft female voice directs you where you want to get to. Is there any such navigation system for established law firms? What should we type in our legal navigation systems, instead of the “country, city, street”?

No matter how difficult it might be, the “client first” approach is and will remain the ever-present and inevitable mantra in our business lives. It is only up to us how we tackle this. Using an automotive analogy again, our relationships with clients are more and more frequently subject to “crash tests.” Clients are often uneasy, unreasonably demanding, and insistent that your competitor has offered double-digit discounts – or they simply replace you with “low-cost” services. Only those who know how to prepare their legal firms for these “crash tests” will lead in the 21st century. This will require the highest standards of quality, simplicity, and commercial usefulness of legal advice. Any “breach of technological discipline and ignorance of consumers’ needs” (using car manufacturer jargon) will lead to “defects” of legal services and elimination from the market. Clients expect their legal advisors to have a full industry knowledge of what they do and how they manufacture, distribute, and sell. Cars with a five-star crash test symbol in their manuals provide assurance of safety and reliability. Attorneys are expected to guide clients – also, in a way, about safety and reliance. And those who manage to get a “Five Star” award from their clients will be on the right track to their destination.

But legal service is also about people who form legal firms, starting from junior paralegals and ending with the top equity partner. And people have expectations and desires. The identity of a successful firm is built with the glue of humility, integrity, knowledge, and a shared common vision. As in other service firms, motivation and career paths have become an important factor in determining how good a law firm can become. An environment with a steely sense of duty and financial discipline is simply not enough to motivate young legal talents. In the tiny and fragile Czech legal market, these are very sensitive and important aspects. Hundreds of attorneys working in large Czech law firms are facing a constant dilemma about their professional future and about whether or not their ultimate partnership ambitions will come true. Only excellent law firms understand that the vertical “partnership” with the pool of their lawyers is just as important as the traditional closed horizontal partnership. Eroded relationships mean you are driving a car with faulty valves, which loses horsepower and will ultimately be broken apart by the departures of talented lawyers and the loss of hard working and loyal timekeepers.

Finally, every law firm can show its clients it is able to juggle ten apples at once and provide robust, punctual, and correct advisory services. But where is that “street number” entry on our navigation panel which will bring us to the right doorstep? What is the couple of inches that make the difference between very good and excellent performance? In the Czech legal market, some believe it is all about the miracle of dumping prices and the ability to offer rates at the level of supermarket chain cashiers. Others stick to amusing and entertaining clients, some of these “social friendship experiments” being on the border of ethical standards. Still others try to bring a different angle to legal advice by combining it with a sort of lobbying efforts, proper “dot connections,” or active engagement in back-door business policies. Every product has its buyer and, no doubt, these types of legal apple jugglers will find a number of unsophisticated domestic buyers. But will such an approach suffice when working with mature clients or going outside of the Czech bowl? Will this fly with sophisticated global clients in the years to come? Facing all types of regional and global challenges in the legal profession, in a world where hourly rates are losing their role and are slowly disappearing, the need for innovations in the legal profession lies much deeper. In the automotive industry, you can survive for a few years with facelifts of a car model but, at the end of the day, you must deliver a new innovative solution to your customers by coming up with a new model, a new line, or new solutions. It is no different for legal business. Artificial intelligence and global legal services outsourcing are just two examples from a rather long list of new “car models” in the legal industry. And those legal firms knowing “how” to do this will get the correct “street number” entry on their navigation panel.

And remember, if your law firm choses a wrong path, there will be no soft and gentle female voice patiently telling you that you are on a wrong track and asking you to please make a U-turn at the nearest possible crossroad. Because there will be no next crossroad. 

By Alexandr Cesar, Managing Partner, Baker McKenzie

This Article was originally published in Issue 3.6 of the CEE Legal Matters Magazine. If you would like to receive a hard copy of the magazine, you can subscribe here.