Law Practice Management, Law Firm Coaching : Ronda Muir of Robin Rolfe Resources : Law People Blog

The role of the full-time general counsel at law firms is evidently becoming entrenched, and also valued enough for firms to devote significant funds to the role.  So why does a big-law firm swim against that tide?

Results from Altman Weil's 2008 survey of the Am Law 200, released at the end of April, found that, compared to the last survey conducted in 2006, the number of firms with full-time GCs remained stable at 85%, 83% percent of whom are litigation partners.  Earnings of GCs have gone up 34% from an average of $561,000 to $750,000, while their participation on their firms' management committees has dropped from 40% to 22%.

Shearman & Sterling recently revamped its management structure by going in the opposite direction from most large firms:  halving the size of its executive committee--reducing it from 6 to 3.  It also created the role of "management team coordinator" to oversee 5 key areas--client development, practice management, partner and associate issues, firm arbitration and risk management.  The firm indicated that the changes are designed to spread responsibility across the firm and enable those in management, senior partners "who are the most effective partners in client development," to concentrate on client roles. 

Of even greater note, S&S eliminated its full-time general counsel position, replacing it with part-time responsibilities given to a practicing litigation partner, Henry Weisburg.  John Shutkin, S&S's now displaced general counsel, was hired in 2004 from KPMG International, where he had been general counsel for five years, one of the few GCs brought in from outside the firm.

Elizabeth Chambliss, law professor at New York Law School who has written frequently about law firm general counsel, has noted that S&S is swimming against the tide with this change.  "It's clear that the full-time professional model as a separate job is taking hold," and the elimination of Shutkin's job "raised eyebrows."

There are of course a number of possible explanations:  the person who hired Shutkin, David Heleniak, himself moved to another firm--Morgan Stanley--not long after Shutkin arrived.  S&S has also had some less than stellar financial results and perhaps this is an obvious way, though a risky one, in most eyes, to cut costs.  Certainly, the S&S spokesperson claims it's not just cost-cutting, but part of "a broader realignment."

After these musical chairs, S&S says it now wants to focus on priming younger partners for management roles.  "We want to make sure we nurture the younger members of the firms," says New York partner and member of the firm's global strategy committee, Creighton Condon.  "We'll be drawing on these resources to form the extra layer of management below the committee we have in place."

Interesting if this is how S&S hopes to home grow a new cadre of potential GCs.  But in the meantime, is S&S willing to rely on less than a full-time general counsel?

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In April, Shearman & Sterling's entire Mannheim office packed up and reverted back to its original form, Schilling Zutt & Anschutz.  What prompted the schism?

"There are some great lawyers at Shearman & Sterling," one former partner is reported to have said.  "I just don't think they are particularly happy."

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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. 

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Shedding additional light on earlier explorations in this forum of the subject of happiness is a new book written by Arthur Brooks that distills mountains of data on the subject.  For one thing, politics and happiness turn out to be clearly correlated.  But the correlation may not be what you think.

For starters, conservatives are happier than liberals.  Much happier.  And they have been for over 35 years.  Almost twice as many who describe themselves as "conservative" or "very conservative" say they are "very happy" (44%) as those who consider themselves "liberal" or "very liberal" (25%).  Brooks ascribes that result to three factors:  conservatives are twice as likely to be married, twice as likely to attend church every week, and more likely to have children.  They are NOT, however, richer than their more liberal, more miserable cohorts.

In fact, when the religious and political data are combined, a fascinating continuum of happiness appears.  Religious conservatives are ten times more likely to report being "very happy" than "not too happy" (50% to 5%).  Secular conservatives and religious liberals are about equally happy in the middle. And secular liberals are as likely to say they are "not too happy" as to say they are "very happy" (22% vs. 22%).  

In addition, extremists on both sides are happier than their more moderate cohorts.  Of those "extremely liberal," 35% say they are very happy (vs. 22% of the ordinary liberals) compared to 48% of extreme conservatives (vs. 43% of their less extreme brethren). Brooks attributes the extremists' happiness to their conviction that they are right, which, he notes, often leads them to conclude that the other side is not merely wrong, but evil.  Evidently two-thirds of America's far left and half of the far right say they dislike not only the other side's ideas, but also the people who hold them!

Brooks finds the determinant underlying happiness to be attitude.  Conservatives are more optimistic, believing that if you work hard and play by the rules, you can succeed.  Liberals, on the other hand, tend to focus on injustice and victimization, encouraging people to feel helpless and aggrieved.

So what does this mean for us hard-working lawyers?  The striking correlation is with the well-established personality trait that lawyers exhibit en masse:  pessimism, which, according to Brooks' analysis, should mean that we are also a less happy lot. 

And indeed we are.  It is now well-documented that lawyers are less happy in their work and their personal lives than nearly every other profession surveyed.

Maybe we should get hitched, join a church and start a brood? 

For a full book review of "Gross National Happiness," go to The Economist.

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The use of assessments worldwide is rapidly expanding and lawyers are still lagging at the back of the pack--way back. 

An article by Lisa Belkin in yesterday's New York Times notes that there are 2,500 "profiling instruments" that companies rely on more every year when deciding whom to hire or promote. Sixty-five percent of companies surveyed reported using assessments in 2006, up almost double from the 34 percent reported a year earlier, according to Staffing Industry Report, a human-resources newsletter.

To paraphrase her article, the content of tests has stayed more or less constant for three decades. What has changed is the workplace. The cost of losing experienced employees now represents a tremendous lost of investment.  "Employers want a guarantee that a new hire will stick — and the best way to do that is to make sure that job and candidate are a good fit in the first place."

Globalization that separates performance and accountability/review across continents has further complicated the process of finding and training the best person for the job. So offering on-line testing across those continents makes these assessments not only appealing but also fast.  

I am often asked by potential clients, particularly those who have been in corporate settings, if we either offer or recommend simple, cost-effective assessments for them to use in attorney recruitment, training and development.  While we can recommend and administer a number of good assessments that can be highly useful -- Myers Briggs Type Indicator (the most popular test in the country, used by 89 of the Fortune 100 and taken by 2.5 million Americans each year), Caliper's Personality Profile, Birkman Method, MayerSaloveyCaruso Emotional Intelligence Test, Thomas Kilmann Conflict Instrument, among others--they are not inexpensive and they are not targeted to lawyers. 

A recent college graduate friend took a Johnson O'Connor aptitude assessment, a common test for teens and young adults to help determine career possibilities.  Since her father and grandfather are lawyers and she is considering going to law school, she was surprised to find that "lawyer" was not one of her designated career possibilities.  She was told that a few years ago Johnson O'Connor stopped offering "lawyer" as an option for any of their test-takers.  The reason?  They are no longer able to reliably correlate attributes or aptitudes with the successful practice of law.

And therein lies one of the problems with assessing attorneys.  While research has indeed identified a number of attributes that lawyers exhibit to a greater degree than others-- for example, high pessimism, skepticism, urgency and autonomy, and low resilience, sociability and collaboration-- the problem lies in the data that shows the impact these characteristics are having on practitioners.  These very attributes present in so many lawyers are also the attributes contributing to the dissatisfaction and distress that the legal profession exhibits:  astonishingly high rates of depression and other mental illness, substance abuse, suicide, and divorce, for starters. High rates of dissatisfaction that are also contributing to the staggering drop-out and attrition rates.

In addition to the challenge of identifying what makes for a good (as well as well-adjusted lawyer), there is also the expense of doing that well.  The testing often done at corporations is highly individualized, developed after an extensive review of what attributes in fact produce productive and satisfied employees at that particular company, and sometimes at that particular location.  Google hires over 10,000 new employees each year and enjoys the amazingly low attrition rate of 4%, but to accomplish that.it invests in a highly detailed questionnaire and assessment that is developed from extensive employee data   That process is not inexpensive. 

Not only is it the individual lawyers who have complex and sometimes hard-to-read attributes.  Law firms and law departments, often in spite of their studied denial, also have "personalities."  Understanding those personalities is critical in determining the type of person who will thrive or fail there. 

Our unique expertise in understanding the attributes of individual lawyers, as well as each legal workplace, makes us ideally suited to help you enter the challenging world of 21st century attorney assessment, development and retention.

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Of the gallons of ink dedicated to analyzing the eye-popping follies of Eliot Spitzer, by far the most trenchant view is contained in the March 14 New York Times OpEd piece by David Brooks. Permit me to quote whole sections of his article.

"Our social structure seems to produce significant numbers of people with rank-link imbalances. That is to say, they have all of the social skills required to improve their social rank, but none of the social skills that lead to genuine bonding. They are good at vertical relationships with mentors and bosses, but bad at horizontal relationships with friends and lovers.

[In school,] they rack up great grades and develop that coating of arrogance that forms on those who know that in the long run they will be more successful than the beauties and jocks who get dates.

Then they go into one of those fields like law, medicine or politics, where a person’s identity is defined by career rank. They develop the specific social skills that are useful on the climb up the greasy pole: the capacity to imply false intimacy; the ability to remember first names; the subtle skills of effective deference; the willingness to stand too close to other men while talking and touching them in a manly way.

And, of course, these people succeed and enjoy their success.

They treat their conversational partners the way the Nazis treated Poland. They crush initial resistance, and the onslaught of accumulated narcissism is finally too much to bear.

[But] then, gradually, some cruel cosmic joke gets played on them. They realize in middle age that their grandeur is not enough and that they are lonely. The ordinariness of their intimate lives is made more painful by the exhilaration of their public success. If they were used to limits in public life, maybe it would be easier to accept the everydayness of middle-aged passion. But, of course, they are not.

And so the crisis comes...

These Type A men are just not equipped to have normal relationships. All their lives they’ve been a walking Asperger’s Convention, the kings of the emotionally avoidant. Because of disuse, their sensitivity synapses are still performing at preschool levels.

So when they decide that they do in fact have an inner soul and it’s time to take it out for a romp ... . Well, let’s just say they’ve just bought a ticket on the self-immolation express. Some desperate lunge toward intimacy is sure to follow, some sad attempt at bonding. Welcome to the land of the wide stance."

 

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Now that the British are doing it, maybe even law firms should consider giving it a try.  Articulating an identity, that is.  According to an article in the New York Times last month, Prime Minister Gordon Brown's new government has announced an effort to formulate a British "statement of values" defining what it means to be British, much as the Declaration of Independence sets out what Americans stand for. But it is an undertaking that has produced exasperation in a number of corners. 

In a fitting tribute to British independence (or recalcitrance, depending on your point of view), the winning entry in a contest sponsored by The Times of London, inspired, if somewhat cynically, by the identity campaign, is:  "No Motto Please, We're British."  Pity that so many law firms come to a similar conclusion.

While the British are looking to articulate their Britishness, law firms should consider figuring out who they are as well.  Establishing an identity has long been implicit (though often short-changed) in the process of strategic planning.  Strategic planning involves the projection of a firm forward into new (hopefully better) circumstances based on assumptions about existing and future conditions.

While the vagaries of accurately assessing current and (certainly) future conditions are evident, the ingredient that law firms often neglect is the "who."  Who is this firm?  What is the firm like that is moving through these assumed conditions?  What are its values and goals?  Whom would it like to become?  Because the "who" will be in many cases the determining factor in the outcome of strategic planning.  Is the firm a nimble, highly technological, thinly leveraged outfit that offers its attorneys immediate responsibility or one that enjoys great depth of expertise, long-standing client connections and is a well-respected resume-builder?  Does the firm pride itself on collaboration or aggressiveness?  Does it offer its lawyers a premier training ground or a sustainable life style?

Lawyers often look askance at these types of evaluations.  As a million websites point out, firms aim to be "responsive to our clients' need" and "highly experienced in ..." and be done with it.  But those are not the things that young applicants in the competitive recruiting and retention bullpen are saying about firms.  They are finding ways to distinguish firms, whether we like it or not.

A recent entry referred to an unauthorized Skadden blog that was terrorizing the firm with its "most attractive associate" contests.  Management made it clear that "the 'contests' on one of these blogs is (sic) inappropriate and does not reflect our values and standards of behavior."  It is the "insider" response that seems to us fairly shocking: "We're not quite sure what Skadden's 'values' are (or, for that matter, the Firm's 'standards of behavior')."  It's the "we're not quite sure..." part that should send chills down management's spine.  Not just because of the likelihood of errant contests in poor taste, but because of the wide spectrum of activities-- ill-considered to illegal--that a lack of common values invites.

In an increasingly stratified marketplace, it is more and more important for each law firm to make sure it knows what it stands for and why, and to thoroughly communicate those values from top to bottom.  There are few forces as powerful as smart, ambitious Type A personalities committed to a cause.  And the only way your law firm can become your lawyers' cause, particularly for your Gen Xers and Yers, is for the firm to stake out itself in the law firm firmament.

A law firm's values, evident in how it functions on a daily basis, not only in what it talks about, are what associates and laterals will come for and what they will stay for.  Those values are what will keep your partners from being plundered and your staff loyal.  And they are what will make your firm most productive. 

One of the reasons this British identity search is necessary, according to Vernon Bogdanor, professor of government at Oxford, is that "Britain was something that just happened.  No one's ever sat down and thought about what it means to be British." He points out that having an identity bespeaks a confidence that there is a place in the global realm for the British.  Without a common identity that links its members into a community, he says, the country becomes a hotel, where individuals check in and out but don't have a common connection.  Sound familiar?

From the historically great gray uniformity of law firms has blossomed a broad range of attitudes and actualities on many subjects-- gender and minority diversity, life-balance, training, client service, management involvement, even whether the practice of law is done from dedicated real estate or virtually. 

No longer is the slogan "We're Lawyers" sufficient.

 

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On Wednesday, March 12, 2-3:15 pm EST, Muir will be conducting an audioconference for the Center for Competitive Management on Associate Compensation: Remain Competitive Without Breaking the Bank.  Included in the discussion will be a review of current trends and out-of-the-box ideas for dealing with the impact of escalating associate compensation, how to find the best strategy for your own law firm and overcoming the problems and pitfalls in making that strategy work.

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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.

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On February 12, 2008 Muir is scheduled to discuss with students at Northwestern University's Business Institutions Program how to improve decision-making.  Based in large part on the information contained in "Promoting an Effective Board or Management Group," the discussion will explore, among other subjects, optimal personality traits for good decision-making and how to avoid extreme decisions.

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What's the route to higher efficacy and productivity?  Might that be by staffing with "messy" groups?  So suggests a recent book entitled The Difference:  How the Power of Diversity Creates Better Groups, Firms, Schools and Societies by Scott E. Page, professor of complex systems, political science and economics at the University of Michigan. 

Using mathematical modeling, Dr. Page shows how variety in staffing produces organizational strength-- and bottom line results.  In his models, diverse groups of problem-solvers outperformed groups made up of similar individuals with high problem-solving ability.  The diverse groups got stuck less often that did the smart individuals, who tended to think similarly.

According to Dr. Page, different talents and perspectives, which he calls "tools," bring more and different ways of seeing a problem and result in faster/better ways of solving it.  Diverse cities are more productive, diverse boards of directors make better decisions, diverse companies are more innovative.  Interdisciplinary work is the biggest trend in scientific research, he says, and should be the route that business and the professions pursue.

So what does this have to do with lawyers?  Law departments that stretch across many countries are often diverse by necessity.  And by going global, many firms are diversifying by circumstance.  In both cases different cultural, personality and economic perspectives come into the mix.  While trying to preserve the benefits of diversity, these departments and firms are also confronted with the morass of confusion that many different people doing things differently can make.  Molding those differing perspectives into the "BigLaw" firm or department way of doing things--either purposefully, by circulating the administrative memo or lecturing the new recruits, or inadvertently, perhaps by unconsciously discouraging lawyers from ringing an alarm when they spot missteps, can leave you with unintended consequences. 

KPMG's program to test all US partners (see our KPMG Model Delivers Risk Management, Teamwork, Client Satisfaction and Diversity Too) and then use that information to balance various teams--marketing, client, industry and management, to name a few--is a shining example of the usefulness of diverse approaches to every type of issue facing professional services firms.  KPMG is affirmatively pursuing and integrating diversity in their business model to great benefit.

Finding the right balance to both capitalize on the benefits of diversity and to minimize the administrative and management fallout produced by those differences is a modern law firm's challenge.  There is every reason to believe that getting it right is worth the effort.

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Lawyers have been making it into the big-time news lately.  That is, not just into the AmLaw publications, where spots about closely-argued decisions vie for those on the merger of the month, but onto the front page of  the New York Times SundayStyles section in early January  ("The Falling Down Professions") and more recently the front page of the NYT ThursdayStyles section ("Who's Cuddly Now?").  And they're not talking about what celebrity lawyers are wearing, or about those errant lawyers taking their clothes off in the conference room or screaming obscenities at the judge. 

What's making the news these days are regular law firms and the vast universe of everyday lawyers--and the bedeviling challenges that they face:  declining law school applications over the last few years, plummeting retention rates, rising dissatisfaction among lawyers and clients.  But while some law firms have been bemoaning how hard it is to get lawyers to stay in place, just doing their job, servicing their clients, it is occurring to a number of other firms that--drum roll--some tweaking of the business model might be in order.

So it is, as persistently promoted here, and now even trumpeted in the style sections of the news, that law firms, they are a'changin'. 

Why are they changing?  Richard Florida, the author of “The Rise of the Creative Class: And How It’s Transforming Work, Leisure, Community and Everyday Life” (Basic Books, 2003) says the old grand professions have “lost their allure, their status. And it isn’t about money.”  The money, as firms contemplate a $200,000 salary for a brand new law school graduate, is still pretty good. But especially among young people, according to Mr. Florida, professional status is now inextricably linked to ideas of flexibility and creativity, values not traditionally nurtured by the legal industry. 

But exactly how are law firms changing?  They are experimenting with different fee structures for their clients, and experimenting with different compensation and engagement arrangements with their associates and even partners (see our The Fracturing World of Lockstep Compensation).  They are contracting, out-sourcing and e-commuting. They are introducing sensitivity, transparency and flexibility not only into their vocabulary (see our entry Sullivan & Cromwell Proves Mom Right?) but also into their culture, providing professional development that promotes leadership skills and career planning in addition to CLE mastery, and reworking their retirement, work sharing and required billable hours policies.  In fact, there are so many changes afoot, that there is a good chance that not only will law firms of the mid-21st century look very different from their 20th-century antecedents, but they may also not look much like each other.  See our Leaving Behind the Medieval Model.

Lawyers are well-known for their risk aversion, and personality assessments bear out that propensity on the individual level.  But ruminating over these forays in experimentation brings one to the conclusion that the biggest change amongst us lawyers is that we are becoming demonstrably capable of, and willing to, change.  Ok, maybe only after a short walk past the gangplank, but still, at least when prodded, able to change.  Or at least willing to try to change.

And that's how we are going to get better at this business.

 

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Baby-boomers are making their mark on the demographic frontier again--this time valiantly fending off the mandatory retirement that generations of law firm partners before them submitted to. 

The Sidley Austin age-discrimination case, which arose when 32 partners lost their full partner status, ended last fall after two-and-a-half years and seven court decisions (all lost by Sidley Austin) without a decision on the merits.  It did end with a large payment of cash, $27.5 million to be precise, to the aged-50-something+ lawyers, and an uneasy feeling in the pit of many legal bellies.  Left unanswered was the question of whether and when law partners are employers or employees for purposes of the EEOC, a determination which may be even thornier with the proliferating partner tiers in partnerships.

Even if they don't sue, baby boomers don't have to take being put out to pasture lying down--they can usually find a firm that will appreciate their talents.  Barry Bryer left Wachtell, Lipton for Latham & Watlkins in 2005 to escape a mandatory retirement policy, and antitrust specialist A. Paul Victor left Weil, Gotshal for Dewey & LeBoeuf for the same reason. 

So what's the right tact for law firms to take today?  Over half of law firms have age-mandated retirement policies on the books, with a majority of those requiring retirement at 70.  An Altman Weil study found that only 38% of lawyers in management roles agree with having age-mandated retirement policies, although given that nearly 60% of law partners are now over 55 years of age, there's a good possibility that the disapproving 62% may have their own self-interest in mind.

Many firms argue that these policies are necessary for the transitioning of client relationships, firm leadership and firm profits to more productive, younger partners.  The policies also, of course, automatically trigger firm action, avoiding the firm having to find the will and the muscle to individually evaluate older partners and confront those who are not productive.

Advocates for dropping these age-driven policies point out that, at a time when firms have been bemoaning recruitment and retention challenges, 80% of the growth in the U.S. workforce over the next 15 years will be in the "over 50" age bracket.  And nearly 80% of all baby boomers, according to the US Census Bureau, want to continue to work during retirement.  Why isn't retaining lawyers who are healthier at their ages than earlier generations, who have proven capable and dedicated, and whose experience makes them highly valuable in a global market, a win-win solution for all involved?

But even without the impetus of a court declaring such a retirement policy illegal, the trend toward dropping aged-mandated policies is clear. The American Bar Association House of Delegates passed a resolution in August 2007 calling for law firms to end age-based retirement policies.  A special committee of the New York State Bar Association concluded that mandatory retirement within law firms at an arbitrary age is not an accepted practice and sent a letter to major law firms in New York asking them to pledge to end those plans, which a number of firms have signed.  

Last year Pillsbury Winthrop announced the abandonment of its mandatory retirement policy and instead supports partners in developing an individual approach to transition.  Senior partners build three-to-five year career transition plans, receive financial planning services to make sure financials don't drive the decisions and consult professional career consultants for additional support and advice.

According to Holland & Knight,  "We do not have a mandatory retirement policy, although our partnership agreement now requires a conversion from equity or nonequity partner to senior partner status at age 70.  We have many active senior partners in their 70s and 80s and greatly value their contributions."

So are we ever going to get rid of them?

 

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In the era of the global law firm comes (wisely, in our view) the introduction of the position of Global Chief People Officer into law firm senior management .  Reed Smith announced last week that its creation of  the position underscores the increasing importance the firm places on running itself as a business.

"You see more of this in global companies," said Gary Sokulski, Reed Smith's chief operating officer. "Since we're a people business, it's only natural to have someone who focuses on the people aspect.  It's similar to a human resources officer, but focused more on employee concerns such as work-life balance, better managing and evaluating talent, and creating higher-level training programs."

Since 2001, Reed Smith has consolidated with firms from around the world, including in New York, California, Chicago, London, Abu Dhabi, Greece, Dubai, Paris, Hong Kong and Beijing, increasing in size from 600 attorneys based in the U.S. to more than 1,500 worldwide. Meeting the challenges of that much lateral integration alone would merit a full-time professional.

DLA Piper, with more than 3,600 lawyers over 64 offices in 25 countries, and arguably (depending on which moment you're counting) the second largest law firm in the world, has had a Global Chief People Officer for several years, Robert Halton, headquartered in London. 

"Unlike other organizations, the cliche of people being the best asset is completely true in law firms. We don't have any machinery or stores, so it's the people providing the competitive edge in the market. Getting the right people is crucial to the success of a law firm, and keeping that pipeline of talent flowing is also crucial," Halton says.

Small and mid-size firms face equally critical people issues as do the new behemoths, but for them, adding a dedicated full-time professional to firm overhead in order to address those issues often is unrealistic. 

We at RRR offer an Outside/Inside Consulting arrangement whereby we will spend a designated number of days per week or month as your Chief People Officer.  Our experience brings efficient expertise to your people concerns in an affordable format.

Make way for a Global Chief People Officer at your firm, whatever the size.

 

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Is living a life filled with distrust and deception the price of achieving professional success?  As we head into another year, it is a query worth pursuing.

Steve Katz, adjunct professor at Northwestern University's Business Institutions Program, points out a bestseller published in 1998 that purportedly draws from centuries of powerful leaders (on the order of Machiavelli, Talleyrand, Bismarck, Catherine the Great, Mao, Kissinger, Haile Selassie, etc.) for the best strategies for achieving business success. 

The problem with The 48 Laws of Power by Robert Greene (designed by Joost Elffers) is that virtually every one of these "laws" are counter to most current notions of business ethics and best leadership practices, and in some cases contravene a number of other generally accepted precepts as well.  Which doesn't mean that there aren't plenty of people out there who nonetheless following these "laws."

Mastering one's emotions and perfecting the arts of deception and indirection are, the author asserts, the essential keys to success. Here are some examples:

•   Law 3:    Conceal your Intentions
•   Law 7:    Get others to do the work for you, but always take the credit
•   Law 11:  Keep people dependent on you
•   Law 21:  Play a sucker to catch a sucker-- seem dumber than your mark
•   Law 27:  Play on people's need to believe to create a cult-like following
•   Law 33:  Use each person's weakness as a thumbscrew you can turn to your advantage
•   Law 44:  Disarm and infuriate your enemies by mirroring their values and their actions

While mastering one's emotions is a worthy and productive goal that few fully attain, recent research shows that using that skill to suppress emotion at the workplace will not produce much success.  Lack of effective use and conveyance of emotion, particularly by the leader, is most likely to produce a working group that is not cohesive and not satisfied. 

Perfecting deception and indirection would hardly seem to be what would distinguish anyone from the crowd these days.  And in a post-Sarbanes Oxley world, wielding deception and indirection as tools of management could possibly lead to the wrong side of the bars .

What is not particularly surprising is that the books that Amazon.com identifies as most often bought along with 48 Laws of Power are Get Anyone to Do Anything; Never Feel Powerless Again by David J. Lieberman and The Mystery Method: How to Get Beautiful Women Into Bed by "Mystery" and "Lovedrop."  (Was that a collective rush to Amazon?)

The point is that these kinds of  "power" plays are most likely the province of people who feel they lack influence, allure, value.  The sorry result of resorting to these tactics is that, whatever success is achieved in the short run (and I'm not assuming there usually is much), in the long run not only is there no success, but the journey to that unsucessful end will have been quite an unpleasant one for both the "power player" and his/her team.   

A better stance would be to do the opposite of what each of these rules suggest: 

• Make your intentions clear
• Give credit to others even when you have done some of the work
• Provide the support that can set your team free
• Be a source of information and inspiration to those working with you
• Give others the gift that you believe in them
• Show how each person's strengths can help them and their team work better and happier
• Take a stand for your values and make sure your actions follow suit

So, let us take the opposite of another of these "power laws", Law 20 (which advises not to commit to anyone or anything), and commit to a new year of achieving the kind of power that results from using both emotions and intellect to effectively and honestly build trust and respect at work.

Happy new year!

 

 

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For the first time in six years, law firm expenses in the US and the UK are growing faster than revenues, according to a recent article in The American Lawyer.  For the first six months of 2007, gross revenue grew at a strong 13.1%, well above the compound annual growth rate of 10.5% of the prior three years, while productivity (average hours per lawyer) was flat.  Rate increases were in line with the six-year average increase of 7% and, continuing an upward trend, there was an increase in leverage-- total lawyers rose by 7.4%, significantly above the increase in equity partners.

But there were also big increases on the expense side, with the expense growth rate of 13.7% much greater than the average 9.2% of the last three years and outstripping the increase in revenues (13.1%) for the first time in six years. 

The reasons are pretty obvious.  A 17% rise in compensation costs accounted for the bulk of the increase in expenses.  This last year has seen not only big jumps in associate compensation and bonuses but also the announcement of special additional bonuses yet to come.  Equity partner growth in the first half of 2007 was also up 1.5 percent, over .5% from the prior year, although still not up to the average six-year rate of 2.6%.  Operating costs (occupancy and overhead) also grew close to 12%, in many cases driven by additional new hires.  And poor currency conversions rates relating to foreign office expenses have driven those costs up dramatically.

So what does the crystal ball tell about the future?  With the drop off in transactional work caused by the credit crunch and no up-tick in bankruptcy and litigation, productivity in the second half of 2007 is likely to slow, and those higher salaries and bonuses on top of bonuses will fully hit the books.  Revenue for the entire year is likely to be cushioned by the strong inventory accumulated during the first half of 2007, resulting in still decent increases in profits per equity partner of 6-8%.

But 2008 may be another matter altogether.  If transactions don't come back and other practices don't take up the slack, reduced revenues and even layoffs may be in the offing. 

It's a new year coming.  Let's hope the party hats stay on.

 

 

 

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It is a scenario we in the legal field have come to expect--announcements of associate compensation increases are responded to in waves. First the largest firms rush to match them, then the mid-size firms determine how much they are going to raise compensation, often not in a dollar-for-dollar match, and then there is the soul-seeking by the smaller firms.  Can they afford to raise compensation at all? 

In the aftermath of Cravath's recent announcement of special bonuses this year--bonuses ranging from $10,000 to $50,000 on top of the normal annual bonuses ranging from $35,000 to $65,000--a number of large firms have, as expected, followed suit:  Davis Polk & Wardwell, Debevoise & Plimpton, Sullivan & Cromwell, Milbank Tweed, Paul Weiss and Simpson Thacher & Bartlett.

Presumably the mid-size firms are weighing their options and the smallest firms are shaking their heads.

LOWERING COMPENSATION

What is interesting at this juncture is that there are significant developments at the other end of the compensation continuum as well, particularly among mid-size and small firms. 

Chapman and Cutler, a 220-attorney firm in Chicago, this fall started offering second-year associates the opportunity to choose between two pay plans-- one with lower hourly billing requirements and less pay and the other with higher billing requirements and more pay.  Based on both associate and client feedback, Dallas-based Strasburger & Price has replaced over 400 of its required 1900 annual billable hours for first-year lawyers with training hours devoted to associate development--mentoring, leadership development and pro bono projects, while keeping compensation at the same level. 

Boston-based Lowrie, Lando & Anastasi, an intellectual property boutique launched in 2003, has grown to 27 attorneys in part by requiring just 1,600 hours from associates while starting them at $130,000, $30,000 below what large firms in the area offer.  And Ford & Harrison completely abandoned billable-hour minimums for new attorneys, shocking the legal world that views billable hours as the bedrock of the business model, while also earning it some good publicity with potential clients.

In a particularly dramatic development, McDermott Will, a 1,000-attorney firm, has announced that it is hiring a cadre of attorneys to populate a new track the firm is creating-- one that is not en route to partnership, works less hours (30-40 @ week), is paid less (@25% less) and is evidently billed out at lower rates.  With the escalating volume and cost of e-discovery, contract attorneys have become fairly common, flying mostly below the firm/client radar.  These McDermott Will attorneys, however, are being given a permanent, formal position in the structure of the firm.  "The cost of document review has become intolerable for everyone," according to David Balabanian, head of Bingham McCutchen's litigation group.  In the world of full service firms, adding this track allows McDermott Will to retain both the quality control and the profit margin of work that might otherwise go elsewhere-- to lower-cost attorneys, such as SQ Global Solutions in India, or to outside document review firms.

The coup de grace goes to Washington's Howrey, with 618 attorneys, who earlier this year dropped lockstep completely in favor of a performance-based associate compensation system.  We noted in our entry A Small but Important Step in Associate Compensation? DLA Piper's distinction in paying associates differently based on practice area, and the potential that that raised for other types of compensation distinctions. Howrey has taken that to its logical extreme.  It hasn't been easy.  Modifying evaluation forms, adding training programs and hiring personnel to implement the system has been a "tremendous amount of work," according to Edward Han, hiring and development partner.  But the proof will be in the pudding.

THE IMPACT ON NIMBLENESS

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In a report released October 1^st, Catalyst, a New York consultancy, found that Fortune 500 companies with at least three women on their boards strongly outperformed those companies with fewer or no women. Based on a study of four years of corporate results, the correlation was found to be so direct that the more women who serve on a board, the better the bottom line. 

The companies with the highest percentage of women on their boards had equity returns 53% higher, returns on sales 42% higher and returns on invested capital at least 66% higher than those companies with the least number of women board members. Higher returns kicked in once at least three women served on the corporation’s board, the study found, with companies having only three women board members raising each of those returns an average of 5% over corporations with fewer women.

Why would female board participation produce such concrete financial results? Various consultants and academics speculate that women are better able to understand the customer base, particularly of consumer goods companies, and that showcasing women on the board helps attract and retain women employees throughout the company. 

Another reason may well be women’s often strong collaboration skills, empowering them to better resolve conflict and move boards through the thorny discussions necessary to make and carry through critical decisions.

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As many of the biggest law firms are concluding, “professional development” has become the preferred vehicle for addressing diversity attrition. Professional development encompasses enhanced orientation, mentoring, assignment and delegation processes, leadership training, career planning, diversity training, management skills, feedback training, business-development training, affinity groups and other tactics aimed at recruiting and keeping a diverse associate group.

The concept of professional development or talent management did not exist in law firms 20 years ago, and the data shows a clear pattern of women and minorities historically reporting less assistance with professional development, as well as lower job satisfaction, compared with white males.

Now most large law firms have some sort of professional development program and recent data from the NALP Foundation shows that this trend toward formalized programs is paying off. In 1998, 20% of associates left their positions at or near the end of their second year of employment. This year, entry-level lawyers are more likely to make their first move at the end of their third year of employment, staying 30% longer. 

The ABA Commission on Women engaged the National Opinion Research Center at the University of Chicago to examine why retention rates for white men are so much higher than those for women of color, and women of color retention rates are higher than those for men of color and white women. Consistent with the NALP’s data, the study found specifically that women of color felt excluded from networking opportunities, felt they were denied desirable assignments, and had limited access to client development opportunities, thereby making their billable hours targets harder to achieve.   

The NALP found that white men are more likely to report a consistent workload, regular feedback and intellectual challenge in their work, and they also report the intention of staying longer at their firms.

A consistent workload, regular feedback and intellectual growth are matters within the control of each firm, and are geometrically enhanced with the involvement of a person charged with professional development.

What specifically can firms incorporate into their processes to improve diversity retention? For starters, here is a short list.

• Exit interviews
• Coaching for partners to improve associate management and feedback techniques
• Formal mentoring program
• Color-blind assignment program
• Sophisticated evaluation and feedback forms and procedures

But the best way for firms to systematically enhance diversity retention is to establish a professional development department/person/consultant who can provide benchmarks to identify areas for improvement, formulate goals and then work with the diversity committee, the associate recruitment committee and associate managers to realize those goals. 

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Growing future leaders at our best business schools increasingly involves teaching "softer" skills, and often using personal style assessments. One of the more rigorous and long-standing low-residence courses at Harvard Business School is the nine-week Owner President Management Course (OPM), which spans three years.  Roughly 120 business owners, only half of whom are usually from the US, are enrolled in this course.

Last year, one of the course professors, Dr. Linda Doyle, included The Birkman Method in her "Leadership and Organizational Effectiveness" classes for the OPM, a class that examines leadership styles through case studies.  The Birkman Method is a personal style assessment that identifies a number of traits, and also how those traits manifest in an organization and morph under stress.  Using the Birkman assessment, OPM participants are able to identify and analyze their own authority styles, and the strengths and problems that might develop from those styles.  Harvard has decided to continue the use of the Birkman in this course and is considering including it in other MBA courses.

Yale School of Management has also introduced personal style assessments into its curriculum.  All MBA candidates are now required to take an assessment to help identify leadership styles, strengths and potential problems.

Heidi Brooks, Director of the Leadership Development Program at YSOM and a lecturer in Organizational Behavior, is convinced that these assessments are avenues to self awareness and interactional intelligence that can only improve management effectiveness.  Since most major corporations hire and promote at least in part on the basis of similar types of assessments, having MBA candidates familiarize themselves with the testing process and the information it provides also gives them an early advantage. 

Besides Harvard and Yale, Dartmouth University's Tuck School of Business, University of Southern California's Marshall School of Business, Massachusetts Institute of Technology's Sloan School and Stanford's Graduate School of Business are among the business schools that have heard from alums and companies across the country that it is the softer skills--communication, brokering compromises, managing conflict, developing relationships and leading groups--rather than strategy or financial analysis that are missing in MBA graduates.  And are doing something to address those weaknesses. 

Stamford's B School revamped its leadership-training curriculum this fall, now requiring all first-year students to take personality tests, participate in teamwork and management-simulation exercises and critiques of their people skills.  Professional executive coaches will watch the simulations and offer advice.

At Tuck, the leadership-development program, modeled on corporate programs, that was launched in 2004, puts all first year students in teams of five.  The groups complete coursework together, help each other with assignments and then rate themselves and each other on how well they operate in a team, including how well each of them "solicits feedback and acts on it" or helps "manage conflict."  Reports on their performance are used to inform the coaching sessions the students attend and to design personal development plans.

Says Warren Bennis, professor at USC's Marshall School:  "It isn't just nice--these interpersonal skills.  It's the stuff that's necessary to lead a complex organization."

It is only a matter of time, as they say, before law schools recognize the impact of "people skills training" and follow suit.  Not only are lawyers less educated both in school and in the workplace on the importance of developing these skills and the methods of doing so, the data shows that they are as a group psychologically and behaviorally more challenged  in achieving results.  Which makes this sort of training--whether at law school or on the job-- even more critical.

 

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A recent article in the New York Times on young 20-something Internet mega-millionaires quoted one as saying “You ask yourself, ‘Why am I not happier given how lucky I’ve been?’”

While we as lawyers, being supremely circumspect, would rarely verbalize this sort of “squishy” sentiment out in the open, given the levels of unhappiness in our profession, it is a question we should be asking ourselves. 

So here are some of the findings about "happiness," which has exploded as a subject of research over the last few years. Let’s start with the data on the current state of happiness in the US.

Recent surveys point to a relatively high “happiness quotient” these days:

·             86% of Americans are content with their jobs (General Social Survey)

·             76% are satisfied with their family income (Pew Research Center Survey)

·             62% expect their personal situation to get better over the next five years vs. only 7% who expect it to get worse

·             65% of Americans are satisfied over all with their own lives—one of the highest personal satisfaction rates in the world.

As the query of that Internet mega-millionaire illustrates, happiness is not correlated with financial resources or even political stability: countries like Nigeria, El Salvador, Columbia, Mexico and Puerto Rico (along with Switzerland, Denmark and Canada) register higher rates of happiness than the US in the World Values Survey. Other countries, such as Romania, Russia and other former Soviet countries, consistently score at the bottom.

This fairly rosy picture in the US becomes decidedly darker when we factor in the “happiness” data on lawyers:

·             Lawyers generally have one of the highest dissatisfaction rates with their work of all industries/professions, with 65% of young associates surveyed by the ABA last year intending to change professions within two years.

·             Lawyers also have the highest “personal distress” rates of any industry, exhibiting dramatically higher incidences of suicide, mental illness, divorce and substance abuse than other industries. 

Women lawyers seem particularly effected by these developments:

·             Fewer women are seeking law degrees: from 1963 through 2001 female enrollment at law schools climbed nearly every year, from 3.7% to a peak of over 50%; since 2002, however, the percentage of women in law schools has declined each year, currently down to 46%.

·             At a time of very high attorney turnover generally (over 20% leave their jobs every year), the highest drop-out-of-the-profession-entirely demographic is women.

·             In spite of many years of women in the "pipeline," only a small proportion of women stay to become partners in law firms (17%) or senior legal counsel in corporations (18%).

The message seems to be that, in spite of Americans' general glee, few lawyers are happy living the lawyer's life.

What Makes Us Happy?

As it turns out, over the last few years a wave of books on happiness, primarily written by academics, have been published. Among them are:

The Pursuit of Happiness, by David G. Myers

Happiness, The Nature and Nurture of Joy and Contentment by David Lykken

Happiness, A History by Darrin M. McMahon

Authentic Happiness by Martin Seligman

The Art of Happiness by the Dalai Lama and Dr. Howard C. Cutler

The Happiness Hypothesis by Jonathan Haidt

Stumbling on Happiness by Daniel Gilbert

Happier: Learn the Secrets of Daily Joy and Lasting Fulfillment by Tal Ben Shahar

Most of these books are based on David Lykken's findings that there is an individual “set point” of happiness to which most people revert, regardless of their life circumstances—illness, financial concerns, family problems. Lottery winners and paraplegics, those both accepted and rejected as partners or general counsel, all on average return to their baseline levels of happiness within a year.

If health and other circumstances don't impact our happiness, what does? Jonathan Haidt compares our emotional life in The Happiness Hypothesis to a small, conscious monkey riding a large, unconscious elephant: in many ways we are estranged from the great bulk of our own inner feelings. The running commentary in our minds about what we feel and why is often simply wrong, he contends. For example, research subjects unknowingly hypnotized to react in a specific way to a cue quickly come up with rational, and in their mind truthful, “explanations” of why they acted that way, even though those explanations are causally entirely beside the point: their reaction was programmed in their unconscious by the hypnosis. 

Not only are we not able to access a great part of our inner feelings, evidently we are not very good at analyzing the happiness data that we do have access to. Daniel Gilbert in Stumbling on Happiness explains that we are very bad at remembering what made us happy in the past and in predicting what will make us happy in the future, often overestimating the bang we will get and how long it will last. For example, people often list children as a source of happiness, yet the data indicates that children in fact are "extremely negative," "mildly negative" or have no effect on overall happiness. (More about this later.)

Could We Be Happier?

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What is the most important attribute to be looking for as you groom your young lawyers for management? 

A 2006 study reviewed in the Leadership and Organization Development Journal assessed the relationship between emotional intelligence and managerial effectiveness, confirming what you might expect.  A total of 38 supervisors (37 males and 1 female) and 1,258 subordinates from a large manufacturing organization participated. Data analysis found that the total MSCEIT score (an emotional intelligence assessment that I consider most reliable) displayed a strong positive correlation with supervisor ratings; that is, the more emotionally intelligent the supervisor, the more effective and productive s/he was rated by others in the organization.

First, I would point out that this study doesn't tell us whether these emotionally intelligent supervisors who were rated more effective actually were more effective than their lower EI colleagues.  All we know is that they were perceived to be more effective.  The implication being that even if those high EI supervisors weren't quite so great in the accomplishments department as advertised, their loyal team still saw them in the best possible light.

This distinction is particularly important in environments such as law firms and law departments, where dramatically high skepticism (averaging in the top 10% of the American population) creates hurdles that make it hard for managers to establish rapport and trust, much less garner appreciation for a job reasonably well done.  Second- and third-guessing is often standard procedure, regardless of how demonstrable  the accomplishment might be.  While emotionally intelligent managers may be in fact most effective, this and other studies demonstrate that they are in any event going to have the interpersonal skills to align legal staff and professionals on the same side.  Given the challenge of creating supportive cultures for growth and accomplishment in law organizations, identifying these kinds of leaders becomes imperative.

Two major subscores make up the MSCEIT total score.  In the study above, Experiential EI, which includes perceiving and using emotions, was found to be very highly correlated with high supervisor ratings, whereas the Reasoning EI subscore, which includes understanding and managing emotions, displayed no significant correlation.

Our study of emotional intelligence and lawyers (also using the MSCEIT) indicates that lawyers' scores in EI are generally a standard deviation below the general population (that is, 85 compared to 100).  In addition, lawyers score significantly lower on the Experiential subgroup than on the Reasoning one.  Their ability to "read" their own and others' emotions is notably low compared to the general population, and they also are not facile at "using" emotions, i.e., moving from a less appropriate emotion to a more appropriate one.  Their Reasoning scores are usually significantly higher than the Experiential ones, lawyers being evidently well-suited to logically analyze even the emotional realm.  The problem is that weakness in reading emotions creates a garbage-in, garbage-out result when that reasoning horsepower is applied to inaccurate information.  So lawyers often get blind-sided by what they hadn't originally correctly perceived .

This finding as to the importance of Experiential EI to effective management can be critical in the case of managing lawyers.  Not only should we be grooming our young lawyers to be emotionally intelligent managers, but we should also be specifically rewarding those who are expert at recognizing and using emotions, an item I would bet is not currently on any evaluation form.

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"We evaluate 'courage' as a behavioral characteristic of our lawyers, and we link this evaluation to compensation," says John P. Donahue, Senior Vice President,