THE ENTREPRENEURIAL ATTORNEY: Nature or Nurture?
by Terry Graham, M.A.
Legal Marketing Consultant
Our nation's economy has produced major upheavals in the legal profession. Many firms have laid off partners and associates as revenues drop. Still, some attorneys and law firms are surviving and prospering. How do they ride out difficulties while their counterparts reel? Business consultants point to their ability to adapt quickly and effectively to market changes.
In these firms, the entrepreneurial spirit is alive and well!
What is an Entrepreneur?
French economist J.B. Say coined the term in 1800, stating, "The entrepreneur shifts economic resources from an area of lower productivity and yield to one with higher productivity and greater yield." Webster's defines an entrepreneur as "One who
organizes, manages and assumes the risks of a business."
Studies show that successful entrepreneurs tend to be self-starters with a knack for spotting trends in the marketplace. They are focused and totally committed to achieving their goals.
Contrary to popular stereotypes, entrepreneurs are not big risk takers. Their risks tend to be calculated, minimized by their understanding of the markets they serve. Persistence, optimism and confidence also typify the successful entrepreneur.
Still, there is no hard evidence that entrepreneurs fit any particular personality pattern. Entrepreneurs are more readily defined not by who they are, but what they do.
As Peter F. Drucker explained in his book Innovation and Entrepreneurship: "The entrepreneur always searches for change, responds to it, and exploits it as an opportunity ...Entrepreneurs innovate."
Management consultant Tom Peters notes the crucial role innovation plays in business success, saying: "Tomorrow's effective organization will be conjured up anew each day."
Management, which tends to protect the status quo, must become entrepreneurial -- open to and insistent upon innovation as an intrinsic part of a firm's culture and infrastructure-- to guarantee survival.
What's "New?"Since entrepreneurship involves finding -- then exploiting -- new business opportunities, entrepreneurs by definition seek and develop "new" ways to do business. "New" can mean something unique that has never been available in the marketplace. For law firms, however, "new" tends to refer to a service, market or quality derived from existing services and markets. Another form of "new" is the better copy of what is already there, perhaps creatively imitating a competitor.
Entrepreneurial Styles
Charles Banfe, in his book Entrepreneur: From Zero To Hero identified various entrepreneurial types which can be adopted by attorneys/law firms to become more entrepreneurial.
Nichers serve an identifiable market segment. Nichers can also be defined by services they provide. Some Nichers do both, that is, offer specific services to a well defined market segment. Exploiters pursue known markets that are being underserved or overlooked. Builders often sense that an opportunity to innovate exists, but need to do more research to define it. Intrapreneurs are inside entrepreneurs, supported by firm resources, who are charged with seeking and developing new business opportunities. Team Players bring different skills to the table, usually working with an entrepreneurial leader to develop and bring an innovation to the practice. Team members may represent distinct service or market segments that, when combined, produce more business. Turnarounders evaluate a firm's strengths and weaknesses, trimming away the dead wood, with the goal of improving productivity and yield. Inventors are creative geniuses who develop something unique.
Dimensions of Innovation
While new services, especially those derived from or complementing other profitable services, are indeed a tried-and-true way to innovate, there are many other ways to innovate. New markets features and value (as perceived by clients), pricing structures, compensation options, and the quality and methods of service delivery often improve productivity and yield higher profits.
Whatever the innovation, its success depends upon its ability to meet the demands of its intended market. Entrepreneurship must be market-focused and market-driven.
Drucker identified flags that signal opportunities to innovate, including:
- Unexpected failures/successes and incongruities
- Process needs
- Changes in an industry or market structure
- Demographic shifts
- Changes in perception, mood or meaning
- New knowledge (i.e., new and/or converging technologies).
Setting the Stage For Successful Innovation
The final and perhaps most crucial element in entrepreneurship involves attitude (culture) and infrastructure. Attorneys and firms must be willing to *see* opportunities to innovate and eager to abandon what is not working. Medium- to large-size firms should organize entrepreneurial teams separate from others that are funded and evaluated with performance standards and timelines that encourage successful innovation. Sole practitioners and small firms, who don't have the resources to create separate entrepreneurial structures but can implement change very quickly, must allocate time to consider how they can improve their practices through innovation, and then make it happen.
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Terry Graham, M.A., is a legal marketing and public relations consultant. She can be reached at 415/686-8442 or tg@terry-graham.com. Check out her website at www.terry-graham.com
© 2009 Terry Graham. This article may be copied and distributed as is with no changes, and with proper attribution to the author, including copyright and contact information.