A firm with capacity is offered work. Some of the work is plainly wrong for the firm, and the answer is easy. Most of the work is reasonable. It pays, it is interesting, it would be defended by a partner reading the brief. The work is not bad. It is simply not the work the firm should be doing.
Saying no to bad work is straightforward. Saying no to good work is the harder discipline. Most firms cannot do it. The pull toward the reasonable engagement is strong, because reasonable looks like prudence. Filling capacity is what most operating models reward. So firms fill the capacity, and over time the firm becomes a record of what it accepted rather than a record of what it chose.
The cost of this is not visible in any single decision. It compounds. The firm that takes the merely reasonable work, repeatedly, becomes a firm whose identity is the sum of those reasonable choices. It is not the firm that was intended. It is the firm that was assembled by accident, one defensible engagement at a time.
The work that does not have to be done is the most important work to identify. It looks like opportunity. It is, often, just noise that has been priced. The firm that can name it and decline it is the firm that retains the shape it intended.
This is not selectivity for its own sake. It is selectivity in service of being the firm the work actually requires. The discipline of saying no to good work is the discipline of preserving the firm for the work that matters.