Firm Characteristics and Performance of Law Firms in Kenya: The Role of Firm Strategy

Abstract

Firms in a competitive environment work to outwit, outsmart, outmanoeuvre as well as outperform their rivals. The competitive environment for law firms globally has been in a state of flux in recent years largely informed by the choice of strategy, partner versus firm interests as well as firm size in terms of the number of lawyers. It is argues that, choice of strategy may be made as a result of specific firm characteristics and this would eventually influence organizational performance. The objective of this study was to determine the influence of firm strategy on the relationship between firm characteristics and performance of law firms in Kenya. To achieve this objective, the corresponding hypothesis was formulated and tested at 95 percent confidence level. The study was guided by resource based theory and the institutional theory. Through a cross-sectional descriptive survey, data was obtained using a semi-structured questionnaire. The questionnaire was administered to a sample of 379 law firms spread across the country out of which 356 were filled and returned, representing a response rate of 93.93 percent. The results showed that firm strategy is a strong predictor of performance. Results further show that firm strategy significantly intervenes in the relationship between firm characteristics and performance of law firms in Kenya thus implying that for laws firms to survive and succeed, a proper match between strategy and firm characteristics is expected to have a positive impact on performance.  The study contributes to managerial practice and offer direction for policy makers and the owners of the law firms in Kenya since managers will use the findings of this study to monitor the crucial performance drivers in their law firms with regard to firm strategy. The study therefore recommends since the current study relied majorly on quantitative study which is purely theory testing. Further studies should consider grounded approach through qualitative approach where theory is built from previous prepositions. This could provide a new theoretical framework upon which law firms could be anchored when discussing how their performance could be increased.