Ronda Muir is participating as a panelist in CCM's audio conference on "Compensation for Client Development: Tracking, Measuring and Rewarding for New Business Origination" being held at 2pm on Thursday, February 18, 2010. To register, please go to http://www.c4cm.com/lawfirm/compensation_client_development.htm.
From Mitt Regan, Professor of Law and Co-Director of the Center for the Study of the Legal Profession at Georgetown University Law Center: "I’m using your piece on 'What the New Law Firm Looks Like' for the Law Firms course that I will be teaching at Harvard Law School this spring. It does the best job I’ve seen of succinctly describing in one place the various trends that are likely to be transforming law firm practice."
So reassuring to see your offspring make it to Harvard!
You too can have the benefit of Ivy League-worthy insight. Now is the time to arrange for your managing partner, executive committee, general counsel or partnership to dialogue with Ronda Muir on what the new law firm looks like and where on that continuum your firm is headed.
Following up on our November 1 entry "The Importance of Glue" is an article by Patricia Gillette, a partner at Orrick, Herrington & Sutcliffe, published December 9 in The American Lawyer, and reproduced below in its entirety.
"The Message That Will Seal Law Firms' Doom: 'It's Nothing Personal'
It's not personal.
This is the current mantra of law firms with regard to their staff members, associates and partners.
"Sorry, first-year associate, you won't be starting work when we said you would. Come back in a year."
"After careful consideration, tenth-year associate, we just can't make you partner yet. Maybe next year."
"We're sorry to do this, twenty-year legal secretary, but we have to cut back on costs and so we're letting you go."
The messages all inevitably are followed by the exculpatory: "It's not personal, it's business."
There is no question that change is coming to the legal profession -- in the way firms are structured for advancement, in the career expectations of associates and in how work gets done. But law firms have yet to come to terms with the fact that these changes might also impact profits, in the same way that changes to the medical profession affected the profit margins of physicians. As such, in many law firms, change is embraced as long as equity partners can continue to earn salaries that will be reflected positively in the almighty profits per partner competition. (And make no mistake that it is a competition, as are most things with lawyers. Thus, we see firms stretching the definitional limits of "profits per partner" as they vie for the top spots on the "list.")
In the resulting wreckage, personal connections are lost. Because what these firms fail to realize is that managing only to the bottom line is a short-term strategy. And while that might be OK with the megafirms that want to see their shadows cast further into the global market and higher up on The Am Law 100, it is not strategic and it ignores the reality of the changing market. Still, large law firms continue to march down this path. And that is the path that has led to the depersonalization of large law firms.
Depersonalization is what allows big-firm associates to come and go freely (no question, when the economy comes back, they'll start moving again). It allows powerful partners to take large books of business to competitors so they can make more money. And, in many of these firms, depersonalization means that quality work plays second fiddle to realization, and good citizenship and mentoring are trumped by profitability.
This phenomenon doesn't stop at the entrance to the law firm. It has spilled over to the clients. The lack of a relationship-driven business model permits clients to be arbitrary and fickle. Historical relationships are traded for "what have you done for me lately" and "how much did it cost." Years of good work and great results are thrown out for the low-cost leader, or a change in the general counsel. Because it's not personal ... not for you, not for anyone, not anymore.
Law firms used to be about relationships. Relationships between partners and partners, associates and partners, clients and lawyers. Law firms used to be about retention and growth of lawyers and client relationships, mentoring and development, loyalty to the institution and to each other and respect for those who came before. Law firms used to be about trust.
That trust, however, has been broken. Witness the demise of giant firms like Heller Ehrman, Thelen and Brobeck -- all big firms that appear to have traded their culture for currency. As a former partner of Heller, I saw our firm, with its rich culture of consensus and collegiality, collapse in part because some partners thought it would be OK to trade core values and firm identity for a moment at the top of a list; because some partners favored the elusive "global reach" over more realistic ambitions; and because some partners chose more immediate returns over the history and tradition of the firm. In big firms that have survived, loyalty is too often defined by the portability of a partner's business, associates are seen (and see themselves) as fungible commodities in whom no one has a stake, and fudging numbers of women and minority associates and partners is justified, if it gets the firm to its rightful place on yet another list.
Is this bottom line/list-driven model sustainable? The answer has to be "No." Because, it ignores what law firms need to fuel their engines: associates who are invested in the firm and the future of the institution. There is no question that the new generation of lawyers is relationship-driven -- social networks define their reality; connecting with others and sharing experiences is their passion. Money is important, but community is more important. Loyalty from young associates cannot be bought with law firm logo-emblazoned swag and big pay checks. It must be earned by good and meaningful work assignments, team approaches and a feeling of being an integral part of the firm.
If Big Law wants to have a sustainable and renewable model, these law firms will have to re-engineer their models. Some law firms are making efforts to do just that by:
Reconnecting with clients for the broader and longer relationship.
Looking at associates as valuable assets that have to be mentored, developed and retained by the firm incentivizing firms to deepen their relationships with associates through active mentoring programs, investing in training and instituting career development programs that recognize and support a nonlinear path to partnership.
Developing a skills-based evaluation and compensation system that rewards teamwork, productivity, quality work, loyalty and competence.
Valuing institutional maturity, diversity and historical contributions along with immediate returns by crediting nonbillable hours spent on broadening client relationships, rewarding partners for retaining associates and increasing diversity, recognizing the need to pass the baton through institutionalized succession planning on client relationships.
Finding ways to truly partner with clients so that law firms and clients have shared risks and rewards by encouraging and supporting alternative billing arrangements, knowing the client's business and recognizing its needs and seconding associates when needed.
Big law firms simply cannot continue to trade relationships with their associates and clients for the prospect of raising profits. In fact, firms that ignore this do so at their own peril. Firm leaders need to recognize that it is relationships and culture that bind people to their firms -- because, for the best and the brightest lawyers in big firms and for the clients who want quality legal work, it is personal."
Thanks, Patricia. Couldn't have said it better.
Muir has been selected by Patrick McKenna (co-author of First Among Equals and Herding Cats) as one of a select group of law firm consultants available to advise law firm leaders under McKenna's ENABLE program--Executive Network of Advisory Boards for Leadership Excellence, which McKenna describes below.
"Now, more than ever, being a Firm Chair or Managing Partner and leading a professional service firm is a monumental task. Even more critical, how do you handle sensitive or strategic challenges when your previous experience has not adequately prepared you?
Corporate CEO’s who have used Advisory Boards rate them as "very effective" as sounding boards and sources of management mentoring. They also give these boards high ratings for offering ideas, influencing strategy, sharing business contacts, and providing business or industry intelligence.
The primary challenge to making Advisory Boards work for professional service firm leaders lies in recruiting and assembling a group of talented confidants willing to serve on these boards and then having an experienced resource available to help firm leaders get their Advisory Boards up-and-running effectively. The ENABLE program is dedicated to those two objectives."
For additional information, contact Muir at RMuir@RobinRolfeResources or McKenna at patrick@patrickmckenna.com.
Muir led an inter-active limited-attendance roundtable on Law Practice Management for Current and Prospective Law Firm Leaders at the 12th Annual Meeting of the Association of Patent Law Firms (APLF) in Chicago, Illinois on Thursday, September 17, 2009. Topics discussed included the distinction between managers and leaders, the importance of values-driven firm identity, the role of practice group leaders in moving the firm forward, and transitioning from consensus-led management to more executive approaches.
Here's some more data that puts into question our reliance on high scores and law school credentials in determining which lawyers we want to populate our firms with.
LSAT Scores
According to a chart prepared by the Tax Prof Blog, math or physics majors are likely to score the highest on their LSATs, theoretically making them the best candidates for law school and the best lawyers.
Or maybe not. As one blogger commented, "At a prior AmLaw 100 firm, I was chastised for not getting the chair of the IP department 'out there more,' writing, doing press. My response, 'The guy has an undergrad in chemistry, then went off to law school. I’m lucky if he opens his door.'
But this blogger goes further: "The BUSINESS of law, and the success of any given individual lawyer, is becoming more dependent on the development of personal relationships, the ability to reach out and promote one’s self, and SALES, [so] we need to remove the barriers that keep those who are so predisposed out of law school." Or, as one article recently proclaimed: "Emotional Intelligence a New Hiring Criterion."
Following that prescription--matriculating and then hiring candidates based on something other than hard scores or law school credentials--would require a much more sophisticated method of discriminating, such as personality testing, as part of law school entry requirements or firm recruitment considerations. Are we ready for that?
We know that rainmakers and managing partners show a different array of personality traits than most lawyers--they are more social, more extroverted, more resilient, more empathic and more persistent--in total, more emotionally intelligent. Should we be populating our firms from the bottom up with more of those traits? Particularly now that one of the survival strategies for practicing law requires successful marketing, business closing and relationship building? And if so, what are the best procedures to insure that we identify a high percentage of the kinds of lawyers we want to hire?
Screening for these rarer combinations of traits might also require firms to look at a broader range of law schools than they typically have--at the very time that the pendulum appears to be swinging back to hiring only from the most prestigious schools.
Premier Law Schools
A recent study entitled "After the JD" by the American Bar Foundation points out some of the benefits of broader recruiting. The study concludes that graduates of non-elite law schools who work at the top 200 firms are happier than their colleagues from top-tier schools and also last longer in their jobs.
Why would that be? It makes sense that lower-tier law school grads would work harder to nail the few BigLaw positions available to them, and, as a result, would be both more grateful for their jobs and also likely to have fewer opportunities to leave. Other pundits have suggested that student who opt for regional law schools are more likely to have stronger family and community relationships that they want to maintain. And that they are also more likely to have financial considerations that militate in favor of attending a less expensive law school with the possibility of working part or even full time. Strong relationships, financial savvy, self-regulating drive--maybe our kind of candidates?
But regardless of how good it is for us, recent market pressures may in any event make firms drop the broad-barreled recruiting approach.
As Aric Press in The American Lawyer points out: "I fear that we will look back at the exuberant spree of the last few years as the high-water mark of non-elite law school hiring. There simply weren't enough bodies to go around, so the Big Law machine was willing to expand its recruiting pool. The fact that some of those hired performed well, or were happier with their lots, or possessed the drive and emotional intelligence that clients crave will not be enough to change old habits. When it comes to preserving the prestige patina, sometimes the rules of cognitive dissonance are suspended."
Press also reminds us of the opportunity these kinds of findings afford those firms who are thinking about their future and trying to insure its success--"an opportunity for the firms wise enough to seek first-class talent no matter what brand is on a diploma. Putting that attitude into practice would be an important part of an effort to take hiring more seriously, of not relying on admissions officers to do the work of hiring committees, to actually define attributes that firms and their customers need--and then try to recruit for them. Rather than retrench, this is a moment to put your partners to work on the future of your firm. As it happens, they have plenty of time to devote to the project."
Informal Survey
Let us know what you and your firm are doing in two areas of recruiting:
1. Have your target law schools broadened or narrowed and why?
2. Have the attributes you are looking for changed? In which ways? And how do you identify those attributes in candidates?
Stay tuned.
An article this summer in the New York Times Magazine describes the launch by Hyatt Hotels of a customer relations program that CEO Mark Hoplamazian describes as "random acts of generosity." Prompted by years of behavioral science research and months of consumer research, the program charges Hyatt employees with occasionally picking up bar tabs and other obligations of customers free of charge. The point? To generate gratitude. Which ultimately "increases... sales growth," as the Journal of Marketing quite bluntly puts it.
Unlike frequent stay programs with specific qualifications that reward customers with an extra night or an upgrade, these Hyatt freebies are not "earned," and are therefore theoretically more likely to be truly appreciated. Although there is a risk. There is, after all, as the Times article points out, a thin line between promoting gratitude among the favored and creating resentment among those left out.
So is this a viable relationship-building model for us in the legal business? Is there any possibility that some sort of generosity extended to our clients could engender the type of gratitude that would fall to the bottom line? And even if it were possible, how specifically are we supposed to be generous in the context of what sometimes amounts to cut-throat dances with resentful clients who are convinced they are being taken advantage of ?
While a young associate at a big firm, I was charged with the closing of a deal that had been a nightmare from beginning to its not-too-soon end. The client had originally chosen another firm that had been conflicted out, hiring us begrudgingly and making sure we knew through the entire timeline that we were not their first choice. The General Counsel was young--an interim replacement for the GC who had taken a better position--and afraid of losing his job. Aggressive questioning of our strategy and reasoning was a daily event, followed by further questions rechecking the initial explanations, followed by very obviously running past us the reasons unnamed others (lawyers from the favored firm?) thought we were making an error. It wasn't a major transaction we could boast about, we were certain not to be able to recoup the time we were investing, it was a client we obviously were unlikely to hold onto--we all longed for the closing to put us out of our collective misery.
The closing followed of course, as night the day, the same pattern of dysfunction. Late in the night the GC called to complain about our printing of a report, which was commencing as we spoke, to be distributed with a collection of other documents--an important Senior Vice President had that day located sufficient copies of that very report boxed away in the corporate basement. Had we no concern for expense? Canceling the new run would have involved a lengthy and not inexpensive transition, of course--but. I was looking for some small way to connect with this company. We got the printer, the SVP and the GC on the line and as the most senior lawyer left standing, I negotiated what we all knew would be a cumbersome and more time-consuming but ultimately somewhat less expensive solution using the found reports.
The partner in charge questioned my judgment after I straggled in the next day--primarily on the grounds of throwing more good time after bad. My only defense was that our two main company contacts--the GC and the SVP--really wanted the face-saving, if nothing else, and, with primarily the investment of a few more hours, we could accommodate them.
There is, of course, a happy and relevant ending. The matter closed. The interim GC quickly announced that he was moving to a GC slot at another company. The SVP became the one responsible for approving our bill and recommended that the company use us instead of the other firm as its ongoing counsel. The GC, in his new position, brought us his next major deal, evidently with the intent to use our firm on a consistent basis. The partner called me back into his office and praised the judgment he had earlier found wanting. All because we figured out how to use the reports in the basement.
So sometimes the incidental gesture produces a gratitude that rewards. Particularly in this economy, I would say it is worth the try.
Now is the time to really get to know your clients. What are their budgetary constrictions? What are their priorities for the next two years? What do they want more of and less of from their outside counsel? What keeps them awake at night?
Do you not only know the answers to all of these and other questions but are also proactively doing something about each of them?
In a recent article in The Legal Intelligencer entitled "Firms, GCs Starting to Talk the Talk," Gina Passarella reports on the growing awareness of law firms of the necessity to dialogue with their clients about their delivery of legal services.
As Lorraine Koc, general counsel of Deb Shoppes, notes, "the idea of communicating with clients is something that virtually every business does except for law firms."
Some firms realize the importance of addressing that, particularly in the context of this economy. "If you don't have communication and [clients] can't tell you what they like and dislike, then you're leaving them one choice and that's to leave," Flaster Greenberg managing partner Peter Spirgel says of the reasoning behind their hosting client panel presentations.
Reed Smith has held a client panel at every one of its firmwide meetings since at least 2000. The firm also surveys clients at the conclusion of large matters and survey its largest clients regularly. Managing partner Gregory Jordan also meets with clients regularly to learn more about their businesses and get feedback on the firm's work.
What is the best approach to determining client feedback and where do you start? Which clients do you include? How do you format the inquiry? In a forum or with each client individually? Who inquires and what questions do you ask? What technology best assists the inquiry? And, most importantly, how do you translate the information you get into substantive improvements in client delivery?
Our firm provides unparalleled expertise in assessing and cementing relationships between law firms and their clients. Now is the time. Let us help.
In the April 20, 2009 issue of The New Yorker, James Surowiecki recalls that during the Depression (the one in the 1930s) Kellogg and Post, but primarily Post, dominated the cereal market. In response to uncertainty, Post reined in expenses and cut back on advertising. Kellogg, on the other hand, doubled its marketing budget. “By 1933, even as the economy cratered, Kellogg’s profits had risen almost thirty percent and it had become what it remains today: the industry’s dominant player.”
During hard times, Surowiecki points out, most businesses act like Post in order to preserve what they have. “But there’s a trade-off: numerous studies have shown that companies that keep spending on acquisition, advertising, and R. & D. during recessions do significantly better than those which make big cuts.” They also maintain those gains well into recovery. “[R]ecessions create more opportunity for challengers, not less.”
Why do most businesses insist, then, on pulling back? Surowiecki suggests the uncertainty that so dominates recessions makes any business outcome calculations unlikely to be reliable. Unable to gauge risk, managers forego the gamble.
Certainly there are managers who risk “sinking the boat” by boldly forging ahead, but there are others who “miss the boat” by failing to do so.
Innovation may be coming to law firms the hard way—prompted by crippling economic conditions. As pointed out in our entry “Fearing Fear“ on February 9, a natural reaction to the downturn is fear, which often neurologically prompts “pencil counting,” or furiously holding on to whatever you still have. Fortunately, if you push through the fear, there is the possibility of another response, and that is creative innovation. So far there are not any major revisions to the business model, to be sure, but at least there are some spasms of change.
Law firms are notorious lemmings, hesitant to do anything everybody else isn't doing. But in this downturn firms are starting to take more individualized approaches to managing their businesses, particularly with respect to reducing their largest expense: compensation. Reducing compensation costs through across-the-board associate salary and bonus freezes, delays, or cuts, jettisoning practice groups that are not deemed profitable or imposing layoffs have been the most common steps taken. Another approach is a reduced hours work week--targeted, across-the-board, or by invitation to those who want a period of work-life balance that errs on the "life" side. Even “furlough,” a fancy corporate word for temporary unemployment, is appearing in the downturn vocabulary of law firms, with the promise of holding on to talent for when business returns.
Pillsbury, one of the firms whose layoffs were outed by Above the Law because of a partner's indiscreet cell phone conversation on a commuter train, has preempted those layoffs with a “voluntary departure plan” for lawyers who want to leave of their own accord.
But some firms are also paying new associates to arrive later, to work at public or non-profit organizations, or to be seconded to clients, a move that can cement wobbly client relationships.
Another approach is to manage compensation by changing or expanding tiers. A number of firms have de-equitized partners and quite a few are considering thinning their non-equity partner ranks by moving those attorneys into different tiers.
WilmerHale is putting more steps firm-wide on its attorney ladder. To the titles of associate, counsel and partner will be added senior associate, special counsel, senior partner (for those approaching retirement) and senior counsel (for partners practicing beyond normal retirement age). Co-managing partner Bill Perlstein hopes the move will increase flexibility and allow attorneys a greater choice for their career path. Given increasing attorney preferences, particularly among Gen Xers and Yers, for more personal control over their schedules, additional tiers, if announced and managed thoughtfully, can help create a more satisfied, productive team.
Partner compensation is often the “untouchable” at firms, but even there, change is in the offing. Chicago firm Much Shelist Denenberg has announced a temporary across-the-board 10% pay cut for all lawyers, partners as well as associates, through the end of its fiscal year. Sharing the pain can promote those firms that pride themselves on their egalitarian treatment of all lawyers.
Patton Boggs recently announced that it is replacing its “eat-what-you-kill” partner compensation system with one that also rewards cooperation and firm-wide business development, associate mentoring and training, and moving clients to the next generation of client managers. The compensation review will look back three years instead of two to give partners longer to realize on business development efforts. Under this system, a partner’s income cannot fall in any given year more than 25%. Over 90 percent of equity partners voted for the change, which managing partner Stuart Pape called an “incentive for doing things that are supportive, collaborative and productive…In bad times, a meritocratic system is absolutely the best model.”
On the other side of the pond, similar tactics, and innovation, prevail. Allen and Overy, when axing 450 attorneys and staff, announced that it was spinning off part of its practice, imposing a pay freeze and asking remaining partners to each contribute an average of about $50,000 in additional capital to the firm. That move is expected not only to boost the firm's coffers but to raise the commitment to the partnership and its success of those partners willing to put their dollars there.
Doing It Right
The way that these initiatives are both announced and carried out have a major impact on firm culture and morale. Latham & Watkins’ stunning announcement recently of layoffs of 12% of its associates was accompanied by very generous (six months compared to three months) separation payments and health insurance, as well as interim salaries for new associates who delay their entry a year. In spite of the severity of the layoffs and questions about what the firm will look like in the future, the street buzz on the firm's handling of the layoffs has been positive—“classy” is Bruce MacEwen’s assessment. Similarly, the Philadelphia District Attorney's Office rescinded offers to its incoming attorneys only after several attempts to cut costs, and, when the inevitable occurred, actively sought jobs at other DA offices for those dis-invited, hoping to preserve relationships with lawyers who they might one day want to extend offers to again.
Latham and others have also received kudos for making the cuts in one whack instead of dribbling them out, as Dechert, for example, seems intent on doing. Although the realities of the downturn may drive some firms to second and third whacks. In one of the largest cuts of this layoff season to date, Orrick sent home 12 percent of its nonpartner lawyers on Tuesday, the second cut after a November 2008 one that promised to be the one and only. Those laid off Tuesday didn't fare as well as those cut in November: they got three months' severance instead of five.
Sign of the Times or Window into the Future?
Are these fairly modest innovations we are seeing now simply a sign of these difficult times, or do they signal a growing snowball of changes that could well roll far into our future?
These changes are not in and of themselves going to make any major inroads on the broken business model that now exists, but hopefully they signal a greater willingness (ok, motivated by a gun to the head) to get out there and slog through the swamp of uncertainty until we find firmer ground.
Experimentation is what will drive innovation, and up till now law firms have been fat and sassy enough to be able to afford not to experiment. But the old "one size fits all" attitude about how firms should be run is beginning to fray. Unusually bad market conditions have freed firms to stop copying what everyone else is doing and look more carefully at and respond more creatively to who they specifically are, where they are headed and what resources and skills they need to get there.
Given the layoffs across the country, if a recovery is not in motion soon, the next issue for firms to grapple with creatively may well be the dissonance between recruitment and retention that the current structure produces. How long can firms withstand waves of painful and expensive "forced attrition" at the same time they are undertaking time-consuming and expensive recruitment and training of new incoming associates, who may well then be forced to move on in a few years?
After arrival dates, compensation, bonuses and tiers have been manipulated, we can then start facing the decisions that will direct innovation toward the very structure of our firms and the traditional lawyer life-cycles there.
On February 18, 2009 Muir will lecture students at Northwestern University's Business Institutions Program on how to improve management decision-making. Based in part on the article "Promoting an Effective Board or Management Group," the discussion will explore, among other subjects, optimal personality traits for good decision-making, constructing effective teams and avoiding extreme decisions.
The news is out: "Law is becoming more of a business." That was the headlights line by David Lat, founding editor of AboveTheLaw.com, in a January 25, 2009 New York Times article about the salary freezes, layoffs and dropping profits in the legal marketplace. Lat adds, "And you will see more of an emphasis on results than in the past."
Surprisingly enough, that realization seems to be downright radical, and a gathering consensus to that effect may mark a tipping point, pushing the conception of legal practice into a brave new future.
Certainly some firm managers will respond by taking out their calculators and trying to quantify their way to results--slashing salaries, reducing pencil-count. Jones Day partner Mickey Pohl advocates refocusing legal services on providing "business-focused solutions." The job of a law firm is not to solve "a legal problem," he contends. "It's to approach a client's legal situation with an eye toward the overall health and strategy of an ongoing business, a business that has to worry about remaining in existence; satisfying customers, shareholders, and stakeholders; staying acceptably profitable; protecting its reputation; and resolving litigation disputes in a cost-effective manner." In short, brilliant legal strategy, at least in isolation, can make for poor business solutions for a client.
We counsel both our law firms and individual lawyers that "getting the right answer" is only a small factor in the successful practice of law. Getting it right in a timely manner, getting it right in a way that best serves the client from a holistic viewpoint, getting it right so that the client understands and appreciates the answer, and getting it right in the method of delivery and followup are other critical parts of providing valuable professional services.
According to a pundit at Law and More, "there is a downside to recognizing that law is a business and that it should be focused on the business of its clients. For one thing, the specialness of this profession ends... it loses its protective aura... Instead, it stands out there like, well, any other brand, competing for attention...In addition, lawyers, even the most legally adept, will be called upon to put a human face on new business development, ongoing client interaction, and being influential with all other constituencies, be they judges or government agencies."
"Yet, this [skill] remains alien to many prominent lawyers...They address me in legalspeak or, worse, in the top-down tone and content of those who know far more than I but are patiently taking the time to bring me along. They lack more than a conversational mindset. They are downright deficient in Emotional Intelligence [EI]. Boosting EI of the individual lawyers, the law firm, and the classes in law schools seems like it's job-one in the business of law."
The data demonstrating the challenge most attorneys face in emotional intelligence is already in. Fortunately, emotional intelligence, unlike IQ, can be improved through training, but most law firms have not considered it worth the investment. But not only will the type of interpersonal style described above fail to obtain, keep and develop business, we also know that it clearly risks alienating the client to the point of litigation. Research shows that more than 80% of malpractice lawsuits against doctors can be predicted by examining not the doctor's education or skills, but simply the tone of the doctor's interchange with his/her patient: a tone of "dominance" places the doctor at extremely high risk for a lawsuit. And who but lawyers know how to pitch dominance to an off-the-charts level.
We are being pushed to explore taking bold new steps on every front that has historically defined our profession. Compensation is being overhauled, partnership structure is adapting to the demands of the times, the billable hour is under siege, real estate is being reevaluated and leverage is under scrutiny. But perhaps one of the most radical steps that may come from considering legal practice to be, after all, a business is the one that pushes us to educate ourselves and our attorneys in the fine, perhaps once known but now lost art of providing service.
This is the time of year when many of us take stock of our direction and goals and make plans to step up our effectiveness. This particular year, 2009, many lawyers are facing an extremely difficult once-in-a-century marketplace for which no one has been truly prepared. So we may also find ourselves questioning our ability to successfully grapple with the challenges ahead.
How to acquire the skills that will improve your practice and advance your leadership in such a disorienting environment?
The old adage of two heads being better than one is born out by the data available on the results of coaching. According to a January 13, 2009 article by Susan Letterman White in The Legal Intelligencer, "a research report by Diane Coutu and Carol Kauffman in the January Harvard Business Review found that coaching is a business tool most often used to develop the capabilities of high-potential performers or facilitate leadership transitions," and one which produces quantifiable benefits. "The Journal of Occupational and Organizational Psychology has reported that coaching leads to higher interview ratings for individuals. Telecommunications Weekly reported in November that a change program, which included coaching, improved customer satisfaction by 10 percent and call resolution rates by 56 percent at Motorola. And according to a 2008 article in The Chronicle of Higher Education, coaching of university faculty improved the writing process of professors who were under pressure to publish."
As Ms. White states, "coaching is to a lawyer what organizational development is to a law firm; they both foster intentional change toward particular goals through a collaborative process. The goals are those that move the client to a higher level of professional effectiveness...Most importantly, a good coach is paid to ask the right questions."
In addition, a good coach is one who listens.
Sheryl Axelrod of Hepburn Axelrod & White, a Philadelphia firm, was quoted in the article as extolling the benefits of coaching in a law firm context. "We worked with a coach who had an uncanny ability to not only listen to our needs, fears and desires for our firm, but our own internal dilemmas and concerns about each other."
Of course, after listening, a coach must also be able to help coachees arrive at and implement beneficial changes. And those changes are sometimes unexpected. In the Hepburn Axelrod case, "one of our partners...reach[ed] the difficult decision to leave the partnership."
But the proof is in the pudding. "The result of the coaching is that our firm, on our own, and our former partner, on his own, are each thriving in a market in which most firms are doing worse, not better, than the year before, " Axelrod said.
Quantitative evaluations of coaching are rare, but those that have been done demonstrate conclusively its effectiveness and bottom-line contribution. In an evaluation by MetrixGlobal of an executive coaching program provided by the Center for Performance Excellence in 2004 to Booz Allen partners and principals, results indicated that "all leaders readily applied what they gained from their coaching experiences to make significant strides in self-development, while over half (53%) made significant improvements in their relationships with peers and team members and some leaders (19%) went on to significantly improve client relationships; gaining greater clarity about how their behavior impacted clients and being better able to respond to client issues."
Of eight business areas senior leaders expected executive coaching to impact, "two were found to be positively impacted by at least half of the leaders who were coached: teamwork (58%) and team member satisfaction (54%). Three other areas were selected by 31% of the leaders as having been impacted: quality of consulting, retention and productivity."
Monetary benefits were rigorously documented in this evaluation. "The total monetary benefits were $3,268,325 with four impact areas each producing at least a half million dollars of annualized benefit to the business: improved teamwork ($981,980), quality of consulting ($863,625), retention ($626,456) and team member satisfaction ($541,250). Given a total, fully loaded cost of the coaching of $414,310, the ROI was 689%."
Coaching can provide to all lawyers the simple but valuable assistance of a supportive yet out-of-the-law-firm-box perspective that can be critical when steering through dangerous waters--and that can positively impact the bottom line. That perspective can help you become a more effective partner, develop individual business, expand your expertise, master management responsibilities and otherwise plan and implement the next step in your career (whether you are motivated to do so proactively or reactively).
At RRR, we offer confidential high-performance coaching programs of six to eighteen months that are tailored to your objectives and your schedule. Contact us for a consultation on how we can help you achieve your goals in 2009.
Happy new year!
Results from two surveys show growth at the country’s largest law firms to be down significantly in 2008 although employment is generally still on the rise. The National Law Journal’s 31st annual survey of the NLJ 250 reports that those firms added 4.3% more attorneys in 2008, consistent with increases in 2006 and 2005 but at a lower rate than 2007’s 5.6%. Partner growth in 2008 averaged 3.5%, which was down from 4.6% in 2007 and 5.1% in 2006. Non-equity partners increased 9.2% compared to 2007, when their ranks increased 8.2% compared with 2006. The average number of women partners stayed stable.
The West Peer Monitor Index, a measure of legal market conditions, reported in late November that large law firms had the lowest productivity during the third quarter of 2008 since keeping records, on average down 4.5%. Productivity at the largest firms, the AMLaw 100, was down even more--6.5%, largely as a result of continued increases in hiring at a time when there is less (particularly transactional) work for those associates to do. Often it takes two years for large firms to respond to market conditions in their hiring practices.
According to the Index, average associate hiring at all firms declined 6% in the 3rd quarter of 2008 compared to 2007, with firms offering equity partnerships to half as many attorneys as they did last year (including mega-firm Mayer Brown, which recently announced making 27 partners worldwide compared to 43 last year). Average lateral growth remains comparable to 2007.
Billable hours for all firms dropped 2.5% in the 3rd quarter after declining 2% in the second quarter. Overhead expenses grew 6% compared to 8.3% in the 3rd quarter 2007 and direct expenses grew 8% compared to 9% last year.
The short-term tact many firms are taking now is to lay off lawyers. According to the U.S. Bureau of Labor Statistics, 7,300 lawyer jobs were lost nationally between June and October, with an expectation of far more shrinkage when November and December numbers are tallied.
Big firms, and particularly the big New York-based firms who draw much of their work from transactions for or financed by Wall Street financial institutions, have been particularly hard hit, and are responding accordingly. The tally of recent attorney layoffs from New York offices includes 96 lawyers dropped from Cadwalader, Wickersham & Taft, 20 from Clifford Chance, 40 from Orrick, Herrington & Sutcliffe, 35 from Proskauer Rose, and 70 from White & Case. Clifford Chance attorneys have been quoted questioning whether it's worth having a New York office at all. The fact that major transactional firms--Heller, Thelen, and now Thatcher, Profitt--have already folded this early in the recession may well presage more big firms collapsing in 2009.
Freezing salaries, as Latham & Watlkins has announced, and cutting bonuses in half and eliminating special bonuses, following the lead of Simpson Thacher, Davis Polk, Skadden Arps, Cravath and others in the US and Allen & Overy and Clifford Chance in the UK, are among the other responses to all this bad news, as well as cutting staff, reevaluating off-shore back office services, and trying to offer more flexible fee arrangements. The recent explosion of non-equity partners is also being scrutinized for its impact on firm finances during these difficult times.
Hard-pressed law departments are taking another look at the pros and cons of outsourcing, as well as insisting on more accommodation from their firms on staffing and pricing.
There are a few benefiting from the downturn. The work of outplacement firms has expanded exponentially and attorney recruitment firms have had an influx of talent. In recognition of this growing pool of lawyers, LegalOnRamp, among others, has added a legal positions component to its site. So those firms looking for talent are at an advantage now.
Is there any silver lining? Firms can take this time to experiment with different fee arrangements and also to shore up organizational fundamentals--enhancing performance evaluations, professional, leadership and business development training, and succession plans--so as to be better able to weather the continuing storm, and to be poised to take advantage of the economic improvements that will eventually come.
Although some pundits are claiming that the economic impact on the law business hasn't been as disastrous as first expected (which we may have to wait a while longer to fully evaluate), there is no denying even at this stage a sea change of sorts---if only that the current fear and trembling in the legal community, historically one of the most economically stable professions, will cast a long shadow over firms as they embark on 2009 and the years to come.
There is no denying that Gen X and Y are most comfortable interacting via technology--IMing, texting, emailing--possibly to the detriment of their face-to-face skills, as some contend. Employees in large corporations have come to use this technology, particularly on line social sites, as a way to form community and communicate within vast, impersonal organizations. IMing with the Senior Vice President about favored jazz albums instantly creates up-and-down-the-ladder rapport and also an enhanced commitment to the organization.
Associates at most law firms are also making use of these technological avenues of communication. Most firms have official or unofficial firm social groups on MySpace, Facebook and other sites. Ning is a private interactive social networking site that several IT consultants recommend as a good site for law firms to use. It allows participants to chat real time and also post documents, and the software is free.
Some firms have banned these social groups while others have embraced them. On the positive side are the potential gains in networking, which Paul Lippe, CEO and co-founder of Legal OnRamp, claims "is the number one predictor of a lawyer's income," as well as an increased sense of community and therefore commitment. Curtis, Mallet-Prevost, Colt & Mosle uses Facebook as a recruiting tool and an "I'm in Love with MoFo" site probably hasn't hurt Morrison & Foerster's recruiting either. Of course, these sites, largely unsupervised and unsupervisable, also provide renegade employees with the perfect weapon to embarrass a firm. As do the multitudes of privately run, individual blogs that comment on particular firms or corporations. See, for example, our February 26, 2008 entry entitled Decorum, Virtue and Other Values in the Age of the Internet, which recounts Skadden Arps public shaming of two Skadden employees for their (unofficial) blog contest for the "Hottest Female Associate."
Microblogging offers an alternative to these social networking sites, with entries that can be relayed not only on line and by email, but also as text messages over cell phones. The degree of privacy varies as to both the individual's information and that of friends or followers.
Twitter, the leading microblogging network, has become a household name with its contribution to the Obama political campaign and its on-the-spot reports on tragedies like the Mumbai terrorist attack. Started in 2006 and with over 3 million people using its free service, Twitter has no revenue, even from ads. When you log on, the question that first appears and that you can use 140 characters to answer is "What are you doing?" Twitter boasts such regular "twitterers" as Benjamin Netanyahu, the leader of the Likud Party in Israel and Kevin Rudd, Prime Minister of Australia, as well as Shaquille O'Neal, Center for the Phoenix Suns and John Cleese, the actor and comedian.
Yammer is a new and smaller microblogging site aimed at business customers with the stated goal of making offices more productive--when a user logs on, the first question is “What are you working on?” Yammer charges $1 per user when a company joins, although anyone with a business email address can use Yammer free. Membership gives the business administrator the decided advantage of some control over security and how the site is used.
Apart from the networking, communication and recruiting advantages, these constant technological interchanges among a growing group of contacts offer a glimpse into the business model that is likely to become more and more the norm for lawyers and their clients. In a global age that threatens individual anonymity, social sites and microblogging permit personal, even intimate relationships to form and thrive around the world, regardless of where the individual IPs or mobile devices are geographically located. And it is relationships, however they are formed, both within law firms and with their clients, that will drive the future of the legal business.
At the meeting of the American Bar Association's Law Practice Management section today in Tucson, Arizona, Muir was presented with the 2007-2008 Law Practice Magazine Edge Award for Bronze Feature Article for her article in the July/August 2007 issue of the magazine entitled "The Importance of Emotional Intelligence in Law Firm Partners." The Edge Awards are sponsored by Edge International, and each year recognize excellence in writing for the magazine.
It isn't a tardy response to Dick the Butcher's rallying call in Shakespeare's King Henry VI to "kill all the lawyers" that may end it for us, according to the forthcoming book The End of Lawyers? Rethinking the Nature of Legal Services. Richard Susskind, Emeritus Professor of Law at Gresham College, England, IT adviser to Britain's Lord Chief Justice, recipient of an Order of the British Empire award, and consultant to a number of leading law firms in Great Britain and abroad, contends it is rather our own stubborn resistance to the metamorphosis of the business and technological world that will do us in.
"I write not to bury lawyers but to investigate their future...in the face of challenging trends in the legal marketplace," Susskind assures.
Let me paraphrase a few of his points from excerpts of his book.
Ignoring The Future and Its Technology
Susskind, also author of The Future of Law (1996), says that during the more than 15 years he was Executive Editor of the International Journal of Law and Information Technology, not once did he receive a submission of an article on the nature of legal practice in the long term. Governments, managing committees and law schools are not worrying about the fate of the profession for the next generation, in his opinion. The assumption is that the profession will continue to look like it does today-- skilled professionals dispensing consultative advisory services on a one-to-one basis. While major oil companies have strategic plans in place for the next 50 years, very few lawyers look beyond the next five.
But the profession is on the brink of a fundamental transformation, in Susskind's opinion. Within the next 10 years, he contends, all manner of legal guidance and resources, barely imaginable 10 years ago, will be at everyone's fingertips. The last 10 years intimates the kind of progression that can be expected in the next 10. Technology today already makes the expanding web of hyper-regulation--vast interconnections of complex regulations--manageable. They become search-able, reportable and the questions raised resolvable in microseconds compared to the old system of researching and reviewing regulations and case law. Commoditization and technology will likewise reshape 21st century legal services, making conventional legal advisers less prominent, even to some extent invisible.
The market is increasingly unwilling to tolerate legal expenses born out of inefficiency. So the challenge is to identify lawyers' distinctive skills and replace the rest by advanced systems or less costly workers. The already apparent tendency of lawyers now to point to their negotiating, deal-making, counseling, risk management, even therapeutic skills, over their mastery of black letter law shows the great tide of recognition of the sinking value of black letter lawyering, which can be increasingly standardized, systematized, packaged and even commoditized without the bespoke handling of an expensive lawyer. New age lawyers will combine law with some other substantive expertise (like IP, for example) and there will be a new cadre of legal knowledge engineers, whose specialty will be to access, manipulate and package relevant law.
The Potential Impact of Non-Lawyer Investors
For the first time in England, non-lawyers will soon be able to invest in law firms. Delivery of legal services will be a very different business when financed and managed by non-lawyers. It is improbable that investors would put money into the traditional law firm business model, with its hourly billing, expensive premises, pyramidic organizational structure, etc.
Savvy business people will surely find that traditional law firms are over-resourced, with enormous duplication of effort, and with too many smart lawyers and too few smart systems. A revolution in delivery will quickly take advantage of the most profits to be rung from high-volume, low-margin consumer legal work. It has been determined that of 10 billion pounds of consumer-based legal services business in Britain, 6 billion could easily be captured by common consumer outlets, like supermarkets and banks.
Companies are starting to decompose the components of their spending into high value, big ticket and other matters. With $40 billion currently being spent on engaging the top 100 US law firms alone, there is likely to be some potential for savings. Big law firms feel smugly secure in their bet-the-ranch niche, but among general counsel it is clear that if new legal businesses emerge offering quicker, more convenient, less costly alternatives, their companies will embrace them. And the incentive is there for those businesses to emerge.
Confident In Our Naivete
Lawyers' confidence that "disruptive legal technologies," such as document assembly and review, personalized alerting, on-line dispute resolution and open-sourcing, will not impact their practice is only matched by their lack of familiarity with these trends and their naivete.
The American Bar Association has announced that Ronda Muir's cover article in the July/August 2007 issue of Law Practice magazine, entitled "The Importance of Emotional Intelligence in Law Firm Partners," has been awarded the 2007-2008 Law Practice Magazine Edge Award for Bronze Feature Article.
The Edge Awards are sponsored by Edge International, and each year the awards recognize excellence in writing for the magazine.
Muir will be presented with the award at the Tucson, Arizona October 16-18, 2008 meeting of the Law Practice Management section.
Lawyers are introverts, big time. According to Myers Briggs Type Indicator (MBTI) results, almost 3/4th of lawyers, compared to only 1/4th of the general public, are introverts. That means they go inward to charge their batteries-- preferring internal introspection to external interaction.
On the Caliper Profile personality test, lawyers also rank astonishingly low in the sociability trait--which measures how comfortable a person is initiating and building close relationships. Low sociability scorers are less inclined to enjoy interacting with others, preferring to spend more time with information.
Of course, we know that lawyers are thinkers--they think, analyze documents and deals, edit and write, all loner tasks. In a recent study, lawyers ranked sixth overall on a list of the 200 best jobs for introverts, just behind the loner braniacs who work as computer software engineers and accountants.
The question for management becomes how to integrate these loners not only into a coherent, committed organization but also into the 21st century vision of service delivery: coherent, committed teams. How do you overcome/compensate for the introverted nature of lawyers in day-to-day management, business development endeavors, client service?
Slowly. Start by using the strengths of introverts--such as their tendency to (appear to) listen and to deliver well-thought-out opinions-- and proceed from there logically to the overwhelming consensus from research that collaboration improves productivity and satisfaction.
Regardless of your politics, the last year has been a fabulous display of woman-power in the political arena. For the first time in American history, a woman was a major contender for her party's presidential nomination, and came damned close to winning it.
Without Monday morning quarterbacking her entire campaign, there are some interesting nuggets to retrieve from her run, perhaps telling us something about the future of women in politics and in power generally.
As someone who assists women lawyers in developing good business producing skills, I was interested to see the following note about Senator Clinton in the Sunday, June 8 New York Times:
"Unlike her opponents, Mrs. Clinton refused to make solicitation calls to donors and had to be talked into calling the party officials known as superdelegates."
Sound familiar? Hesitation to make direct appeals for support is a recurring theme in the work I do with women. Results should speak for themselves, they say. I shouldn't have to ask. Who wants to be a squeaky wheel? Men, on the other hand, I find, tend to take the attitude that if they don't ask, how can someone say yes, and that if they are not the ones to champion their own cause, why expect others to?
What seems to underlie the hesitation on women's part to "ask" is a fear of having to deal with rejection and also an uneasiness about putting the relationship at risk. What if they say no? What do I do/feel? And what happens to our relationship then?
There is an argument that this kind of sensitivity makes women better in the relationship building department, a critical part of developing business. So is this a tendency that should be overcome or preserved? The answer is both. The sensitivity should be protected but the kind of fear that immobilizes should be allayed. Good relationship builders know how to keep the relationship even if there are disagreements. Good relationship builders survive rejection and help the relationship survive as well.
Learning and believing the self-talk and attitudes that help overcome the hesitation is one way to start coping with the fear. Taking the risk and then seeing that the results are not as scary as anticipated also helps. It is a matter of venturing into the unknown, or what has been projected to be a distasteful known, with good intentions and a willingness to listen. So you get the benefit of both high sensitivity and, hey, if you don't ask, how can they say yes?
At a time of some idling in the legal industry, a good use of lawyer time may be to spiff up the old pro bono program. Davis Polk & Wardwell recently announced the addition of Ronnie Abrams, former Manhattan US Attorney's Office prosecutor and daughter of renowned First Amendment litigator Floyd Abrams, as its first Special Counsel for Pro Bono. She succeeds a former associate of the firm who oversaw the program and is being made a partner. For a firm with historically good standing on the American Lawyer's pro bono A-list, one might wonder what prompted the star power addition.
"[Pro bono] is becoming much more important in terms of client relations, recruitment and marketing," says Esther F. Larfent, president of the Pro Bono Institute, which, since 1995, has urged large law firms to commit 3-5% of lawyer hours to pro bono work. Hiring someone of stature to oversee the pro bono effort "is a very fast growing trend, there's no question." And having an inhouse partner can fill a talent void at firms that have historically relied on public organizations to oversee lawyer work.
As we all know, pro bono has been around for decades. Pro bono was what firms long offered to do for pet projects of friends and clients that could also fill young lawyers' time when real work got a little slow.
It has, however, become a much more complicated matter. Feeding into the equation are various factors: public perception (falling) of lawyers' civic mindedness; the motivation of many who enter law school to "do good" followed by those same graduates going to big, bad corporate firms and suffering the resultant identity crises; the escalating dissatisfaction of law practitioners and correspondingly escalating attrition rates (perhaps related in part to the previous observation); inspired in part by the expanded transparency that Sarbanes Oxley has imposed on corporations, the increasing client demand (often with teeth) for their law firms to also demonstrate their bone fides in social agenda areas, such as diversity and community service. There is even the prospect of using pro bono work as a marketing device to tether a firm to a new client or strengthen existing ties.
What Law Firms Are Doing
Some law firms have moved to adopt firm-wide programs that identify them with select non-profits or cause campaigns. Cravath, Swaine & Moore attracted widespread attention a few years ago when it became the primary sponsor of the Urban Assembly School for Law and Justice in Brooklyn, one of 200 small schools that Mayor Michael Bloomberg created to overhaul public education in New York City. Cravath took ownership of this visionary community program, vowing “hands-on” involvement on an “in-school” basis. Throughout the firm, partners, associates and administrative staff work to develop and build an initiative that they believe can lead to real, systemic social change.
Cravath’s community venture was sufficiently distinctive to merit feature news coverage. According to Stuart C. Ross, partner in ross+price communications, a public relations and marketing services agency that advises professional services firms, “What Cravath did, and how it was reported by the news media, represents an important shift... Clearly the press will cover effective and innovative corporate citizenship, but only if those efforts go well beyond simply writing a check or donating a few hours of legal expertise.”
Skadden had a 38% increase in pro bono hours in 2007 after it assigned Douglas Robinson, a longtime partner devoted to defenses in death penalty cases who was considering early retirement, to become its first pro bono partner.
What are the Benefits for Law Firms? In addition to the obvious good these programs do for the community and the favorable public relations they can generate, these programs also have a positive impact on a firm’s retention and recruitment effort, producing real bottom-line results. A study by the Center for Corporate Citizenship at Boston College revealed that 73% of employees involved in volunteering through work said their employers’ support of these initiatives had made them more committed to their jobs.
David Sirota, co-author of The Enthusiastic Employee: How Companies Profit by Giving Workers What They Want (Wharton School Publishing), argues that employees, regardless of industry focus or experience, have three basic goals in their work. First, they want to be treated “equitably,” with competitive pay, benefits, job security and respect. Second, employees want a sense of achievement from work and to feel pride in both their own position and in the organization of which they are a part. And third, employees want to experience camaraderie. As a Cravath partner phrased it, “This [camaraderie] is not mentioned much in our field, but it's key – not only in the sense of having a friend, but working well together as a team. That is a tremendous source of satisfaction for people…. Working with the School for Law and Justice has been great for Cravath. Having one firm-wide project involving the entire staff builds office morale.”
WilmerHale committed both financial support and a broad range of administrative and in-kind assistance, including active volunteer service, to six community youth and education organizations in Washington D.C. and Boston, which it reports “has made our lawyers and staff part of the fabric of these community organizations.” The firm takes pride in the striking results produced by its Youth and Education Initiative in terms of student morale, student and staff retention, college acceptance rates, child literacy, improved communication skills and community building. And, it reports, “our non-profit partnerships are a rich source of fulfillment—an internal glue that unites lawyers and staff through their volunteer service to inner-city children.”
According to James H. Quigley, CEO of Deloitte & Touche USA, “What we have seen at Deloitte & Touche is that one of the benefits of contributing to the community is that it helps employees develop leadership skills and business acumen. A [recent external] survey [we conducted] revealed a strong link between volunteering and professional success. Among other findings, the data showed that 86% of employed Americans believe volunteering can have a positive impact on their careers and 78% see volunteering as an opportunity to develop business skills, including decision-making, problem-solving and negotiating. Community service matters.”
From a recruiting perspective, both established professionals and young people from Gen X and Y are seeking more than a paycheck. Candidates are increasingly concerned with work/life balance opportunities, the existence and influence of a diversity committee and the extent of a firm’s involvement in the community.
Fried, Frank, Harris, Shriver & Jacobson, the sole law firm sponsoring the inaugural conference in 2005 of the “Clinton Global Initiative," as the former president called it, had eleven associates participate in serving as personal aides to the heads of state, corporate chiefs and academics from around the world who attended. As one associate explained, "I wanted to do something with my life besides chasing greenbacks, and so I chose Fried Frank in order to have a balance between serving clients and doing pro bono work."
In terms of charitable giving and community good, law firms’ pro bono programs have long produced positive returns in the legal and broader community. However, most pro bono efforts are individual donations of time and expertise that don’t necessarily coalesce to make a major impact or project a firm identity, and therefore fail to provide not only the optimal amount of good but also the optimal public relations punch as well.
Law firms are often bedeviled by the on-line shenanigans of their young (and sometimes not so young), who can carelessly leave a footprint permanently in cyberspace. While these irritations don't often rise to the level in titillation value or PR devastation as some of the old-tech crimes perpetuated by errant employees/partners, like the Cravath tax lawyer who solicited children for sexual favors, those types of cases are (thankfully) fairly rare and have a limited media shelf life. Blogs and social networks, on the other hand, seem to just keep on giving and giving, although often an unwelcome PR black eye.
Here's some recent developments for law firms in the cyberspace sandbox.
Allen & Overy's London office recently issued a ban on accessing the social networking website Facebook in light of concerns that the impact of downloading videos from the site could compromise the firm's IT performance. Within days, complaints forced a turn-around by management, nominally on the grounds that the site is used for business as well as social reasons. Currently there are 932 members on the A&O network on Facebook, a nice bump over the 600+ when the firm tried to shut it down. Internet comments related to the episode ran the gamut from condemnation of the firm's leadership for being so easily swayed to one person's plea for more such bans so that work could get done.
Arguments for/against law firm blogs/social networks usually include claims that they are useful/extraneous for business development in the internet age, that other businesses do/don't (investment banks often don't, for example) allow workers to access them, that social/work boundaries should/should not be imposed, that the sites are time-wasters/efficiency drivers.
Reflecting these mixed feelings, evidently approximately one-third of law firms have Facebook networks, and two-thirds of law firms have blocked them. Big firms with networks on Facebook include at least eight of the largest: Skadden, Arps (with 379 members), Baker & McKenzie (728), Jones Day (286), Latham & Watkins (291), Sidley Austin (199), White & Case (370), Shearman & Sterling (225), and Kirkland & Ellis (192). While Mayer Brown and Weil, Gotschal, among others, have apparently banned them.
As a cultural matter, these kinds of social networks can be a very useful tool in building community and connection at firms that have long been known for neither. Their availability resonates with Gen Xers and Yers, who are most comfortable with an open technological stance. And there are at least nascent efforts to truly use these types of networks for business development purposes.
LegalOnRamp, a relatively new site being developed in conjunction with Cisco, envisions an interactive brainstorming locale involving in-house and outside lawyers, who can meet and discuss substantive legal topics, as well as management and personnel issues. Mark Chandler, GC at Cisco, touts this type of technological meeting ground as the model for how law will be conducted in the future. Instant access to not only profiles, expert articles and form provisions, but also substantive issue forums and interactive document building certainly make it a useful tool. Another feature, being able to see who each party is connected with-- their "friends," in Facebook parlance, also efficiently builds reliable connections and makes for more informed referrals.
As to independently run "insider" blogs, most firms have no ability to influence what is on them other than by using their bully pulpit. The latest controversy involves a blog run by two unnamed Skadden Arps employees-- with admittedly no authority to speak for the firm-- that held a "Hottest Female Associate" contest, with photos of the candidates included. The contestants were neither notified nor asked for permission to post their names/photos and a few photos were of an obviously personal nature (don't rush to Google it now--the photos have been taken down).
Much to the apparent surprise of the blog-minders--"Damn, we feel like we were called to the Vice Principal's office today and had our knuckles wrapped (sic)."-- Henry Baer, chairman of Skadden, wrote an email to the firm recognizing the prevalence of blogs but weighing in on the inappropriateness of the contests, which "does (sic) not reflect our values and standards of behavior... We urge the authors of the blog to consider both the privacy and feelings of the affected attorneys and to discontinue the contests."
Several points seem worth noting regarding this particular standoff. While the female contest had already been decided, the still outstanding "Hottest Male Associate" contest was promptly cancelled by our erstwhile bloggers. Also, it is interesting that Baer's objections were confined to the impact of the contest on the attorneys involved and other attorneys at the firm, who were concerned and embarrassed. No doubt he had good counsel on the necessity to counter any appearance of a hostile workplace. But several comments on the blog make it clear that there is potentially another kind of financial downside: the bloggers risked turning off clients and employment candidates as well.
A retort to Baer's letter by the bloggers--"We're not quite sure what Skadden's "values" are (or, for that matter, the Firm's "standards of behavior")"--is perhaps the most troubling aspect of this little imbroglio. See our upcoming entry Joining the British in Hunting for an Identity on the importance on both sides of the pond of knowing who you are and what you stand for as a firm, and effectively inculcating that into the culture.
A corporate real estate lawyer at Jenner & Block, Jennifer Sara Levin, recently founded Legal Intelligence, an online platform connecting law school students with top-tier firms. A pilot program involving three law firms and her alma mater, Northwestern University School of Law, is running online at http://www.legalintelllc.com. The idea is to help students find the law firm that fits them best, partly through online video conferences.
"It's like a Match.com for law students," Levin said of her start-up.
Law firms pay to participate, Levin said, because they want to find law school graduates who aren't just qualified but who also share their firm's values. Often, Levin said, top-tier law firms end up with graduates who don't fit their culture. "There's no way to do it in a 20-minute interview. You can't get enough information to know if this person is the right cultural fit," she said.
There's that "v" word again.
Enter keywords:
Muir Lectures on Improving Management Decision-Making
On Wednesday, February 17, 2009 Muir will lecture students at Northwestern University's Business Institutions Program on improving management decision-making, using law firm management committees as a case study. Based in part on the article "Promoting an Effective Board or Management Group," the discussion will explore, among other subjects, optimal personality traits for good decision-making, how to construct effective teams and the challenge of avoiding extreme decisions.
Older Announcements...
