Providing more evidence of the continued restructuring of Big Law, the Wall Street Journal’s front page reported that Weil Gotschal has announced layoffs, followed up by Above The Law’s continuing reports of ‘stealth’ layoffs in law firms — mostly of staff and legal secretaries.
This shouldn’t be a surprise to anyone familiar with basic business strategy. As Jim Collins highlighted over a decade ago in his seminal book ‘Good to Great’, one defining characteristic of great companies is that they demonstrate the “Hedgehog Concept”.
The Hedgehog Concept is centered on doing one thing, and being the best in the world at it. The relevant analogy highlights the difference between the clever, devious fox and the simple hedgehog. The fox continually tries new ideas to get the hedgehog, but the hedgehog has just one defense that always works: rolling into a thorny ball and stymying the fox.
In eDiscovery & Litigation: Do What You Do Best
Lawyers are in the business of doing one thing: providing legal advice. Law firms and in-house legal departments attempting to save costs in areas outside of this one thing are playing the fox. This is exactly what happens when in-house technology groups are assembled to handle eDiscovery and litigation support. The goal is to improve the bottom line; but it just doesn’t work.
This is simple economics (guns and butter anyone?). There is an opportunity cost when you do anything. So, if you pick something you aren’t great at doing, you have not optimized your business. The best way avoid this opportunity costs is to partner with companies who are the best in the world at what they do. At Nextpoint, we do not build data centers — we partner with Amazon Web Services, the best in the world at that.
We focus on doing the one thing we believe we can be the best in the world at — using those hosting centers (“the cloud”) to assert control over electronic data for legal, regulatory and compliance needs.
When you partner with the best in the world at something, they do it more effectively and at a lower cost than you could ever hope to. Apple doesn’t build iPads — it only designs and markets them. Would you stroll the aisles of The Home Depot, buy a truckload of materials and build your own house? Only if you were a professional builder.
So don’t be fooled into believing you can excel at everything. The hedgehog always wins.