Scylla and Charybdis

Sophists:

At the moment, a quiet Saturday evening, the seas appear calm and life is good. But on Monday when the focus returns to law practice management, the storm returns, the seas will be violent, and the shores will again appear treacherous. I was reminded recently by Lauren, one of the finest CFOs I know, about the tale of Scylla and Charybdis. As you remember, Scylla and Charybdis are two sea monsters of Greek mythology who were situated on opposite sides of the Strait of Messina between Sicily and Calabria, in Italy. They were located in close enough proximity to each other that they posed an inescapable threat to passing sailors; avoiding Charybdis meant passing too closely to Scylla and vice versa.

Entering into 2009, business and law firm leaders throughout the world (except in North Dakota) are facing the mythological rock and hard place: should staff and capacity be trimmed to contain costs and preserve income, or should capacity be preserved so that when the economy rebounds, the business is in a position to take advantage of the opportunities? Is the economy now at the bottom, so that the current demand for work can be expected to continue? Or will the work fail to materialize? If the bet is placed on maintaining the current staff, the captain is betting that Charybdis will not strike.

If staff is not trimmed, the business will pass too close to insolvency if the work does not materialize. Law firm leaders who boldly pass too close to the Charybdis with too much expense risk will lose the entire vessel. Those who pass too close to Scylla, like Odysseus, will lose a few sailors but save the ship.

Conventional wisdom, for those choosing to pass close to Scylla, is to lay off the optimal number of employees in one single action. Others suggest that it is better to step down the size of staff, by first cutting the most obvious excess capacity, and then, later, if deeper cuts are needed, the next best layer to cut is more obvious.

Those who choose to try to retain all their sailors will pass close to Charybdis. And those captains will go down with the entire crew.

Choose wisely.

Cynthia