Not-So-Subtle Complaints Suggest A Problem.
Once the subject of whispered innuendo around the office water cooler, today these not-so-subtle barbs are growing louder, bolder and more familiar. They cut across lines of gender and generation and threaten the very form by which the legal profession does its business, the partnership. Partners have no greater immunity as targets than associates. These complaints invariably include some variation on the following themes: Young people (associates) lack the work ethic of thirty years ago; young people (new partners and associates) are unwilling to trade personal/family time for the commitment required of a professional (remember, the law use to be a jealous mistress); young people (new partners and associates) ignore the “professional” part of the legal profession by, for example, avoiding after work commitments (read necessary, but often tedious, bar association functions); some people (partners) fail to pull their fair share of the load, originating little or no new business, unable or unwilling to bill clients timely, excessively writing off billable time or delinquent accounts receivable, tending to more parochial concerns to the exclusion of the firm’s greater common interest; some people (rainmakers) are simply disloyal, jettisoning twenty year relationships for the glitter of more lucrative, temporal ones; and no one (rainmakers, partners and associates) regularly works on Saturdays anymore.
While the validity of each complaint may be dubious, the more pressing concern is what does the utterance of such complaints - - real or not - - portend? For example, Oldsmobile discovered too late in an ineffective ad campaign touting “Its not your father’s Oldsmobile”, a campaign which, incidentally, heralded the recent phase out of one of America’s oldest car lines, that the complaints – real or perceived -- are not the problem. Complaints - - like aches and pains - - generally are only symptoms of a more pervasive, corrosive underlying disease. In Oldsmobile’s case, apparently it was an inability to compete with superior, less expensive alternatives to an old product line being offered in new packaging. It might fairly be viewed as having been a fundamental blind spot in management’s vision. Treat only the symptoms, as Oldsmobile painfully learned, and the patient will die, eventually, of the untreated disease. Identify and treat the root cause of the disease, and there is hope for healthy growth.
Is the basic problem then that the legal profession has fundamentally changed, that younger attorneys, partners and associates alike, have different and incompatible work ethics, that some partners are simply inconsiderate or, worse, uncaring, about their partners’ interests? Of course not. Indeed, to a large extent there is more than a passing semblance of truth to these observations. Each of these complaints describes, in varying degrees of accuracy, the present resting spot of a staid legal profession in a complex and rapidly changing society. But the complaints are only symptoms. Treat those symptoms as if they were the disease, and the legal profession will suffer, perhaps terminally. Understand what the complaints signify, be able to exploit them to your advantage, and you will have growth and a healthier business, even if that business is the practice of law.
A Solution Outside The Profession.
The legal profession, at least as practiced at any firm that purports to provide “full service”, national and international representation to the business community, undeniably has become a business. In most instances, these kinds of law firms are small to mid-sized businesses doing $ 25 to $100 million annually in revenue. In many others, hundreds of millions of dollars a year enterprises, with thousands of employees/professionals, are the new reality. To a small degree now, but to an ever-increasing degree in the future, these firms compete not only with each other but, at least globally, with major accounting firms, whose legal departments rival in size some of the largest law firms. At some top tier law firms, the title of managing partner already has been replaced by the moniker Chief Executive Officer. Given these trends, we should question instinctively whether a professional with a juris doctorate, trained in the Socratic method of learning, should be at the helm of any of these legal vessels. Should there, instead, be a CEO armed with an MBA in finance or marketing? Ideally, a combination of both disciplines probably makes sense.
What Are We Really Managing?
The legal profession’s stock in trade used to be defined as the ephemeral “work product”, represented nominally by legal pleadings and briefs, corporate filings, SEC disclosure statements, wills, patents, trademarks etc. And while that remains true in some fashion, that really only describes the product that the legal profession produces for the consuming business public, along with the even less tangible dispensed “legal advice”, for which lawyers routinely bill clients - - like no other business - - in increments measured by fractions of an hour.
A law firm’s principal asset, however, is its attorneys, not its work product or the office personnel and equipment (computers, Lexis-Nexis subscriptions, and paper inventory) used to produce the work product. More so than in any other business or industry, law firms deal in human assets. Those “attorney” assets come in different sizes and shapes. Some bring excessive baggage with them. Some are diamonds in the rough, needing polish and care. They are not created equal, nor do they all intrinsically have the same skills and talents. Those assets need to be managed properly, for the enterprise to be healthy.
What once worked successfully as a management tool for law firms, such as, e.g., a fierce kind of laissez faire individualism fueled by the promise of a comfortable living and prestige in the community, may not necessarily motivate today’s “assets” to achieve their optimum performance – optimum in the sense of quality of work product, revenue generation, client satisfaction, and lifestyle fulfillment. In some cases it will. The challenge, therefore, is to effectively manage all of the assets, not just a few and not just the ones that respond well to a particular kind of incentive.
Who Is Best Equipped To Lead?
If the objective is the improved management of human assets and not the practice of law
per se, an attorney is a most unlikely stalwart to accomplish that mission. Most practicing attorneys simply lack the time and discerning interpersonal and business skills (learned in business school) to even formulate a business approach to managing other lawyers successfully, even though they may have managed their own professional careers flawlessly. This is not because managing partners or managing committees are less than brilliant people. It is, however, precisely because they are attorneys and, often, they are the most successful, brilliant attorneys at their law firms. They are skilled at lawyering and, sometimes, the generation of legal business or “rainmaking”. It does not necessarily follow that they can teach others what came so naturally or with hard work for them. And while many good attorneys also can manage money well, that is different from managing a business, let alone managing the people of various limitations and talents that constitute the lifeblood of that business. While most law firms naturally recognize qualitative differences in their attorneys’ skills, for example those who write better than others or those who orate more effectively, the ability to exploit those differences, for the benefit of the firm, more often than not is left to pure chance.
There Must Be An Apt Sports Analogy.
The oft heard complaints about feckless young associates, uncaring partners, and disloyal/greedy rainmakers are but symptoms of the underlying disease: ill-equipped, ineffective, and, too often, misguided management of a business by an attorney rather than by a skilled businessperson. Even the objectively successful legal practices arguably are under-performing and, worse, unpleasant places at which to work.
One example from another field – professional team sports --may prove enlightening. The most successful sports franchises are those in which management, through a combination of financial incentives and personal motivational techniques, extracts from their assets – the athletes – maximum performance. History proves this, even though athletes today have different work ethics and social distractions than had the athletes of a past era. Simply look at the Yankees organization, whose success spans decades of very different problems that have confronted professional ball players. What the successful ones share in common, however, is a management team that finds the keys to motivate each member of the team under the existing conditions of the day. In other words, there is a fundamental difference between being a successful athlete on the field and translating that success into the requisite knowledge and skill needed to coach others to maximize their own personal talent, for the benefit of a successful team. It is a rare athletic superstar who can morph into a successful coach or general manager of a winning sports franchise year after year.
The Likely Benefits Of Professional Managers.
Potential beneficial by-products of more efficient, effective, and business-like law firms seem apparent: competition among the larger firms will increase, as business “consumers” of legal services become more aware of competent alternatives, of niche practice areas in one law firm that may logically be partnered with the expertise of another firm, and of other natural economies that will be imposed upon an otherwise undisciplined profession. Indeed, the ability of a smaller law firm to compete with the mega law and accounting firms might be directly enhanced by the acuity of a law firm’s business manager being matched by the quality of the legal work product being produced. While the legal product of the smaller firm may be superior, without an effective business manager that “product” may never be given the chance to be marketed more broadly and efficiently.
Similarly, application of business principles to the legal profession inevitably will result in the implementation, not just talk, of innovative billing alternatives, in some cases alternatives that are truly driven by cost considerations rather than the more nebulous, sometimes archaic and troublesome, billable hour. But perhaps the greatest potential benefit of figuring out how to responsibly treat the legal profession as the business that it is, will be an opportunity for innovation in a profession inherently resistant to change and new ideas. As witnessed by much of corporate America, innovation often precedes growth. It also positions a business to better accommodate, even in the venerable legal profession, the ever-changing values and lifestyles of trained professionals who work within this law business for sometimes very long lives.
Innovation - - for the profession - - is needed in three areas: (i) how attorneys solve problems; (ii) how the profession treats its professionals; and (iii) how attorneys bill clients for their services. Add to those the ever present dissatisfaction among attorneys with quality and meaning of life/work issues, which are real and are manifested in the complaints being voiced, and the need for an innovative approach at the highest management levels in law firms seems readily apparent.
The Conclusion.
The cure for the disease that afflicts large law firms should therefore seem apparent, although its implementation is controversial and unlikely to materialize soon. Law firms should be managed by skilled business managers. Non-legal management would occur within the constraints traditionally thought necessary to protect the public and to preserve the essence of the legal profession: lawyers would continue to be prohibited from technically sharing legal fees with non-lawyers; potential conflicts of interest would still be meticulously scrutinized; and confidentiality and the attorney/client relationship would remain sacrosanct. None of these public safeguards, however, is inherently inconsistent with a level of business management whose performance and compensation may be measured in the tangible growth of the business.
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