Like many firms, Stradley Ronon watched with trepidation as the economic crisis gained momentum going into 2009. A 200-lawyer firm with its main office in Philadelphia and important mid-Atlantic offices in five other locations, most notably Washington D.C., Stradley shared with firms across the country concerns about client stability, work flow and profitability. When the recession hit in 2008, however, we were well positioned to withstand the shock. With an intentionally regional footprint and low leverage, layoffs and office closures were not an issue and billing rates already reflected the lower cost of overhead. The careful management of expenses was ingrained in the culture, so belt-tightening was minimal and readily accepted.
Unlike many firms, our challenge in this depressed market was strategic, not operational. A new legal landscape emerged with an inelastic supply of legal work, rollbacks in billing rates after 17 years of steady annual increases, some larger firms suddenly willing to compete toe-to-toe on price with their smaller counterparts and buyers of legal services firmly in control of the marketplace. We needed a response to market conditions that was not shuttering offices, trimming costs, terminating employees or reducing leverage. We needed to be proactive — to create opportunity where none had existed before, rather than using expense cuts as our crisis management tool.
