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No business has a natural right to exist. Businesses must provide a service or product that the market is willing to purchase at prices that allow the business to attract and retain the capital and labor necessary for ongoing operations. Additionally, they must provide the stakeholders an adequate return on their investment and risk. Some businesses are not able to do this, and they fail. Others do and survive.

There are several elements that have been consistently present in successful turnarounds in which the author has been involved. First, successful turnarounds require a core group of partners to view the firm as “theirs” — something they will stay and defend, something they will sacrifice heavily to protect. There must be a fierce passion to make things happen, to lead, to manage, to be thoughtful, and to do the right things. Conversely, when this element is lacking, there is almost no hope that the organization can right itself.

Second, the presence of a strong heritage and core values is critical. While not an absolute requirement, when present, these values supply a foundation that the organization can return to for solace and direction. The great enduring organizations and institutions are not always greatly successful. They periodically undergo adversity, sometimes so severe that their very existence is in question. Yet they continue and overall outperform (by a wide margin) their most fierce competitors, let alone their industry. They emerge from adversity much changed. However, what do not change are the heritage and core values that form their foundations.

Third, the partners must generally agree to what they want the firm to be famous for, whether for service to a particular industry, for practice specialty or client group, for the way they do business, or for some other characteristic. Much of the turnaround success arises from these fundamental ideas of how the firm wants to be positioned and known in the market. The successful firms will identify their core strengths, who is critical to deliver on those strengths, and then set about to align the firm around those strengths and people. After emerging from the turnaround, those firms then continue to grow based on that fundamental idea. There exists a strategic underpinning to the restructuring and subsequent growth.

Fourth, although returning profitability to a competitive position is of prime importance, maximizing profits is not first and foremost what drives their thinking or actions. In successful turnarounds, the partners understood the need to invest in their organization, to defer current income, and to build. In each situation, these individuals had opportunities to significantly increase and make more stable their personal incomes and wealth. However, to do so would have required abandoning “their” firm--something simply not acceptable. Productivity was relentlessly pursued, but smart investment and improvement to the balance sheet were pursued simultaneously.

Fifth, the successful firms found within themselves a capacity to focus on their clients’ needs and expectations, to deliver consistent and extraordinary service even in very troubling times. They also cared less about what their competitors were doing and more about personal improvement. There was (and continues in the successful firms) a powerful sense that skills, knowledge, and client service must improve each day.

Sixth, the successful firms were able to stop the hemorrhaging of their best talent. When a firm is in trouble, the likely scenario is that first one or two key partners leave, sometimes with others in tow, and almost always with important clients and practices in tow. Then more follow as the concern elevates that someone will be left to turn off the lights. What this does is strip the organization of its most precious assets, leaving ever-increasing mediocrity in its wake. We believe that the talent pool must be stabilized quickly or all is lost (see first element). That said, it is better to shed even key people who would only hinder the turnaround with independent and defiant personalities than to let them continue with the firm where they will present a destructive obstacle to improvement.

These elements were neither universally nor uniformly present in each successful turnaround. Nor did each firm subscribe to the same, or even similar heritage, core values, reputation, or market position. But the successful firms did uniformly embrace most elements described here and worked to achieve the rest.

As the partners of a law firm possibly facing dissolution consider the course of action to pursue, the author strongly advises that each explores his/her personal and collective commitment to these elements. Turnarounds are long, hard work. They require compassion, passion, and relentless pursuit of the objective. At times extraordinarily difficult decisions will need to be made and execution must be swift and complete. Challenges will seem never-ending and the proverbial light at the end of the tunnel will sometimes feel more like the light of an oncoming freight train. The journey is difficult, but it is possible to make it.