In the past 24 hours, I've spoken with the managing partner/chairs of two AmLaw 50 firms, and I heard something from each that I hear altogether too rarely:

They know what their firms are not going to do, or be.

The first put it in these terms (I paraphrase): 

"Our firm is focused on clients in industries A, B, and C.  Period.  We've stated that repeatedly, that focus guides our recruitment, that focus guides what we invest in internally.  I can't tell you the number of times we've had overtures—some of them attractive—to open an office in Chicago or in Atlanta.  But there isn't any A, B, or C industry base in Chicago or Atlanta.  So why are we going to do that?  The answer is that we're not."

The second is in the midst of a decade-long (or longer; the jury is, as we say, out) effort to reposition his firm from a strong and perfectly respectable regional player to a firm with a global footprint, and I'll paraphrase his observations as follows:

"Understanding the drivers of profitability is about more than rates, margins, leverage, and realization; it's about what business you will or will not do.  Too many firms get in a lather about pursuing any hour that's billable; we're more about what we will not do.

"The New York-based 'bulge bracket' firms (Cahill, Cleary, Cravath, Davis Polk, Shearman & Sterling, Sullivan & Cromwell, Simpson Thacher) have known this all along, and they've never diluted the work they do; but the rest of us are still learning how to do this.  Now, when you're in the midst of changing your stripes, you get some pushback from clients.  That requires you to have discipline.

"Ultimately, this links in to how you make decisions about promotion to partnership, and in the long run changing the mix of people leading the firm.   You're going to have to break some eggs to get there; the challenge is to break enough eggs so that you're actually having an impact, but not to break so many that the roof caves in."

I came away from both of these conversations more convinced than ever of the wisdom of the observation (David Maister has made it, although others may deserve equal credit), that Strategy means saying no.

These two firms know how to say no.  Has your firm said no lately?