Virtually every week brings news about law firm expansion.  The news is exciting and of great interest in and out of the legal services industry. Although the firms that report lateral hires, mergers and acquisitions and new office openings are pleased with their news to share, the passage of time proves that not all expansion moves are smart ones.  Bad moves typically become known later but are not from a lack of trying to get it right. No, the forays into expansion that go bad often are the result of common mistakes or a lack of discipline.

How can law firm leaders make good decisions when it comes to law firm growth and expansion?  How can mistakes that have an epidemic quality be avoided? How can discipline be assured?  There is no silver bullet or magic potion, but there are some fundamental steps to expansion that increase the odds that the outcome will be positive.

The approach to a better law firm expansion experience largely is a matter of process grounded on substance.  Every law firm thinking about expansion should adhere to the following five principles:

Start with the Firm’s Strategic Plan.  All law firm expansion should be securely tethered to a firm’s strategic plan.  Generally, a law firm strategic plan is birthed in the calm of visionary thought.  It is grounded holistically in the idea that the then current state of the firm will be strengthened by pursuing an articulated goal for the future.  Created at a time when expediency does not drive decisions, it can be a thoughtful assessment of where the firm needs to concentrate its efforts to succeed long-term.  When thoughts of expansion are spawned, it is essential to refer to the strategic plan.  In expansion, the strategic plan is the governor that keeps the firm from speeding out of control.

Only Expand to Further the Firm’s Strategic Plan.   Once leadership has honed-in on its strategic plan, it should test the expansion idea or opportunity against the strategic imperatives adopted previously. If the proposed expansion does not fit well within the confines of the strategic plan, caution should be exercised.  If the strategic plan is old and outdated, it behooves leadership to reassess the plan first prior to taking up expansion.  Finally, if the firm has no strategic plan, is should ask itself whether it is wise to skip the “strategy thing” in favor of expansion that may feel good but has no purpose.

Pay Heed to the Strategic Fit of the Practice or Market Expansion.  A disciplined approach to considering expansion examines the practice or market expansion as a possible component to advance the firm’s cited goals.  While the addition of a practice or an entry into a new market may seem exciting and positive, the addition may be ill fitting.  In the short term, it may not be burdensome, but over the long haul will it advance the objectives of the firm?  Looking at the potential practices or markets through the lens of the firm’s stated goals is the best way to keep the firm focused on sound expansion.

Consider the Firm’s Culture When Assessing the Proposed Practice or Market Expansion.  Adding new lawyers or jumping into a distant market may seem even right strategically, but a “good strategic fit” can undermine a firm if cultures clash.  Growth brings with it many challenges, but among the most difficult to overcome can be the task of melding professionals together that don’t see the working world in a compatible way.  A misfire on culture can be particularly insidious because while positive financial performance may cloak cultural incompatibility, discontent can spread like a contagious disease.

Assess Whether Expansion Will be Financially Accretive.  In the long run, it makes no sense to expand the firm if growth will not improve the firm’s bottom line.  Financial benefits may not occur instantly-it may be part of a long-term play.  But if expansion is not a net positive in dollars and cents, a strong case can be made to take a pass.

Improving a law firm’s odds on expansion often turns on making the correct decision before the knot is tied.  A process that is grounded on the firm’s previously adopted aspirations is the guide for success.  Will your firm have the needed discipline?