Organization Behavior

1. Strategy and human capital implications

A, Baker & McKenzie’s vision and strategy

It is clear that the firm’s vision is to go globally from its first days. It learned that the best way for a law firm to enter in a new market is to follow its clients when they expand operations overseas. At the beginning, Baker & McKenzie followed its expansion strategy aggressively by opening new offices in Latin America, Europe, Asia, and Middle East.

After its establishment, Baker & McKenzie was one of the truly international players. But the situation was changed. Some smaller firms grew quickly in the international market. Also, the service fee that Baker & McKenzie charged its clients is too high for their needs. In the changing condition, the executive panel of the firm quickly identified the problems and implemented some strategies that could help the firm cope with new obstacles and develop a stronger position in the market. Those actions included: sending the firm’s partners to customized business school course, launching key client account program, and announcing a four-point strategic plan.

It showed that under this strategy, Baker & McKenzie wanted to develop not widely but deeply, or saying another way, it wanted to develop by focusing more on quality, instead of scale as in the past. By sending partners to business school, it wanted the partners to manage the firm better, which was also to utilize better resources that they hold in hand.

After several years under this strategy, it showed there were still some deficiencies and the firm’s partners think that the strategy that they were adopting was simply not enough for them to keep developing and flourishing in a quickly changing environment. That’s why in 2004, Baker & McKenzie announced a new strategy. At the center of this new strategy was the idea that the firm now would prioritize to its core businesses to take advantage of them and to utilize the limited capital efficiency. The...