Law People : Law Practice Management, Organizational and Personal Dynamics; Talent Management : Ronda Muir of Law People Management, Inc.

In honor of the endings and beginnings at this time of the year and the personal and professional resolutions that each of us aspire to for the future, it is fascinating to look to the life of the founder of modern psychology, Sigmund Freud. A recent entry in "The People's Therapist," a blog by a former S&C associate, Will Meyerhofer, who is now a therapist to lawyers, recounts some interesting information on Freud's relationship to strong emotions, which is summarized below.

Oliver Sacks notes in his book "Musicophilia: Tales of Music and the Brain" that Freud was known to not like music, quoting his nephew, Harry, who claimed Freud "despised" music.

Freud himself wrote about his reaction to music in the introduction to "The Moses of Michelangelo":

"I am no connoisseur in art...nevertheless, works of art do exercise a powerful effect on me, especially those of literature and sculpture, less often of painting...[I] spend a long time before them trying to apprehend them in my own way, i.e. to explain to myself what their effect is due to. Wherever I cannot do this, as for instance with music, I am almost incapable of obtaining any pleasure. Some rationalistic, or perhaps analytic, turn of mind in me rebels against being moved by a thing without knowing why I am thus affected and what it is that affects me."

His friend, Theodor Reik, wrote that Freud feared giving himself over to the mysterious effects of music on his emotions. Reik felt that Freud's resistance to music amounted to:

"[a] turning-away...[an] act of will in the interest of self-defense...[and the] more energetic and violent, the more the emotional effects of music appeared undesirable to him. He became more and more convinced that he had to keep his reason unclouded and his emotions in abeyance."

Let's see.  Super-analytic type who is uncomfortable with strong emotions determines to not let himself "give in" to those emotions, but to remain as fiercely rational as possible. Sound like anyone you know?

While it is reassuring to know that even the grand man of psychology struggled with understanding emotions that overwhelmed him, his strategy of dealing with them is less than heartening.  It is no wonder that when Leonard Woolf, along with his wife Virginia, visited Freud in London late in his life, Woolf described Freud as "a half-extinct volcano... sombre, suppressed, reserved."

Only a few months later, at the age of 83, Freud arranged for a morphine overdose to end his life.

Sometimes the hardest thing to do is the challenge that yawns most scarily right in front of us, the one we least understand and most want to avoid.

Meyerhofer points out that "the word 'freude' in German means 'joy.' The word 'dream' comes from the Middle English word 'dreme,' which means 'joy' and 'music.'"  He suggests that Freud may have retreated into joyful musical dreams at night, even if he wasn't able to embrace them during the day. 

Perhaps there is a hint in this etymology as to why Freud was so driven by his fascination with deconstructing dreams, dreams which like music reflect abstractions of emotions that he personally couldn't fully understand or give himself up to. If only analysis and rationality could provide all the answers.

Another rift on the etymology is that Freud possibly never truly lived up to his name because he wasn't open to the full panoply of emotion, wasn't able to experience the roller coaster that  both plummets us into the depths but also raises us up to the highest heights--a mysterious and sometimes painful ride that nonetheless informs every aspect of our feelings and ultimately our intelligence.

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Goleman Clarifies

In the emotional intelligence ring, there have long been two theories—those who think that EI counts for 80% of success and those who don’t.  Daniel Goleman’s 1995 blockbuster book Emotional Intelligence: Why It Can Matter More Than IQ is the source of much of this scrapping—he asserted in the original edition that IQ accounts for 10-20% of business success, leaving a big 80% gap attributable to other factors. Many think that EI fills that entire space—some contending that Goleman himself essentially said that at the time. 

As we have reported, over the years there have been a number of rounds on this question, with Goleman saying that he has been misinterpreted and others accusing him of retreating from his own findings. This past week, Goleman finally came out firmly with the declaration that “people seem to jump to the conclusion that EQ alone makes up that 80% gap—and it does not… As the person who put the concept on the map, I can tell you that they are dead wrong.”

While chastising consultants for over-selling emotional intelligence, Goleman also restates the importance of EI in the business world:

“It typically takes an IQ about 115 or above to be able to handle the cognitive complexity facing an accountant, a physician or a top executive. But here’s the paradox: once you’re in a high-IQ position, intellect loses its power to determine who will emerge as a productive employee or an effective leader. For that, how you handle yourself and your relationships — in other words, the emotional intelligence skill set — matters more than your IQ. In a high-IQ job pool, soft skills like discipline, drive and empathy mark those who emerge as outstanding.

Companies know this. Corporate surveys find that more than two-thirds of major businesses apply some aspect of emotional intelligence in their recruiting, in promotions, and particularly in leadership development.”

Emotional intelligence is critical to productivity, effectiveness, leadership. And businesses are smart enough to recognize that in their recruiting, professional development and leadership development. Except of course in the business of law.

Is It Your Blood Pressure?

In another corner of the EI world comes results announced last week of an interesting study : "the emotion-recognizing ability [is] reduced in people with high blood pressure, even after taking into account medication use and other factors."  Leading to "emotional dampening," hypertension evidently "reduces the ability to recognize anger, fear, sadness, and other emotions in people's faces."

According to the authors of the study, published in the journal Psychosomatic Medicine:

"In complex social situations like work settings, people rely on facial expressions and verbal emotional cues to interact with others. If you have emotional dampening, you may distrust others because you cannot read emotional meaning in their face or their verbal communications.You may even take more risks because you cannot fully appraise threats in the environment.”  

The authors believe emotional dampening also may be involved in disorders of emotion regulation, such as bipolar disorders and depression.  

This theory of emotional dampening also evidently applies to positive emotions.“Dampening of positive emotions may rob one of the restorative benefits of close personal relations, vacations and hobbies."

While there is no hard data on this that I am aware of, I would put bets on our lawyer population having outsized blood pressure, consistent with the pressure, stress and demands of the job.  And then there are those well-documented low scores in emotional intelligence that lawyers historically get.

Lack of trust, risky behavior, depression, heart disease, lack of close personal relations and little or no restorative time?

So that's it!

 

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One of the more challenging skills lawyers need to master is the ability to delegate--to younger partners, associates, and non-lawyer staff, and in this marketplace, to third party providers, like document reviewers and e-discovery firms.  And even to clients. 

But there is a lot of internal resistance in many lawyers to mastering that skill.  Perfectionism, wanting to stay in control and insecurity can sabotage efforts to delegate even when delegation is clearly the best route.  What if the delegee messes up and the delegator is left being held responsible?  What if the delegee performs the delegation in an entirely different way than the delegator would--how will s/he be able to evaluate the result? What if the delegee runs with the matter and excludes the delegator when s/he should be involved in making the critical decisions?  Or what if the delegee actually does a better job than the delegator might have done--will the delegator get at least some of the credit for that success or will s/he be bypassed altogether next time a similar assignment arises?.

With enough of these kinds of worries, lawyers can find themselves with overwhelming work and immense client bills because they are trying to "do it all."

While understandable, many of these concerns can be alleviated by simply delegating well.  The real problem often lies in the delegator's uncertainty about which part of a task is being reserved for his/her decision and which part is being delegated.

A good first step is to set up a four-part decision matrix.  This matrix identifies which issues you as the delegator retain ultimate control of and which ones others can make. The first two boxes contain the decisions you must make.  The second two boxes contain decisions that can be delegated to others.

In the first box are decisions that you have to make, and that no one else can, whether you are a managing partner or a junior associate.  For senior managers, these decisions bear on issues such as strategic planning and firm leadership.  For example, should the firm expand into another geographical or practice area market?  For the junior associate, the decision may be whether or not an assignment has been completed to the associate's satisfaction or which paralegal should provide assistance. 

In order to make the decision within this box, the delegator can consult with anyone who they think might have relevant information--the MP might ask the COO to confirm the start-up costs of a new office and/or the head of recruitment to ascertain the availability and cost of hiring expertise, but the delegator must make clear that s/he is seeking information only.  S/he explicitly reserves the right to make the final decision.  Similarly with the junior associate, who might go to other associates, staff or third parties to get the information s/he needs to feel confidant about the integrity of his/her work or the choice of a paralegal, making it clear that s/he seeks information only.

The second box is also for decisions that the delegator must ultimately make him/herself but in this box are decisions that come to the delegator as recommendations.  These recommendations are the products of an explicit or customary process that carries an assumption of expertise from the recommender, and are therefore usually approved.  For example, the executive committee may put compensation increases in this box.  There is an established method for those increases to be recommended--a compensation committee compares evaluations or an individual reviews annual performance--and while the delegator may ask questions or clarify reasoning, those recommendations are usually accepted.  For the junior associate, the recommendation may come from his/her administrative aid, recommending that a certain format be followed for documents or that a specific time-keeping procedure be used.  Or a third party document reviewer may recommend a certain procedure to follow for the best outcome in the document review.  These are recommendations the associate will likely accept unless s/he has a strong over-riding reason not to follow them.

In the third box are those decisions that are made by the delegee, but which the delegator is apprised of.  Guidelines are usually set up to give the delegee some limited discretion.  The professional development director, for example, may be empowered to determine which and how many trainings, conferences or other events lawyers and staff may attend at the firm's expense within a specified budget.  While the PD director reports to his/her supervisor quarterly and the firm management annually on those decisions and costs, his/her decisions are usually considered final by management until the guidelines change.  Similarly, the junior associate empowers a paralegal  to do specific authorized filings, only notifying the associate that they have been made. 

In the fourth box are those decisions that are made by delegees and that require no reporting to the delegator.  These are decisions with usually well-defined guidelines and little room for discretion.  The executive committee's HR director is empowered to enroll new employees in one of the approved benefits packages (determined based on recommendations and decisions made according to the second box) and s/he has no obligation to inform the committee of those enrollments.  The associate may have decisions relating to client meals, for example, in this box.  His/her AA is empowered to decide which of several approved catering companies to use and which menu of several to provide, with no expected review or revision of those decisions. 

Problems arise when the managing partner insists on reviewing and individually approving each of the benefits programs that new employees are enrolled in or a young associate second-guesses an experienced AA's choice of caterer for the client lunch.  Yes, there might be some incremental improvement because of the delegator's review but it's not worth the investment--any positive is offset by the terrible impact on general efficiency and morale.  If all decisions are subject to review and revision, progress halts and no one feels empowered or trusted to be responsible for the matters at hand.

There are caveats, of course.  Confidence in recommenders may require some experience to build, and guidelines are sometimes revealed to have unintended consequences.  But these and other obstacles are temporary ones that often can't be overcome until the rubber hits the road.  Refusing to delegate does not move anything forward.

On the other side of poor delegation are matters that should not be delegated but are: executive boards who tell the COO to determine whether associates will get bonuses, or associates who let the client tell them which conclusion to reach in their research.  The delegator may be looking to avoid responsibility for the decision or to keep from having to make a difficult one or may simply not feel qualified to make the decision.  Determining who should make the ultimate decision is critical here.

Once it is clear who the decision-maker is on each issue at hand and that is made clear to all parties involved, delegation becomes a simpler task.

What does your decision matrix look like?  Do others in the firm agree on which issues are in each box?  Executive coaching can make giant strides towards easing decision bottlenecks and improving morale.  Call us for a proposal.

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In a new CareerBuilder survey of more than 2600 hiring managers and human resource professionals nationwide, 71% said they value emotional intelligence in an employee more than IQ and 34% said they are placing even greater emphasis on emotional intelligence when hiring and promoting employees post-recession.  And 59% said they would not hire someone who has a high IQ but low EI, while 75% said they would promote a high EI worker over a high IQ candidate.

Why do these hiring managers value EI so much?  Because, they said, the high EI employees:

• are more likely to stay calm under pressure
• know how to resolve conflict effectively
• are empathetic to their team members and react accordingly
• lead by example
• make more thoughtful business decisions

What behaviors do these managers look for that indicate high EI?  Employees who:

• admit to and learn from mistakes
• keep emotions in check
• have thoughtful discussions on tough issues
• listen as much or more than they talk
• take criticism well
• show grace under pressure

Another recent announcement was the inauguration of the USF SELECT program, in which a small group of incoming University of South Florida medical students are being admitted into an elite program based on an evaluation of their emotional intelligence.  The SELECT program is based on the expectation that "students with higher emotional intelligence can become more engaged, compassionate physicians who work effectively with teams and can lead change in health care organizations." Although this is the first time USF has used emotional intelligence as a gauge of leadership potential, the goal is to eventually incorporate EI training into the curriculum for all medical students, a trend in medical school education that is spreading rapidly.  

The SELECT program will include peer and faculty "coaching" groups intended "to help them cultivate this skill set of emotional competence," according to the USF Vice Dean Dr. Alicia Monroe. 

In order to choose the incoming SELECT class, faculty submitted applicants to a 90-minute "behavioral event interview," a method of interviewing that is often used in the business world and is starting to be used by some law firms, but is rarely part of academic medicine applications. Students were asked to recall how they reacted to specific quandaries or important events in their lives and what they learned from each situation. Teleos Leadership Institute staff trained the SELECT faculty to look for "a grounded explanation in students’ lived experiences," Dr. Monroe said. "To see, through this, how the students articulated the way in which they reason, problem-solve and use self-awareness to interact effectively with others, to communicate empathy and to manage relationships.."

In asking how he viewed the relevance of the EI screening, one of the successful candidates stated that "Once we become more aware of how we interact on an individual level, we will be prepared to collectively lead efforts for systemic changes in healthcare delivery. This is the big picture and it is still abstract, but I hope this program sets us up to do just that."

Halfway around the world, the new Australian Prime Minister Julia Gillard's department is providing emotional training workshops and personal coaching to her cabinet and staff.  "The fundamental purpose...is to foster enlightened and responsible leadership," according to one of the providers.

What is the common thread here?  Emotional intelligence is no longer a "squishy" concept that starry-eyed granola eaters and new agers proselytize.  We lawyers are about to be set back in our perennial competition with doctors by their realization that EI conveys real advantages, something corporate managers are already well aware of.

Will lawyers get the message?  Or are we too smug in how enlightened we are already?

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One of the more interesting findings in emotional intelligence research is that people who read emotional cues in others are generally good at reading their own emotional states and vice-verse—those who read themselves well are likely to read others well also. Conversely, an inability to read either oneself or others signals the corresponding inability. These findings are so well-established that most EI assessments only test a person’s ability to read external cues—knowing that the results will apply to that person’s ability to read their own emotions as well.

While this correlation may seem logical, we know that the experience of emotions is often different from what that experience looks like from the outside. A number of explanations have been offered for this linked phenomenon—perhaps it is simply a matter of having the vocabulary to describe emotions generally, or having actually experienced the emotions in question.  

 

A new study sheds some light. “Embodied Emotion Perception: Amplifying and Dampening Facial Feedback Modulates Emotional Perception Accuracy” by David T. Neal, a psychologist at the University of Southern California, and Tanya L. Chartrand, a professor of marketing and psychology at the Duke University Fuqua School of Business, published in Social Psychological and Personality Science, reports that not only do those who have had Botox injections not express facially what they are feeling, they also have very little idea what others are feeling as well.

 

According to the study, an observer unconsciously mimics another person's expression, and it is the experience of feeling that facial expression that leads the person back to understanding the emotion that produces such an expression. In the experiment, women with Botox injected 2 weeks prior to the assessment were significantly less accurate at decoding both positive and negative facial expressions than those who had been injected with a facial filler that did not impact muscle function.

 

In a second related experiment, participants with a gel on their face (similar to a facial mask) that required them to work their muscles harder to make facial expressions could more accurately identify emotions in others.

 

What does this mean for us in law practice?

 

Lawyers consistently score lower than the general population on emotional intelligence. The base of emotional intelligence requires the ability to “read” emotions—which information is then analyzed as to how to best manage those emotions. If the underlying “read” is not accurate, then we are caught in a “garbage in, garbage out” situation that makes any analyses and management decisions (skills that lawyers are not deficient in) nonetheless invalid.

 

The stoic lawyer who does not express emotions may be the very paradigm of the inaccurate reader—unable to express these emotions him/herself, s/he cannot identify the emotions others are feeling.

 

The good news here is that a short intervention may well be all that is needed to improve the situation—while two weeks can dampen one’s ability to express and therefore read others’ emotions, a similar period of concentrated training in expression can result in a significant improvement.

 

As part of our high-potential coaching program, we are able to offer that training to your best business development and leadership prospects.

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The words being thrown around were trust, intimacy, empathy, vulnerability, honesty, transparency, communication, emotional intelligence, teamwork, forgiveness, feedback, collaboration, connectedness, courage, relationship-building.  It would be understandable if you thought that you had walked into a marital counseling conference or some new-age event.  

In fact, the setting was Georgetown University Law Center’s March 9th conference entitled "Welcome to the Future: Trends in the Delivery of Corporate Legal Services," led by Co-Director Mitt Regan.

After presentations on survey data showing how firms attract and keep potential clients (more on this in later entries), the attributes that were identified as being most conducive to outstanding client service were those listed above that make all types of relationships good and better.  And it was acknowledged that it can take only a few individual lawyer behaviors to destroy a client's trust, and in a startlingly short time.

Jeff Emelt, GC at GE, was quoted as saying that empathy is the quality he wants in his lawyers, which is particularly important when he gets legal advice he doesn't like.  While his predecessor valued his favored lawyer for being the best listener he'd ever met. 

Susan Hackett of the ACC Value Challenge said all the metrics used by firms and clients to capture data and set and meet goals need to be discussed with a lot of transparency and vulnerability--so clients can see how firms make their profits and even what those profits are.

Lisa Damon, member of the Executive Committee at Seyfarth Shaw, was instrumental five years ago in designing and promoting a firm culture that emphasizes "standing in the shoes of the clients," relying on transparency, communication and collaboration to weld strong bonds. While only into the first year of that program, Damon says that they already have delighted clients who are more engaged in the entire client/lawyer process.

Amy Schulman, Executive Vice President and General Counsel at Pfizer, was the featured speaker, discussing the Pfizer Legal Alliance, a program in its 3rd year that limits the number of firms that Pfizer uses to 20 for the bulk of its work. Pfizer requires that the firms use another value device other than the billable hour to determine fees ("If what you use to anchor the relationship is money, you’re going to lose, because it's not motivational at some point," according to Schulman), that they help Pfizer achieve an overall 15% reduction in legal spend, and that they work cooperatively with each other, as needed, to staff and manage projects. 

Each firm has an in-house relationship partner at Pfizer and Pfizer encourages secondments and sharing associates, even recruiting at law schools together with some firms. Twice a year Pfizer grades each law firm on performance issues ranging from substantive knowledge to responsiveness to willingness to collaborate, as well as how well they take the feedback they are given. This is, of course, a challenge for most lawyers--they are often highly defensive to anything that smells of criticism.

"We learned a lot about firms," Schulman says, "by whether they welcomed the feedback or responded by saying, 'You got it wrong.'" 

According to Schulman, making the PLA work is like developing other intimate relationships--it takes hard work, vulnerability and bravery--and ultimately requires a leap of faith. "Relationship-building requires a certain kind of emotional courage and confidence."

Most speakers acknowledged that feedback from clients is necessary to improve relationships--proactively asking for and acting on client evaluations should be the starting point of sophisticated client service.  But once the feedback is received, understanding how to respond at the time and in the future requires a panoply of skills that firms must identify, develop and support from the top down.  Inculcating these skills and values into the DNA of a firm becomes geometrically more difficult as the size of the firm increases.

As J. Warren Gorrell, Co-CEO of Hogan Lovells, pointed out, there is "a lot to be learned by firms from organizational behavior theory."

There were a couple of provocative questions.  Are women lawyers more likely to have some of these skills and therefore be able to deliver better service?  And if so, why aren't they being recognized and rewarded for those abilities?

And in the end does expertise always trump empathy or any of these other touchy, feely skills?  The conclusion seemed to be that regardless of the legal arena or degree of subject matter difficulty, quality of advice is considered a given from all firms, with clients repeatedly going to the qualified law firm that provides them with the better relationship as well.

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In order to achieve bottom line results that are more and more hard-fought, firms are frequently turning (some quite belatedly) to business management principles used in other industries--organization around teams, commodities work outsourcing, Six Sigma quality control, process and knowledge management efficiencies, and, in response to client pressure, estimating, budgeting and budget management systems.  Embedded in this trend has come the increased use of "metrics"--a word that has long struck fear into the hearts of lawyers, who didn't become accountants for a reason. It is a word we will be using frequently in upcoming entries.

In addition to establishing metrics for demonstrating, for instance, who in the firm does what and how, there are proposals to come up with a metric that identifies and quantifies the attributes firms should be hiring and rewarding in their talent development process.  

A new firm founded expressly for that purpose by Bill Henderson is Legal Metrics, whose mission "is to transform legal services through the power of metrics," that is, by taking a more "measured approach" to identifying and developing legal talent.  Henderson's firm proposes to ask partners "what values and traits they want in their lawyers...and then pour over the resumes and evaluations of associates and partners to try to identify those characteristics shared by" "successes."

This is becoming a growing and for the most part welcome area of research with potentially industry-changing applications.  

University of California Berkeley faculty members Marjorie Shulz, Professor of Law, and Sheldon Zedeck, now Emeritus Professor of Industrial/Organizational Psychology, published a paper in 2008 entitled "Identification, Development and Validation of Predictors for Successful Lawyering" identifying 26 discrete factors associated with being a successful lawyer.  They are working with the Center for Creative Leadership to help quantify and market advice on those successful predictors.

Although we have long been promoting the use of more sophisticated approaches to hiring and development (see KPMG Model Delivers Risk Management, Teamwork, Client Satisfaction and Diversity Too, Legal Thought Leaders Pinpoint People Management Issues as Critical, Law Firms Are Not Google: Hiring for Success, Assessing Courage and Courageously Assessing, The Outliers of Law--Embracing Heresy, Sotomayor and Predicting Who Rises to the Top of the Lawyering Heap, LSATs and Premier Law Schools as Recruiting Guides?,  Are Your Superstars Spoiling the Apple Cart?, etc.), there is in fact scant experience in the industry with those approaches. A few small, innovative firms have used assessments of one sort or the other to improve their talent management results, and we have often been the ones advising them.  But big-firm experience lags.

In a small step forward, a number of law firms--such as Orrick, Herrington & Sutcliffe, DLA Piper, Drinker, Biddle & Reath, and Morgan Lewis & Bockius, according to The Legal Intelligencer, as well as Baker Botts, Paul, Hastings, and Vinson & Elkins--have adopted "behavioral interviewing," a tried and true tool for most companies but one still being explored in this field.

In 2004 Baker & McKenzie undertook a comprehensive review of talent hiring and development that resulted in the custom construction of an assessment to be used for both those purposes and also a Harvard Business Review case study.

The firm's management was convinced that "pretty much everything that is discussed in terms of our strategy, from growing our business in China to opening a new office, comes down to people issues and opportunities somewhere along the line...and that the business we’re in is really a relationship business. Technical expertise is a given. The real differentiator is the added value clients experience from counsel who inspire trust, who fully understand a client’s needs and desires in the client’s context, and who relate effectively with the client on a human level."

The hope for what would be called the Development Framework that came out of that review was that it would "rejuvenate professional development and make inroads into curbing the firm’s attrition rate. At the heart of this strategy was an increased focus on recruiting, developing, and retaining employees with the highest potential. This did not always mean seeking out the “best” people so much as the “right” people (i.e., those attuned to the firm’s culture and possessing the skills, experience, and personal qualities expected by its clients)." (emphasis added)

Over an intensive two month global interview process in 40 offices, a group of psychologists identified 5 Key Performance Areas, and within the KPAs, 18 individual Activity Categories, and 14 Personal Qualities of successful lawyers, with a couple of surprises:  "being nice" and "being affiliative."  These findings became  the backbone of, among other things, the recruiting process, informing everything from interview questions and techniques to the post-interview evaluation and a detailed final candidate summary that projects skills and development needs, as well as likelihood of a successful fit at various levels--including associate and partner.

While there has been no published follow-up to this initiative, the standing of Baker & McKenzie as the world's premier firm by a number of metrics, with significant improvements in revenue and profitability during the period in question, attests to the potential this kind of approach can bring to a firm.

Of course there are skeptics--we are lawyers, after all--and some of the questioning is not misplaced.  Some consider this new inclination to quantify what it takes to be a good lawyer as simply dressing up the status quo in a pseudo-science, contending that Am Law partners can't be trusted to identify, in Henderson's process, success factors for recruits any more than they can do so now, where "like me" seems to be the criteria. Which has been demonstrated to result in an utter lack of diversity regardless of how you cut the talent pie.

Further, one wonders how such an approach--replicating the attributes of the current "successes" --augurs for partners being made ten years out  who are trying to do business with their more diversified and talent-current business peers.  Nor does Henderson's metric take into consideration the vagaries of the pyramidal business model and the impact of politics, which no doubt account for more "success" than most other factors. 

Others continue to point to a mistaken belief in the potential of test takers to manipulate these assessments.Then there is the contingent that takes exception to the entire ethos of planned careers and strategic hiring altogether. "The most important things that happened to me--in work and in life--were fortuitous. No statistical model could have predicted them," notes Steven J. Harper, an adjunct professor at Northwestern University and recently retired partner at Kirkland & Ellis.

In 2007 McKenna, Long & Aldridge thought there had to be a "better way to [screen candidates] than the typical 20-minute interview process" and instituted a 30-minute online assessment over the objections of its lawyers who were "concerned that we'd be labeled as the weird firm. But [so far] only one student has questioned the assessment."  The firm has been reported to be quite pleased with the results.  Evidently some recruiting directors at other firms have expressed interest in the program, but no one from firm managements.

Why not? According to the firm's recruitment director: "I think they are concerned with stigma--what will [candidates] think of us? They don't want to be different. We now have a market where firms could be more creative [about hiring], but lawyers don't thrive on change."

That there is a need and use for more sophisticated metrics in the recruitment and development of legal talent should by this late date be undisputed. But there is a danger in simplifying the inquiry to quantification that can easily result in negative returns. It is imperative at the outset, as Baker & McKenzie did, to identify who you are as a firm and who you want to be identified as going forward.  It is a sloppy undertaking with little hard data and many "soft" findings. But only by first doing so, can the emerging world of metric tools be intelligently added.  

As David Brooks wrote about the future of the US in a column earlier this year, so law firms might heed the same advice: "In a world of relative equals, the U.S. will have to learn to define itself not by its rank, but by its values. It will be important to have the right story to tell, the right purpose and the right aura. It will be more important to know who you are."  Certainly as applied to law firms, "values will separate the biggest winners from everyone else."

Ultimately, with respect to the emerging world of talent metrics, Aric Press's conclusion that "what matters is that the inquiries have begun" is also ours.  

 

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Muir will speak on Law Practice in the 21^st Century:  What It Means for You at the Women Lawyers Alliance annual meeting in Chicago on Friday, May 20.  Muir will review the massive changes that law practice is undergoing globally in this new century and what it means to individual lawyers and their law departments and firms in terms of competition, recruitment, staffing, client development, compensation, professional training and personal career management.  Join the Women Lawyer's Alliance and register for the annual meeting here.

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The Value Advisory issued a press release today announcing the formation of a veteran group of advisors to provide law firms with strategies and resources that align firm offerings and operations with their clients' objectives.  At a time of increasing client demands for value at a reduced cost, The Value Advisory works with firms to assess their clients' changing standards and deliver services that meet those standards--in a way that honors the firm's historical values and reputation and also profitably sustains its future.   

The Association of Corporate Counsel, the country's largest organization of corporate counsel, has identified six critical measures of value in the delivery of legal services and has already rated over 5,000 lawyers on those factors. 

Where do you stand with your clients?

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One of the more interesting topics that we covered at this week's audio conference for CCM on Partner Compensation systems are the trends occurring in the types of systems being used--globally, in the US in response to the current market pressures and in the course of an individual firm's development.

The data on global developments is not well updated.  A few years ago, a study done by Edge International found that US (at 86%) and Canadian firms (at 88%) strongly preferred subjective compensation systems, while UK firms overwhelming used lockstep systems (88%) and Australian firms were equally divided between the two. Also distinguished depending on geography were how frequently firms reconsidered compensation--with 3/4 of US and UK firms doing so every year, and Canadian (95%) and Australian firms (83%) even more consistently taking an annual look. The embrace of non-equity partnerships also differed depending on the country--with 58% of Canadian firms, 74% of US firms, 92% of UK firms and 100% of Australian firms having NEP tracks.  This information is supplemented by our and other consultants' experience in seeing local and recent changes. 

In the US, the death of lockstep has been declared a number of times over the past few years of market turmoil and there has been a concerted effort to analyze those subjective components  that can be evaluated and tied to efficiency and therefore profitability.  Hence the "project management skills" craze. Clark said he was seeing more interest in lockstep, particularly in the UK and South America, in recent engagements in an attempt to promote collaboration and firm solidarity. While we often recommend for this climate a system that similarly promotes "team profitability," we continue to see firms look to develop metrics beyond lockstep tin order to mold behavior and increase profits.

A single firm can cycle through a number of comp systems.  Smaller founder firms seem to often start out with a very subjective comp system that is essentially the founding partner telling each of the partners how s/he values their contribution.  As firms develop past the founder stage, more formulaic systems often are put into place to try to make the comp determinations seem more objective.  That system then often morphs into one that again considers more subjective factors, this time with sound reasons for promoting those factors.

Of course the primary concern that firms should be focusing on is what impact does their comp system have on the firm's profitability.  As pointed out in the call, money is not behavioral science's preferred motivator.  However, in the legal industry, there are few other metrics by which partners compare themselves. 

If we look at what little industry-specific research that we have says about the effectiveness of comp systems in raising profitability, the results are interesting but mixed, with particular uncertainty as to cause and effect.  Large law firms in the US with the highest profitability tend to base their compensation systems on more subjective factors (75% of firms with PPP higher than $700,000 described their systems as "subjective" while only 21% of firms with PPP of less than $300,000 did so), yet it may well be that rewarding subjective factors is simply a luxury that less profitable firms can't afford.  Yet again, rewarding those behaviors that are subjective may very well be the explanation for those firms' rising profitability.

Several years ago David Maister conducted a study to determine what factors made firms profitable, which he refers to in his book Practice What You Preach.  Of 74 factors analyzed, he found that 9 attitudes both predicted and drove profitability.  They are:

1. Client satisfaction is a top priority at our firm.
2. Putting individual interests ahead of those of the clients or the office is not tolerated.
3. Those who contribute the most to overall success are the most highly rewarded.
4. Management gets the best work out of everybody in the office.
5. Developing new skills is required, not just encouraged.
6. We invest a significant amount of time in what will pay off in the future.
7. We  treat each other with respect.
8. The quality of supervision on client projects is uniformly high.
9. The quality of the professional is as high as can be expected.

The big caveat is that having any one lawyer or group of lawyers agree with and comply with these factors did not a profitable firm make.   It was only those firms where ALL PERSONNEL--partners at all levels, associates and staff--endorsed these attitudes that profitability rose. 

Let us help you determine your firm's profile for profitability.

 

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Muir's "The Unique World of Lawyers" explores the ways in which the personal style of lawyers differs from that of the majority of Americans and how it effects both what lawyers perceive and how they are perceived.

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Muir will be the Keynote Speaker at Hofstra Law School's Boot Camp on Tuesday, January 11, 2011.  Her presenation “Emotional Intelligence—Your Secret Weapon for a Successful Law Practice”  will cover what the term ”emotional intelligence” means, the history of its discovery and development as a leadership skill, how lawyers score in emotional intelligence, how it is related to other assessed professional skills, what makes emotional intelligence a secret weapon for successfully practicing law in the 21^st Century,  and how to improve your emotional intelligence.

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Muir's "Emotional Intelligence for Lawyers" reviews the history of the development of emotional intelligence and how it applies to lawyers.

Muir's "The Importance of Emotional Intelligence in Making Partners" was awarded the Edge International Law Practice Magazine Award for excellence in writing. 

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At the Washington College of Law Annual Fellows Meeting and 2010 Futures Conference at American University, several presentations made on various challenges confronting the legal sector are worth noting. 

 

Developments in the Global Market

 

Peter Zeughauser, Chairman of the Zeughauser Group, predicted that "demand for legal services long term will grow" and that the U.S. will be a magnet for litigation involving global companies.  In his opinion, U.S. law firms should focus business development on the 1% of U.S. companies (2,270 entities) that are multinational companies, representing 48% of exports, 37% of imports and 74% of R&D.

 

He noted that China and India will eclipse the G-6 very quickly and American law firms should be focused on developing their practices there instead of in Europe.  In his opinion, if there were a Global 20 law firms, five Chinese law firms would be on that list today. One of them, also mentioned by other panelists, would be King & Wood, which has over 800 attorneys in 16 offices, including Palo Alto and New York. 

Zeughauser stated that there is a dearth of legal talent in the Emerging Markets - BRIC Countries (Brazil, Russia, India and China) and in the N11 countries (Indonesia, Philippines, Bangladesh, Egypt, Korea, Nigeria, Turkey, Vietnam, Iran, Mexico and Pakistan). To meet that challenge, a few Chinese law firms are presently recruiting U.S. law school professors to train their lawyers. 

 

Zeughauser also mentioned, as we have recently pointed out (see our entries "The Arrival of Outside Investment?" and "Reducing Regulation as a Productivity Prod"), that India will be a difficult market for American law firms to penetrate under current laws.  India extends reciprocity to  lawyers from countries that allow Indian lawyers to practice there. But because there is no national bar admission here-- admittance to practice law is determined state by state--U.S. attorneys may be the only attorneys in the world unable to practice in India. Panelist Will Hornsby, Counsel of the American Bar Association’s Division of Legal Services, contended that a U.S. national bar would be unconstitutional, with the ABA taking the position that Congress can’t regulate the practice of law under separation of powers. It has since been reported that ABA president Steve Zack requested President Obama address this issue during his trip to India this fall, but evidently nothing positive developed. 

 

Talent Management is King

 

Talent management was discussed as a key driver for law firm success and several presenters commented on various issues relating to legal talent.

 

American Lawyer Media’s Aric Editor-in-Chief Aric Press took the position that law firms do not take recruiting and retaining talent as seriously as their clients do.  

 

Caren Ulrich Stacy reported on working on research that would identify the best predictors of success for attorneys in law firms. Her new company, Lawyer Metrics, recently  founded with Indiana University of Law professor Bill Henderson and others, hopes to identify traits that firms can assess for purposes of selection and development. 

 

Patrick Lamb, founder of the Valorem Law Group, suggested that firms create attorney positions that are long term and provide career satisfaction even if they do not become partners.  Lamb also noted that just because partners have ownership rights, they shouldn't necessarily also possess management rights. 

 

Profile Search Group’s Ken O'Brien (to whom we extend credit for a succinct summary of the conference) noted that often firms have only themselves to blame for disastrous outcomes in hiring lateral.  Many firms have reduced their investment in professional development during the recession, significantly cutting their PD staff and/or budgets. Firms often fail to conduct comprehensive due diligence of incoming lateral partner candidates and do not have a robust lateral integration program that monitors the lateral’s business plan and actual business intake. In addition, firms often fail to track the cross-selling opportunities that the lateral’s proponents promised to deliver. His experience also supports the position that focused professional development programs will help firms develop alternative staffing models which yield competitive financial results. 

 

Mark Robertson, past chairman of the ABA’s Law Practice Management Section, made the point that attorneys need to develop project management skills to help understand costs, provide accurate estimates and deliver more value in a timely manner at lower cost.   

 

Simon Chester, former president of the College, an English solicitor and partner in the 500 attorney Canadian firm of Heenan Blaikie, noted that General Counsel are moving more to the center of company management and the Trusted Advisor role is moving inside the corporate law departments, which may require General Counsel to strengthen their management systems and management teams.  

 

Outside Investment in Law Firms

 

This continues to be a topic of discussion, as we have noted often.  Australia has permitted outside investment in law firms since 2007. The law firm of Slater & Gordon is listed on the Australian Stock Exchange and has tallied up significant financial gains.The Legal Services Act which becomes effective in 2011 permits British law firms to go public. It also allows U.K. firms to sell ownership in the firms to private investors and merge with other non-law firm entities. Lyceum Capital, a London-based investment firm, has already raised $500 million to target opportunities in legal services.

 

In the U.S., the Washington DC bar now allows attorneys and non-attorneys to join together in law practice partnerships, but so far other major jurisdictions have not followed suit.  The big question is what impact outside investment will have on how law firms are governed and managed. What managment role will outside investors insist on?

 

InnovAction Award

 

Every year the College sponsors the InnovAction Award intended to identify innovation and ingenuity in law practice management. Pro Bono Net, a national nonprofit organization working to increase access to justice through innovative uses of technology and increased volunteer lawyer participation, was the 2010 InnovAction Award recipient for their product, Law Help Interactive, which provides a national infrastructure for online document assembly and helps tens of thousands of low-income people each year complete needed legal forms. 

  

In closing, Aric Press noted that firms in the recently released AmLaw 200 survey were asked if they anticipated a fundamental shift in the legal services industry. The overwhelming response was “YES.”  Then when asked if they anticipated their firm changing its strategy, those same respondents overwhelming responded “NO.” 

 

And therein lies the rub.

 

Seize the competitive advantage by refining your firm's strategy. 

  

 

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Seat-of-the-pants projections by Hildebrandt as to the loss of associate positions over the next 5-7 years were published this fall to much hullabaloo.  By their lights, a very specific 27% of the 65,000 AmLaw200 nonpartner positions, or approximately 17,500, are likely to be cut or recategorized downward under the influence of the current market's prevailing winds.

The general notion that law firms are going to have to grow leaner and more efficient in both the associate and partnership ranks, which could well include reducing their numbers at least in the short term, has certainly been the gospel at our shop for over a year now (see "What the New Law Firm Looks Like") and the most recent data is showing the truth of that view.  Evidently assigning specific numbers to the net loss, however inexact the process, has jolted some to the potential bottom line impact on the industry.

The data over the last year or so is starting to demonstrate in stark real numbers the leaning of the traditional legal workforce.  The National Law Journal's recently released annual ranking of the 250 largest U.S.-based firms by headcount showed that total lawyers dropped by 1.1% this year, or approximately 1400 positions, compared to a decline last year of 4%--the biggest two-year decline in the 33-year history of the survey and only the second time on record that total headcount has dropped for two consecutive years.

Significant declines reached more than half of the firms surveyed, with the biggest drops at the largest firms. Of the 50 largest firms, 34 had headcount decline, and three lost more than 100 lawyers

Much of this year's decline came in the associate ranks — which fell by nearly 1,000 lawyers, for a drop of 1.5%, marking the lowest point for the number of associates since the survey started tracking them in 1985. Percentages of associates in lawyer positions has now dropped from a high of over 60% in 1987 to @ 48% this year. 

Partner numbers increased, but only slightly, by 0.6 percent, continuing a major slowdown over the last few years in the making of new equity partners.

NLJ 250 firms also reported this year employing an average of 49 "other" attorneys, compared with 46 in 2009, or a 6.5% gain. Steptoe & Johnson LLP reported that 34.9% of its attorneys were "others," and Covington & Burling reported 23.7%, while the law firm employing the highest number of "other" attorneys was Jones Day, with 274.

"Other" attorneys are defined as nonpartner and nonassociate lawyers and do not include temporary or contract attorneys. This year's jump continues a recent history of fluctuations in "other" attorneys. Last year, the average plunged by nearly 10%, while in 2006 and 2007 "other" attorneys increased by 15% and 1.4%, respectively.

During the recession, in order to keep the troops busy, law firms may have given their associates work that would have normally gone to contract attorneys.  But as the economy continues to improve, the ranks of "other" attorneys are likely to continue to swell, due to their lower cost and often more targeted experience.

As for the future of partners, a recent ALM survey of heads of the AmLaw200 firms found that 67% of those surveyed plan to ask partners to leave their firms next year; 31% plan to de-equitize others; and 57% are realigning compensation to reward partners who cooperate in change-agenda initiatives. The anticipated de-partnering is a significant but traumatic part of the resizing and the compensation step is a critical one in the competition wars (see in both cases our entry "Why Partner Compensation Will Go Down"), but neither are likely to be welcomed by the partners in the trenches.

Does your firm have a growth and compensation plan that takes into account the new reality and a protocol for managing expectations and change?

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At this year's Annual Meeting of over 2000 general counsel and senior in-house counsel, the Association of Corporate Counsel continued its promotion of the Value Challenge--i.e., making sure outside counsel understand what corporate counsel expect from them. So far, over 5000 lawyers have been rated on their competence in six critical areas.  And ACC hopes to double that number soon.

Janine Dascenzo, a member of the ACC Value Challenge Steering Committee and chief litigation counsel at GE, noted that her CFO expects legal spending to be reduced by 25% year-on-year, which far exceeds the savings some firms propose by holding rates for 2011 to 2007 levels. She advocated for lawyers adopting skills business has long used to realize profits on fixed-price contracts. 

Aileen Leventon of QLex Consulting, Inc. led the basic skills session on Legal Project Management, with three firms--Shook Hardy & Bacon, McDermott Will & Emery and Kilpatrick Stockton--demonstrating how they use project management principles and technology applications to profitably manage work priced at fixed fees or other value-based fees.

Leventon has learned a lot about client expectations in the course of teaching project management skills to more than 200 General Counsel over the past year.

According to Leventon, here are the six things GCs want their law firms to know:

1. Law firms fundamentally do not understand that legal spending is corporate overhead and has to be managed aggressively - consistent with every aspect of the corporate budget. Expenses are scrutinized by many internal stakeholders: CFO, Controller's, Investor Relations, and Procurement.

2 .Legal is not only not exempt, but is held to a higher standard because of the widely-held business perceptions that law firm lawyers make too much money and that legal work is rarely revenue-producing for the client.

3. Law firms must recognize that legal work is not an end in itself. Law firms are engaged because there are business problems - not legal issues. Business problems need results. Legal issues are only one of many factors that are brought to bear in addressing client matters.

4. Law firms must learn how to manage their work better. They need ongoing communication within their firms about how specific work links to the client’s budget so that matters are properly staffed. Firms must learn how to use planning and forecasting tools, just as the general counsel have learned to use matter management systems and e-billing.

5. Law firms should communicate at the beginning of the matter about assumptions supporting budgets and then initiate conversations when matters are coming in over budget. Too many law firms think that if an interim bill is paid, they do not have to discuss being over budget with the client. "They paid my bill so they know what is going on" isn’t sufficient.

6. Predictability is key. Even if a matter is coming in under budget or additional resources will not be required, the client needs to know that as soon as possible. The client's budget is a portfolio of matters--not just those handled by a particular law firm--and the surprise of coming in under budget at the end of the year is not received as favorably as a law firm might think.

How is your firm doing?

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The most interesting question, in my opinion, that was asked of me and Peter Zeugheuser at last Thursday's CCM audio conference on Origination Credit and Partner Compensation for the New Legal Landscape was not really within the purview of the topic.  It was "does compensation really work as an incentive?"  

The topic--for a broadly diverse audience--was an overview of law firm partner compensation systems and the forces that are shaping changes in those systems. Of course the assumption underlying all law firm compensation systems, and the concomitant imperative to align compensation with firm goals, is that they do work in achieving at least some part of our objectives.

But the truth is that the answer to that critical question is not at all clear cut--and the research that has been done could and probably should disrupt many of our settled ideas about partner pay. 

By happenstance,on Friday, October 1, the day after the audio conference, I had the good fortune to participate in a conversation with Daniel Pink.  Pink is the author of  the book Drive: The Surprising Truth About What Motivates Us, in which he summarizes decades of research that business has essentially ignored:  extrinsic rewards (i.e. compensation) are not the best motivators of productivity and profitability. Pink is an engaging speaker on the subject, as this video demonstrates (he along with my college Psych professor Barry Schwartz was named one of TED's Ten Best Speakers ) and has a particular perspective about the practice of law.  Although he is a Yale Law School graduate-- "something I regret" --"to his lasting joy, he has never practiced law," as his website says. 

Pink's position is that while carrots and sticks worked successfully in the twentieth century, that’s precisely the wrong way to motivate people for today’s challenges.  In Drive, he identifies three "true motivators"—autonomy (the ability to control your work), mastery (of skills or subject matters), and purpose (which gives a personal meaning to your work).  In support of his premises, he gives a number of examples of solid research in which those motivators soundly trounced financial rewards, even in such objectively hard results as sales and profits. 

Pink's conclusions rest on a line of research starting in the 40s with Maslow's "Theory of Human Motivation," which posited a "hierarchy of needs," in which, after a minimal amount of compensation, other benefits like appreciation, mastery, meaning, etc., were more motivating. In that vein, David Maister did an interesting study  of 139 law firms a number of years ago looking at what most aligned with profit, and found that attitudes held throughout the firm were more predictive of profit than compensation policies.

With demonstrated high levels of pessimism and need for autonomy and also low resilience and sociability (among other attributes), coupled with the expectations of the workplace, lawyers are a particularly challenging, and perhaps even unique, group to motivate.

In response to my question about his take on the world of lawyers, Pink said that he had spoken to a number of law firms and that good motivators weren't in place at most firms--young attorneys are given very little autonomy to direct their work or careers, they are kept in a hierarchical ladder that doesn't recognize individual mastery and they find little personal meaning or purpose in what they do. In fact, Pink has devoted several pages of Drive (pp 98-101) to law firms as the poster boys of outdated industrial-age thinking.

Pink's views have to be taken in the context of an earlier book, A Whole New Mind, in which he contended that the era of “left brain” dominance, and the Information Age that it engendered, is giving way to a new world in which “right brain” qualities--inventiveness, empathy and meaning--predominate.  According to Pink, the future belongs not to the analytical types--lawyers. accountants and computer programmers are the examples he mentions--but to "a very different kind of person with a very different kind of mind."  In other words, the analytical skills are susceptible to being out-sourced.  In a fast-moving, inter-related world, innovation, empathically identifying with others' experiences and providing purpose can't be.

Pink's emphasis in looking at motivation, therefore, is to find what will bring those critical 21st Century skills to the fore.

But if extrinsic rewards are not that motivating, how is it that we lawyers are obsessed with PPP and compensation? Given how many lawyers game their comp systems to make the last nickel or change firms for an extra dime, it's hard to see how money isn't a motivator, right?  One explanation for this behavior is that in a one-metric world, highly competitive lawyers are going to reach for the top of that metric, whatever it is. 

But compensation doesn't have to be the only metric and it is by all knowledgeable lights not the motivational tool of choice.  Our experience is that firms who are concerned about their lawyers being dissatisfied about the level of compensation usually find that in fact the fiercest dissatisfaction comes not with regard to financial rewards but other aspects of the work experience---communication, respect, recognition, investment in training, etc. In nearly every case, lawyers will trade compensation for non-financial benefits--better support for their career objectives, a seat at the governing table or more control of their working lives.

These three factors are certainly not the final words in the discussion about motivation and compensation. We will be looking at positive psychology's contribution to the field and some startling results achieved simply by raising the mood in the work force (something many law firms could benefit from). There are also some amazing insights that have been achieved into the best function of rewards, whether we are better off rewarding efforts or results, which I will elaborate on in a later post.

But according to Pink, if we could start from scratch to build a system that motivates the highest performance,  we would make sure we offer our lawyers the opportunity for more automous, individually purposeful work that provides them with a sense of mastery. 

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There are only two bases on which most legal services are ultimately judged: 1) outcome and 2) interpersonal interaction.  Of course, price is important but a wide range in price is tolerated as a function of 1 and 2.

It can be very difficult for a client to judge outcome -- what part of the results in a particular trial or deal was achieved due to one's own lawyer's competence and what might be due to weak or strong witnesses or deal terms, the client's role, poor or great opposing counsel, a sympathetic or simply mistaken judge or just pure luck? Even, perhaps particularly, lawyer clients are not particularly good at determining the interplay of those factors.

Add to that complex situation that lawyers often sabotage themselves. As we noted in the last entry, there is good data indicating that lawyers as a general matter do not themselves judge well the likelihood of success in matters--usually (and increasingly) conveying unrealistically high expectations to their clients. Thus, clients may in fact be disappointed because of their over-enthusiastic lawyers setting too high a bar, rather than because of any real incompetence of those lawyers in conducting the matter.  But how's a client to know?

So let's stipulate that judging the quality of counsel by outcome is difficult.

The other most common basis for evaluating legal counsel is their interpersonal skills. While we are notorious among the lay public for our abilities in that area being held in low regard, even lawyers don't see much to applaud in many of their brethren.  According to a study by BTI, "personality issues" is one of the four main reasons general counsel fire outside counsel. Surprised? The same survey found that general counsel often keep an "arrogant" list--lawyers who, no matter how appropriate they might otherwise be, the GCs wouldn't be caught dead hiring just because interacting with them is so maddening.  Of course that doesn't say anything about those particular lawyers' skills.  But if those lawyers are in fact arrogant because they are very, very good, as more than one lawyer has contended, my bet is they are not getting the result in terms of new business that they were looking for. 

In a fascinating study recounted in Malcolm Gladwell's book Blink, the way doctors talked to their patients predicted which doctors were most likely to be sued.  A very short verbal interaction between doctors and their patients were recorded.  The doctor's actual words were obliterated, but the tone, cadence, and pitch were retained.  When participants rated these doctors for various attributes, one attribute was highly accurate in predicting the likelihood of a doctor being sued.  The attribute was dominance, which easily translates into the arrogance, or I-know-better-than-you, that those general counsel in the BTI study, and many other clients, complain about.

Why do we come off so poorly in this area?  Data from the Meyers Briggs Type Indicator gives some insight. The majority of the American public works to create harmony in relationships, while most lawyers are bent on demonstrating that they are right.  Americans are largely concrete thinkers, while most lawyers are conceptual, which can come across as "head in the clouds".  Lawyers have a lower tolerance for "process" than most Americans, wanting to get to the bottom line as quickly as possible, and as a group they tend to talk less and listen less as well.  Other trait data reinforces that picture--we are likely to be combative if a conflict arises or otherwise simply walk away to avoid it.  We don't rebound easily from a mistake and therefore both project our "rightness" and become highly defensive if questioned.  In short, as a group, we are not naturally gifted relationship builders.

Personalities are not easily if ever changed.  What can be improved, however, are specific behaviors. We can teach our young lawyers to manage client expectations carefully, to help the client understand the complex interactions at work which affect the outcome of matters, and to replace some of those "lawyerly" interaction styles with more client-friendly ones.  And your professional development, performance evaluation, promotion and compensation systems should all recognize and reinforce the importance of those behaviors. 

 

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Loftus suggests that many of the most overconfident lawyers are likely to be senior partners who may not typically seek out review or feedback.  She recommends that law firms take affirmative steps to insure third-party feedback in all their case management systems.

She also suggests that lawyers regularly obtain feedback by sending their clients anonymous survey questionnaires at the close of every case, including questions that target the issues surrounding the management of client expectations about the achievement of goals in a particular case.

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According to a recent article in the ABA Journal, "Law schools need to do more than teach the legal basics--they also have a moral obligation to produce healthy and satisfied lawyers."  Specifically, Michael Serota, a recent law grad, suggests in his opinion column in the New York Law Journal that law schools "help students identify their professional values and make individual career decisions that correspond to those values."

Serota cites the Peterson study finding unusually high rates in lawyers of depression and other signs of distress, such as heart disease, alcoholism and drug use (see also our entry The Depression Demon Coming Out of the Legal Closet), and four ABA studies conducted over the last 25 years confirming chronic professional dissatisfaction--one out of every four lawyers is dissatisfied with her job. The Peterson study found lawyers suffer from the highest rate of depression of all professionals after adjusting for socio-demographic factors and are 3.6 times more likely to suffer from a major depressive disorder than the rest of the employed population, as well as being more likely to develop heart disease, alcoholism and drug use.  Professor Susan Daicoff has noted approximately 20% of the entire profession suffers from clinically significant levels of substance abuse, depression, anxiety or some other form of psychopathology. Let us add to these studies various others that have identified very high rates of suicide, divorce and mental illness among lawyers.  According to Serota, researchers have also found that mental illness and distress are responsible for the majority of attorney malpractice and disciplinary proceedings.

These findings point to a massive amount of individual suffering across the country, as well as significant costs to society in the form of increased health and malpractice expenses and a plethora of poorly or under-served clients. This circumstance is one clearly worth addressing, and one that can in fact be remedied.

We are often asked if the culture or pressures of legal workplace environments cause these mental health problems.  We believe that pervasive personal traits in lawyers--such as high levels of pessimism, competitiveness, introversion and conflict-avoidance and low levels of resilience and sociability--as well as ignorance about how to manage their implications underlie many of these disheartening statistics. And we have good evidence that those traits are already in place when students enter law school. The law school environment of similar personal types simply intensifies those attributes and can exaggerate their negative tendencies. 

Further, most law students enter law school with a different vision of how they are going to practice law than law schools (and most of their law firm clients looking for talent) envision, resulting in the poor alignment of values that Serota notes.  Research done in the area of positive psychology has determined that promoting the use of personal strengths is a means to higher job productivity and satisfaction.  As is the alignment of personal values with that of the workplace.  Unfortunately, research by Sheldon and Kasser found that as early as their first semester of law school, students begin to shift from focusing on their internal value systems (that which gives them pleasure and meaning) toward an increased emphasis on external values (such as grades and competition), leading to decreased satisfaction and overall well-being. 

Using strengths and aligning values requires, of course, understanding one's strengths and values and how well they match with those of the profession and individual firm one hopes to join.

Unfortunately, the level of this kind of awareness among lawyers must be one of the lowest of all professions.  And even fewer lawyers, if aware, know how to affirmatively use that information for greater productivity and satisfaction.

Thus, it is not surprising that studies find, for example, that within six months of entering law school, students experience significant decreases in well-being and life satisfaction, and substantial increases in depression, negative affect and physical symptoms. 

The American Bar Association, the Association of American Law Schools and the Carnegie Foundation for the Advancement of Teaching have all devoted substantial time to making recommendations as to how law schools might address these concerns. We and other consultants to the industry offer our viewpoint and suggestions.  See among others our entry Growing Leaders at Harvard and Other Business Schools. 

Law schools have responded by doing little, if anything.  Staff members with little training in the underlying psychological issues continue to offer ad-hoc, after-hours "career counseling" that doesn't help students recognize or address the personal challenges of lawyering. "By ignoring the topic of professional satisfaction in their curricula, law schools create an institutional misconception that the personal challenges of lawyering are peripheral to the practice of law. But because the individual is part and parcel with the professional, personal problems will necessarily affect the professional environment," Serota asserts. 

Does the mandate to educate lawyers include educating them in how to ply their trade with satisfaction and in good health? Will law schools ever put in place programs that further those ends? Lots of different perspectives on this one--see the comments.   

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In a recent interview about her book, Mindset: The New Psychology of Success, Dr. Carol Dweck, the Lewis and Virginia Eaton Professor of Psychology at Stanford University, explained how a person's mindset can account for success. 

She identifies two major mindsets--fixed and growth.  In a fixed mindset, we think we know our strengths and weaknesses, believe that they are "fixed" and think we should only attempt undertakings that use those strengths.  This type of person often cites genetics or background as limiting factors to their productivity.

With a growth mindset, we believe that we can grow into the skills needed for success. That is, we have the attitude that with analysis and persistence and feedback, we can stretch and extend our abilities over time.  The basis of these differences in mindset lie in one's sense of control and optimism--attitudes that have long been associated with greater success and sense of well-being.

Dr. Dweck's research on athletic performance is intriguing--the more athletes believe that their success is a function of effort and practice (as opposed to "natural talent"), the better they do.  Even more importantly, the more they believe that their coach thinks their success is a function of effort and practice, the better the athletes do.  

She also points out that in India and Asia, the common belief that children are blank slates at birth who can learn anything help people there succeed.

Her research also has relevance to those of us practicing law.  As measured by various assessments, lawyers are highly pessimistic and also have low resilience to setbacks (an indication of low sense of control). When gauging ourselves, and particularly in mentoring others, it is important to focus on the process--how much time and energy is being put into the effort and how persistent the person is.  Encouraging those traits will pay off with better performance over time than praising how "smart" someone is or how "natural" they are at something.  In fact, that type of praise is shown by Dr. Dweck's research to actually lower productivity--trapping the person in the narrow range of their perceived ability and making them fearful that they can't always live up to that talent or go beyond it.

Lawyers are also not inclined to take risks and therefore are less likely to proceed, whether personally or as a firm, when they are not certain they are likely to succeed.  In this time of fast-paced changes, however, Dr. Dweck points out  the disadvantage of such a fixed mindset.  With law practice undergoing tremendous transition, that reluctance can put both a person and a firm at the back of the evolutionary process that will produce better services. 

Dr. Dweck has developed an assessment to determine one's mindset and strategies for changing a mindset from a fixed one to one of growth, both of which we can offer as a part of your complete professional development plan, whether for one attorney or a large group.

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Muir participated in a panel discussion last week at the Women Lawyers Alliance first Annual Conference, held in Chicago.  Muir and fellow panelists author Shaunti Feldhahn, eminent psychologist Dr. Florence Denmark and psychologist/coach Karen Kahn identified some of the challenges and facilities women have in making their mark as leaders in law firms, and also addressed specific questions on how to improve rainmaking skills, solve the perennial work/life dilemma, and give effective feedback to junior lawyers. 

Attendees had this to say:

• "Ronda Muir is terrific." 
• "Frank and pragmatic." 
• "Ronda knows so much--I would like a substantive presentation from her alone."

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In case you haven't been keeping tabs on the school yard fights about emotional intelligence, you can get a quick taste by checking out the Newsweek NurtureShock Blog interview last fall (and its related predecessors and successors) of Daniel Goleman, who became the once and forever media champion of EI with the publication in 1995 of his book Emotional Intelligence; Why It Can Matter More Than IQ, followed by more articles, books and interviews than you can count.

Po Bronson and Ashley Merryman, authors of 2009's NurtureShock, which selectively undercuts the validity of various social-improvement efforts while trumpeting their own views, took on Goleman on the topic of "is 'emotional intelligence' real" (note the internal quotes), asking him questions that are "probing" by their lights and "gotcha" by others'.  Goleman sat still for a few answers, which the NurtureShock people later summarized as "no real data."

The issues at hand are longstanding ones.  Goleman published his book at the time that the then Yale researchers John Mayer and Peter Salovey were just formulating some of their theories about emotional intelligence.  I have it from them directly that Goleman was one of the few in the audience listening to their updates on the state of the research and they still rue his jump on publishing the material.  He was a NYTimes journalist at the time and could tell from the response he was getting that people were interested in emotional intelligence, and that it struck them as true. His article on emotional intelligence in the Harvard Business Review had the distinction of being the most reprinted article of any that had been published to date.

But Goleman did stretch in trying to connect the dots between the nascent research and the exciting implications he could imagine for business.  Salovey, now Dean at Yale, has repeated in many forums what Bronson and Merryman cite, that Goleman went further than the research did. There is less animosity and divergence, though, than that statement might suggest.  Certainly Salovey and  Mayer are convinced of the existence of emotional intelligence and its importance and have conducted and collected some fascinating results about it.  They themselves devised the definitive "abilities-based" assessment for EI that I and many others use.  Goleman was just the sometimes overenthusiastic messenger, which he tries to ratchet down in the latest editions of his book.

Some argue that neuroscience is absorbing and outdating aspects of psychology.  "Executive function," occurring in the prefrontal cortex, is evidenced in the brain's maturation and is a significant driver of higher functions, such as organizing complicated work and relating to others in complicated social circumstances.  The NurtureShock folks are laying bets on that function outdating the concept of emotional intelligence at least to some extent.

Goleman did politely preface his comments in the interview with Bronson and Merryman by saying that he had heard NurtureShock was good, although he pointedly said he hadn't had time yet to read it.  And he thanked Bronson and Merryman for the refreshing chance "to take part in intelligent and civil discourse."  In turn, they thanked Goleman for being "generous" with his time and "welcomed" him back for further discussion, before pointing out the questions he didn't answer.

But, as various commentators implied, evidence abounded in the interchange that neither high executive functioning nor high emotional intelligence guarantees a cogent or even respectful approach to this particular controversy.

Thankfully the research goes on.

Stay tuned.

 

 

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Muir recently led an Introduction to the Business of Law seminar for junior associates at an AmLaw 100 firm. The presentation is customized to the firm and is gauged to bolster associates'  engagement and loyalty and to improve their productivity. 

Topics include a definition of terms, such as utilization, realization and cash management, and a discussion of what drives the economics of law firms, the impact of current marketplace trends, as well as how all these factors influence every associate's career, and what they can do to benefit themselves and their firm.

Director of Professional Development: "Associates called me specifically to thank me for setting this up; others said that the topic answered a lot of questions they wanted to know about (but probably wouldn't have asked). Several who didn't make it called to ask if I had recorded it because everyone said it was a good presentation...plus I appreciate that you were great to work with."

Partner in charge: "This was a very helpful presentation--a number of associates came up to me afterward to say how thought -provoking it was. It is difficult at times, particularly with the most junior associates, to get them to ask the questions they want to ask. You answered many of them in your presentation. We look forward to doing this again."

Firm Consultant: "The presentation was excellent. Law is a business like any other business. Every attorney, particularly at these large firms, should know about what you discussed in your presentation."
 

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Should we be identifying and spotlighting our superstar associates? Recent research may be pointing to an unexpected answer. 

Economic tournament theory addresses competitive situations where success is based on relative rather than absolute performance (think sports games vs. standardized test results).  While competitive situations can often lead to motivated employees who work hard for top spots, recent research has found that the presence of a "superstar" can reverse that dynamic, making the competitors give up in the face of likely defeat.

Jonah Lehrer's article in the April 3-4 weekend edition of The Wall Street Journal specifically raises the question as to whether these recent findings in tournament theory about the disabling effect of superstars might account for, among other things, lackluster performance of associates in law firms. Given that this particular tournament often ends in an up-or-out decision (particularly given the recent trends), and that the number of lawyers who make partner will be even fewer than the historical few, the supposition is made that once associates recognize they are not up to a superstar level, they may actually lower than performance. 

As further ammunition for that concern, we note that the recent trend toward merit-based promotion and compensation systems will make the superstars more apparent to everyone in the firm and also earlier than under the old lock-step system.  So what do we do now?

Lehrer's article implies that hiring the "best" candidate, if it means someone who will leave the others in the dust, might not be the best approach.  Should firms really consider such a "not the best" approach?

We would make a more pointed recommendation--hiring only those candidates who can truly compete will keep the tournament in a healthy realm.  Firms can start by hiring a smaller class that they heavily invest in (in terms of assessing initial strengths and weaknesses, providing professional development and supporting personal morale).  Couple that increased "glue" with the possibility of a larger proportion of the smaller group being likely to make partner, and firms are likely to be well on the way to a harder working associate group.  And that scenario is consistent with other trends encouraging lower leverage.

A win/win all around.

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In a short followup to our last entry on diversity, note that Kathleen Sullivan, a woman with impeccable credentials, has taken the historic step of becoming the first female name partner at an AmLaw 100 firm: Quinn Emanuel Urquhart & Sullivan. Congratulations, Ms. Sullivan on a giant step for all women lawyers everywhere.

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Back in 1998 management guru Peter Drucker suggested that the capability to operate productively when change is the norm would be critical in the 21st century. Much has been said of late on this issue of managing change when change is the norm, including articles in the Harvard Business Review and from McKinsey.

There are big differences in approach and execution between, on the one hand, bringing about a change and making it stick and, on the other, embedding into an organization the capability to grow in a business environment where change is constant. The first attempts to bring about a single change in an organization that is sluggish and resistant. The second is about developing within an organization a comfort with ongoing change and the ability to leverage that comfort for its own ends. The suggestion from Drucker and all those that have commented since on this subject is that this ‘agile and preemptive organization’ is the future--a place where a change management program, at least as we use that term today, is not necessary.

There are challenging aspects in attempting to change an operation to an agile and preemptive organization. Many conventional values and beliefs about what is, or is not, best practice must change. These two bear mention: The underlying acceptance of hiding or burying bad news and/or spinning accountability to avoid blame must be seen as entirely unacceptable, even if things ultimately turn out for the best. Defensiveness and avoidance of conflict are both attributes that are central to many lawyers’ work style. The logical consequences of those attributes are self-and-other deceiving and justifying behavior, and in the old paradigm often produced a negative result—blind spots in client service, lack of responsiveness to colleague and client feedback, and ultimately exposure to malpractice claims. These behaviors now must be seen as a greater sin than not achieving expected base-line performance. Although frustrating to senior management in stable times, this behavior can have a disastrous impact in times of turbulence. This change is very difficult to bring about in real terms, and the solution is not just a no-blame culture, because people justify and deceive not just to avoid blame.

Another example relates to the conventional view of planning. Making long term plans in times of change is forecasting in fog. Visions are fine as long as they remain visions. The kind of planning that is now required is the type that adapts, flexes and is capable of responding to new opportunities on a continual basis. The fact that only 12% of strategies are ever executed may help in a perverse way, but this change requires a whole new attitude to feedback and accountability.

Peter Senge, author of The Fifth Discipline: The Art & Practice of the Learning Organization, also contends that in a rapid-fire, information-driven, technology-powered world, success is contingent on our individual and corporate abilities to adjust, adapt and learn. The organization, therefore, must incorporate processes of reflection and evaluation into its organizational systems, he says. Leaders must commit to their own personal learning as well as fostering an environment of learning in their organizations. We lawyers are often on a “drive to closure” escalator that makes it hard to step aside and undertake that sort of reflection.

Chris Argyris, emeritus professor at the Harvard Business School, advocates "double-loop learning." He takes the position that most people define learning too narrowly as mere "problem solving," so they focus on identifying and correcting errors in the external environment.  If learning is to persist, managers and employees must also look inward to reflect critically on their own behavior, he says, identifying the ways they often inadvertently contribute to the organization's problems, and then change how they act. In particular, they must learn how the very way they go about defining and solving problems can be a source of problems in its own right.

There is much of this accommodation to a new constant-change climate that falls into what is essentially an emotional category—how to appeal to and acclimate people who are not by their natures or histories comfortable with change. For example, lawyers are notoriously risk-resistant. Change is therefore anathema because it is by definition taking a risk. How do we effect a change in so fundamental a trait? A trait that is useful when advising our clients yet perilous if allowed to shape our practices? And not only must our approach understand and appeal to our deepest inclinations but it also demands that we put into place more objective, operational changes in the shape of a whole new set of specific working practices.

The problem is that so much of the solution to achieving this new business model of accommodating, no, even encouraging and celebrating, change will not be found in our practices of the past. 

It is a brave new world--one which we would prefer to avoid.  But can we afford to?

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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.

 

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Firms are placing their futures at risk if they cannot identify, develop and empower the next generation of leaders.  So it is no surprise that more law firms are investing in leadership development.  For example, according to PaLAW 2009's 14th annual Managing Partners Survey, cited in the November 23, 2009 issue of The Legal Intelligencer, the number of firms surveyed that provide leadership training at any level increased from 40.5% in 2008 to 67.7% in 2009, almost a 60% increase. 

What does it take to be a good leader?  And do we lawyers have what it takes?

There are numerous theories about the best style of leadership--see  Primal Leadership (2002) by Goleman, Boyatzis and McKee for an informative evaluation of 6 major styles. Apart from style, Richard Daft, author of The Leadership Experience, cites numerous studies that have sifted out five recurring personal attributes of successful leaders: openness to experience, emotional stability, conscientiousness, agreeableness and extroversion.

If you look around for potential leaders in your firm, chances are few of your colleagues possess all five of those attributes.  While conscientiousness is something lawyers tend to have in spades, openness to experience (also known as risk tolerance), emotional stability (or emotional intelligence) and agreeableness (aren't we hired NOT to be agreeable?) are all factors that in various studies lawyers tend to fall short on. Certainly, we have clear and robust data that most lawyers (over 70%) are introverts, rather than extroverts. 

So can introverts lead?  Successfully, that is?

Yes they can.  If the concern is that introverts tend not to be charismatic, outgoing personalities, Jim Collins's book Good to Great: Why Some Companies Make the Leap . . . And Others Don't provides some comfort. Collins discovered that glitzy, dynamic, high-profile CEOs are actually a hindrance to the long-term success of their corporations. Charismatic leaders are attractive to others, but they may be less effective in drawing people to the mission and values of the organization itself.

Collins contrasts Lee Iacocca, Chrysler's leader and spokesperson in the 1980s, with Colman Mockler, the CEO of Gillette from 1975 to 1991. While Iacocca almost single-handedly steered his car company away from disaster and put it on the road to prosperity, after his retirement Chrysler's profits faltered, and the company was sold to a German rival five years later. Apparently Iacocca had done little to invest in his successors or build a culture that would ensure the longevity of Chrysler.

In sharp contrast, Mockler made personal sacrifices and took substantial risks for the long-term success of the company and the profits of the shareholders, and he was so effective that $1 invested in Gillette in December 1976 was worth $95.68 in December 1996 and eventually earned a significant premium when the company was sold to P&G in 2005. Laconic and reserved, Mockler labored in relative anonymity for a big-time executive; he was a man who prioritized the success of his company over ego gratification.

Mockler and executives like him are examples of what Collins calls "level 5 leaders," those who are modest, self-effacing and understated, and display a workmanlike diligence—more plow horse than show horse, they set up their successors for even greater success in the next generation.

Leadership guru Peter Drucker goes further to say that "charisma becomes the undoing of leaders. It makes them inflexible, convinced of their own infallibility, unable to change."

So maybe we introverted lawyers, likely to be low on the charisma meter, may have some hope of mastering leadership. Certainly being people who think before we act and listen before we talk can be useful in leadership roles.

Successful leadership may also be enhanced by introspection--a natural for introverts. Leaders who scrutinize every aspect of their leadership and personality (and that of others) may be able to find internal motivations and assumptions that contribute to dysfunction and inefficiency.

Another way that introverts may be able to surpass the traditional leadership attributes is in their ability to "make sense." Wilfred Drath and Charles Palus at the Center for Creative Leadership explain that "most existing theories, models and definitions of leadership proceed from the assumption that somehow leadership is about getting people to do something."  Essentially cheerleading.  That is an effort that requires relish for and persistence in being extraverted.

But Drath and Palus reimagine leadership as "the process of making sense of what people are doing together so that people will understand and be committed." Leadership, in this view, is a matter of providing interpretation. Leaders can give people a lens and a language for understanding their work and experiences in light of larger purposes. They can help shape the mental frameworks of others so that those people see themselves as making contributions to the mission and direction of their organization, working in community for a common purpose.  Here is an opportunity for the thoughtful introvert to make his or her mark.

In the corporate world over the past decades, leaders have produced greater organizational efficiencies by employing advanced analytics and defined metrics and systems. But most organizations that have successfully manipulated these resources are finding it difficult to extract even greater efficiencies from them over time. Many are turning to their human capital as the next source of growth.  Yet many businesses are realizing the difficulty of identifying and developing leaders, particularly those who can lead this kind of productivity growth.  For example, the 2008 IBM Leadership Survey found that over 75% of CEOs lamented their ability to identify and develop leaders to succeed them.

Law firms should take note. 

Leadership involves not just leveraging the collective knowledge and expertise of an organization. Leadership is also about cultivating and nurturing human capital, particularly in such a talent-dependent industry as ours.  Leaders who recognize the perennial needs of individuals to be appreciated, to be part of a community and to feel they are contributing to the greater good are more likely to be able to raise the productivity of their troops.

And introverts can do that.
 

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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.

 

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If you stay with it long enough, a practice that goes out of fashion will often come back around again.  Those of us of a certain age remember when the first year or more at a big law firm was spent "rotating" around departments to get a good feel for the full range of legal practice.  That quaint practice was drilled out of most firms with the arrival of big ticket associate salaries and the push for faster and higher realization of revenues on their time. 

Now we hear from across the pond that Linklaters is proposing countering  "damaging over-specialisation" by having junior associates spend time in different practice areas in their first few years, a practice that Allen & Overy is also considering and Slaughter and May has already adopted.

“There was an awareness that people are specialising too early and there’s a desire to see people get a more rounded experience in their early years,” a senior partner at Linklaters was quoted as saying. However, it was noted that the move "should not be seen as a reaction to the economic climate."

With due regard to that  Linklaters partner's opinion, whenever this "new" practice is discussed at the law firms we advise stateside, it is raised expressly in the context of the current economic climate--one of the reasons being to position associates to be able to move more quickly out of and into practice areas depending on the firm's needs.

Non-equity partnership tiers have been the fastest growing population segment of law firms during the past decade, but those partners are sometimes specialists in areas where firms can no longer reliably provide sufficient work.  And, like specialized associates, those non-equity partners are often difficult to re-deploy quickly to where the firm's work is.  Many firms are therefore considering limiting or eliminating entirely that tier, moving to an all-equity partnership like back in the old days. Addleshaw Goddard intends to put that reversion in place next year. And a similar noise is being made as DLA Piper reviews its entire firm structure, with unattributed partners saying that the firm could move toward a single tier of partners, eliminating both tiers of income partners in its current model.

The wheel goes round and round.

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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.

  

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Hiring the right people is the first and most important goal in recruitment.  And these days firms do not have the luxury of over-hiring and waiting a few years for the "keepers" to rise to the top. 

A speech at the International Bar Association conference in Madrid last month reiterated the importance of an often-neglected part of recruiting:  determining the personality and other personal attributes, such as emotional intelligence, communication skills, resilience and rainmaking ability, of potential hires to make sure they "fit" a firm as well as a firm's clients.  In anticipation of that presentation, Janet Moore said: "I have been thinking how (most) law firms do not fully assess lawyers before hiring them... What if, as part of the hiring decision, law firms objectively and thoroughly assessed their potential hires?" 

Or, we might add, if firms worry about scaring off recruits with such a sophisticated approach, what if firms used assessments as part of the orientation and integration process to better place new attorneys in practice groups and firm roles?  Or used assessments to help their lawyers build individual career development plans and to inform professional development programs?  Or used them to steer leadership development programs and succession plans?

There is a long list of assessments that have been successfully used for decades by corporations and consultants to the corporate world.  Some shed light on business development propensities, others highlight personality attributes that help position a person in his or her most productive role and others predict and shape delivery and management style.

At a time when law firms are turning more aggressively to business schools for management programs to help their lawyers become better businessmen, it should be pointed out that business schools fairly uniformly require that their graduates complete some sort of personal assessment and take a class on how those attributes influence their team participation and management style--and can help them be more effective.

But an important step is doing the upfront work of identifying what attributes a firm is looking for in hires and how the firm can support the development of those attributes.  “We want bright people, but we’re also looking for other qualities, like a sense of responsibility and a willingness to go the extra mile for clients,” as Cynthia Pladziewicz, Chief Development Officer at Dallas-based Thompson & Knight says.  “We need to understand who succeeds here..." and  “make sure we integrate our recruiting with our development process.”  

 

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One of the important implications of Muir's article "What the New Law Firm Looks Like: The Reinvention of a Reluctant Industry" is that going forward firms will require the close involvement of sophisticated management professionals who are not necessarily or even preferably lawyers to help design and manage change.  These critical players will not only assist in initially envisioning the goals of the firm and its related programs and in easing the various players toward them through the transition period, but will also remain important in ongoing firm management in order to make those initiatives fully operational and successful over the long term.

In the past many law firms have often taken a pass when it comes to building the depth and quality of their non-lawyer professional staff.  For the most part we aren't that focused on these "unseen" professionals--there are going to be complaints about them within the firm anyway and rarely does a client interact with them.  So the firm librarian could be a dud, and the head of recruitment simply cheerful. 

We seem to realize marketing and technology advisers (and at the bigger firms, the professional development directors) have some importance, but still we often opt for less sophisticated, less expensive personnel who act more as placeholders than change agents, undercutting their potential effectiveness from the start. We tend to hire them young and tell them what to do and even sometimes how to do it.  After all, lawyers are the ones who really head all of these areas: the non-legal staff are simply assistants and overhead to boot.

The problem is that lawyers are no longer the experts in all the areas that law firms need expertise in. 

For example, Muir notes that firms will develop "serious project management skills that focus on evaluating and reviewing client goals (both fee-related and outcome-related) and managing matters to reach them."  Such skills include the technological capacity and human expertise to analyze, bid on and track client matters, including producing interim progress analyses to manage staffing and expenses and keep the client up to date.  Lawyers working on those projects need to be spending their time doing what they do best--providing legal services, and should rely on non-legal professionals to fine tune the timing and extent of those services. 

Similarly, "staff managers" acting like purchasing managers are likely to be responsible for engaging and managing a complex and highly changeable array of lawyers and services for specific and often fixed-term projects.  They will need the technology and expertise to manage a large database of information on individual lawyers, temp providers and outsourcers, produce contracts, evaluate performance and follow up complaints and contract violations.

Making "frequent and accurate evaluations of lawyers and staff and effectively using targeted training" are not only complex processes in themselves requiring careful analysis but become critical to morale and retention as these evaluations and trainings impact compensation in the new merit and competency models (see, for example, "The Issues in Moving From Law Firm Lockstep to 'Levels' Compensation").  And those charged with determining compensation based on multiple indices and complex formulas applied across numerous parties similarly need to have reliably sophisticated expertise.  The mid-level partner who doesn't have a lot of client work these days isn't the best choice to run with these valuable, exacting tasks.

Finally, "building relationships, which is key to exerting leadership influence, will be more challenging," and firms are likely to require more leadership time from their leaders--whether firm-wide or practice group leaders--which implies more time diverted from practice to firm management and more reliance on professional assistance.  Work assignment evaluation and management, leadership development, diversity compliance, client succession planning--these tasks can be taken on or assisted by non-lawyer professionals with the appropriate skills.

Of course, these professionals mean a rise in overhead--whether you obtain your expertise by in-house personnel or from outside consultants, another reason profits are likely to be diluted going forward.

But we lawyers can't effectively do all these jobs.  We can't because we are not diverse enough in our approaches and talents (see "The Unique Psychological World of Lawyers").  We not only haven't been trained in the relevant areas--project management, talent  evaluation, competency testing--but we also aren't likely to be naturally inclined toward or good at the process, patience and attention to the types of details that are required. Or if per chance there are lawyers among us who are so inclined or talented, we are not likely to know who they are.

There is the problem of overcoming the legal ego--it's not important if we can't do it well, and conversely, if it's important, then we can do it--but don't let that attitude be what keeps your firm from moving ahead.  Good management these days lies in identifying and locating needed expertise, not in attempting to be it.

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Muir points out in her article What the New Law Firm Looks Like that building bigger firms does not necessarily produce better bottom lines.  Of course for many firms long-term client development or other factors beside profitability fuel growth.  And then there are some growing firms which in fact achieve greater profitability in spite of the odds.

K&L Gates is one of the firms that has managed to accomplish that.  The product of a 2007 merger of Kirkpatrick & Lockhart with Preston Gates & Ellis, and then mergers with Nicholson Graham of London, Washington's Hill Christopher and Boston's Warner & Stackpole, the firm has completed since the beginning of 2008 three additional mergers -- one with Texas-based Hughes & Luce, a second with Charlotte, N.C.-based Kennedy Covington Lobdell & Hickman and the third with Bell Boyd, which took effect March 1, 2009, bringing together a total of over 1,800 lawyers. Over the same period, the firm opened offices in Paris, Shanghai, Frankfurt and most recently Dubai, among others, and established a relationship with Taiwanese firm J&J Attorneys at Law, for a total of 33 offices.

This astounding growth trajectory is true to Chairman and Global Managing Partner Peter Kalis's express intention to "grow aggressively," taking advantage of the firm's lack of short-term and long-term debt. Not only has growth been achieved but in this case the approach has so far proved profitable--revenues for 2008 were up 27% over 2007, while profits per partner for that year rose almost 7%, with first half 2009 continuing to show significant increases, again meeting Kalis's stated goal of increased profitability every year. 

So if a firm like K&L Gates manages to do the difficult if not impossible by growing aggressively while increasing profits, what are the challenges?

Of course the firm has been through a few clouds, as there always are around silver linings.  No firm, regardless of its size, can escape them.  Microsoft Corp.'s list of preferred legal providers did not include Bill Gates's father's firm this year. While Microsoft GC Brad Smith had welcomed the original merger of the Gates firm and Kirkpatrick & Lockhart, former Microsoft GC William Neukom left K&L Gates last year, perhaps signaling something. Or perhaps it was simply time for a change.  The firm did not add another DuPont "Meeting the Challenge" Award this year to those accumulated over the past few years.  And K&L Gates has had its share of difficult client relations--MTV Networks noisily canned the firm as defense counsel a few months ago.

One insight into the challenges that the firm's success raises may be in a comment from K&L Gates' most senior trademark lawyer Mark Peroff, who left the firm last year for a smaller firm.  "In my experience at K&L Gates," he was quoted as saying in explanation of the move, "the focus was entirely on making money.  There was no glue among the partners."  (Peroff also pointed out that in a smaller firm he could significantly lower his billing rate.)

There might be some who would question the importance of glue, both as to whether it significantly colors one's experience at a firm and also whether it adds to the bottom line, a discussion we will take up in a later entry. But Peroff 's comments raise the conundrum that many growing firms in fact face, and often without the benefit of rising profitability. 

Every year the ranks of new hires, lateral hires, and various contract, counsel, income, equity and other lawyers shift, while there is simultaneous shifting among personnel at various offices. How to add so many bodies to various locations and still keep a sense of commonality if not collegiality among the players?  

And similarly, if a firm hopes to improve profitabiliy, can it push bottom-line results persistently, making each person accountable for their own production, and still maintain strong relationships?

In other words, do our goals and policies bind us or divide us?

Sometimes glue is simply a commonality that keeps all the various firm systems running in decent working order.  Sometimes glue produces real revenue through cross selling and enhanced relationship building.  Sometimes glue is just that ineffable bond that keeps people from leaving.

It may sound pretty fuzzy, but it's important to consider the glue in your firm.

 

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Yes, Virginia, there is a future for law firms, but it is a strikingly different one from the law firm of the past. 

Not Your Grandfather's Firm

What would have been bombshells ten years ago, and maybe even five years ago, continue to drop from the legal firmament: Double digit reductions in revenues and profits; big shops--Bingham McCutchen, Howrey, Orrick, DLA Piper, Morgan Lewis--shelve or reduce their reliance on lock-step promotions; many firms cut back or eliminate summer programs; salaries are frozen or reduced; behavioral interviewing becomes the newest buzzword in recruitment at Vinson & Elkins and elsewhere; old-line English firms Slaughters, Linklaters and Clifford Chance all acknowledge engaging outsourcers for their clients' low-level legal work, in some cases after years of deriding the practice; and English firms Addleshaws and Linklaters take steps to convert to all equity partnerships, while a number of American firms secretly consider it.

What the New Law Firm Looks Like

Muir's article What the New Law Firm Looks Like: the Necessary Reinvention of a Reluctant Industry reviews some of the areas where changes are sure to appear, and are often already in motion: the rise of merit compensation, multisourcing, non-lawyer stakeholders and the demands made on leadership generally and practice group management specifically; the decline of mergers, hourly billings, big real estate holdings, compensation generally, and fixed levels of staffing. 

In other words, transition is the keyword.  Your competitors are leaving no stone unturned in their search for an edge in a difficult market--neither should you. 

Let us know what steps your firm or your outside counsel are taking to better position themselves for the road ahead.  We will compile these results and pass on the best to you.

 

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If you haven't already seen this interview of Professor Richard Susskind, the author of The End of Lawyers?, by Barclay Bank's General Counsel Mark Harding, you should do so.  Harding puts Susskind through his paces on what the practice of law is likely to look like over the next 20 years.  Known for his expertise in applying technology advances to the legal industry, Susskind has the benefit of seeing the industry with an outsider's eye--one that both indicts and empowers.

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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.

 

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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.

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In David Maister's article "Are Law Firms Manageable?" on the seemingly intractable challenges to law firm management, he points out only half facetiously that firms may get away with perpetuating these inefficiencies because there is no competitive fallout:  "The greatest advantage that lawyers have is that they compete only with other lawyers."  

 

The time may be fast arriving when that is no longer true.

 

Australia's Slater & Gordon is the world's first publicly traded law firm.  S&G went public in May 2007, the first IPO for a law firm after new legislation went into effect Down Under permitting investment by non-lawyers.  Last February, the firm reported net profit of $8.46 million for the six months ending Dec. 31, 2008, a 22.4% increase over $6.9 million the prior year.  S&G's revenue increased 35% to $50.5 million over the same time frame. The firm expects earnings to rise into the second half of 2009.

 

At the time of its listing, the Melbourne-based plaintiffs firm, known for its contingency fee personal injury work and securities class actions, had a market capitalization of $89.7 million and gave stakes worth between $2 million and $8.5 million to seven equity partners.

  

Meanwhile, on the other side of the Pond, Lyceum Capital became the first investment house to openly target legal services, positioning itself ahead of a law similar to the one in Australia--the 2007 Legal Services Act--which comes into full force in the UK in 2011.  This act also authorizes the investment in and management of law firms by non-lawyers, and could produce what some have termed the most liberal legal market in the world. 

 

Lyceum Capital has raised over $500 million and intends to take minority and controlling stakes primarily in midtier midmarket firms with revenues of 20 million pounds plus who are doing bulk work and who would benefit from outside investment for purposes of carrying out a merger, developing a new practice area, and funding expanded IT systems. 

 

According to Lyceum Capital’s Managing Partner Jeremy Hand: "Law firms are businesses. We are not pretending we are lawyers but we can help businesses develop -- whether through giving advice, overhauling IT systems or allowing them to grow with new hires."

 

He added that lawyers "think they are in a competitive industry but they do not appreciate how different it is in other sectors. This will change the entire business landscape. There is no doubt in my mind there will be winners and losers in this situation: Firms cannot be complacent. There is no guaranteeing firms at the top of their game now will be there in a few years' time."

 

To some, it is clear that the outside investor revolution is not coming to the U.S.--"It's a perpetual conflict, at least potentially, with non- lawyers controlling a law firm,'' says Steven Krane, the chair of the American Bar Association's ethics committee and a partner at New York's Proskauer Rose. "There's very little interest in changing the rules.''  That said, in response to another change in the market--the avalanche of lateral hiring--the ABA has not balked at changing the ethics, and specifically the conflicts, rules to clear the way for laterals to move in and out more easily.

 

Law firms, which could use capital to expand and fund cases, are grappling with the arrival of public offerings in the same way as did the old guard investment banks.  Another industry once dominated by private partnerships, it began the transition to public ownership 30 years ago. Financial pressures on other banks mounted after Merrill Lynch & Co. listed its shares in 1971 in what became increasingly obvious as a competitive advantage, culminating in Goldman Sachs Group Inc. becoming the last major investment bank to make the change in 1999.

 

"If the English firms can sell stakes in their law firms publicly, that will then give them an advantage,'' said Ralph Baxter, the chief executive officer of the 924-attorney San Francisco-based firm Orrick, Herrington & Sutcliffe.  And off to the races we go.

 

For purposes of comparison at the time of S&G's listing, an American Lawyer article attempted to attach capitalization values to several Wall Street law firms, grouping them into "blue chips"--Cravath, Swaine & Moore, and Wachtell, Lipton, Rosen & Katz,  "multinationals"--Skadden, Arps, Slate, Meagher & Flom and Latham & Watkins, "growth stocks"--Dechert and DLA Piper, and "small caps"--Pepper Hamilton and Womble Carlyle, and arriving at equity market capitalizations of from $552 million (Womble Carlyle) to $2.9 billion (Skadden, Arps). 

 

Those numbers look mighty healthy to the partners who have seen not only a slowing in profit growth but even decreases in profits over this past year.  With no quick rebound in sight, there will be increasing pressure from partners of U.S. law firms on management to explore, and if required, work to legitimize the option of obtaining public investors. 

 

And if non-lawyers are not yet investing here in the U.S. in law firms, they are already investing in litigation. 

 

A $100 Million Wager 

 

Juridica is a publicly traded UK fund that invests in plaintiffs commercial litigation in the United States. This spring the company announced that it had completed a second round of financing, raising 33.2 million pounds (about $47 million) on London's secondary exchange, the Alternative Investment Market, after an IPO in December 2007 of 74 million pounds, making a total of over $100 million available for investment.

Juridica is not the only hedge fund betting on litigation. There are several such investors in U.K. litigation, including a fund under the auspices of Allianz, the insurance company. In the U.S., according to Juridica CEO Richard Fields, Credit Suisse is a major player in the commercial litigation funding market as well.

Evidently Juridica has already taken an equity interest in 17 large commercial cases, most of them in the U.S.  One case and one law firm loan paid off by the end of the year, so Juridica offered investors a 4.6% dividend.

Fields says general counsel seeking alternative billing arrangements with law firms have

created opportunities for Juridica. "Having an outside investor that takes an equity piece is not that big a leap," he said. "In a way, our timing was fortunate. The recession created more interest in spreading risk."

 

Who Needs the Money Anyway?

 

Lyceum Capital is only one of three private equity funds that have sprung up in anticipation of the implementation of the Legal Services Act of 2007 and there are several litigation investment firms already.
 

With the tightening of credit, says Simon Johnston, senior partner of the 550-lawyer London firm Nabarro, "people will be thinking about their options." 

 

The major Magic Circle firms have said they are not interested because they don't need the money.  "Why would we need the money?" Allen & Overy managing partner Wim Dejonghe asked.

 

Why indeed?

 

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What are the critical personal attributes for achieving success?  Shalom Saar, with an M. A. and Ph.D. in Organizational Behavior and Administration from Harvard University, has the answer.  Saar is currently teaching leadership and management at MIT and serves as a visiting professor at the China Europe International Business School.  His clients range from mega-corporations to non-profit organizations around the world, and he is a frequent speaker.

Saar points out that there is no particular personality type that is marked to succeed, but that there are seven personal attributes correlated with success--all starting with "C".  Here is his list:

• Conviction--also known as persistence in spite of setbacks, which many consider to be the most important indicator of success
• Comprehension--accurate awareness of oneself and the business environment
• Competency--delivering promised services and products
• Communication--effectively connecting with employees, clients and suppliers
• Compassion--extending kind understanding to others
• Character--taking a stand on principle
• Courage--bravery in thought and action

What can managers in the legal workplace take from this list?  While many legal managers can boast conviction and competency, in our experience the remainder of these attributes are less obviously strengths in legal leadership.  Particular challenges are comprehending the particularities of lawyers and the differences between them and their clients, and communicating effectively.  Compassion is not a hallmark attribute of lawyers, although it is one that lured many young people into law school.  Having the character and courage to not follow the legal pack can also be difficult for lawyers--we tend to move in herds.

Lawyers have arrived at a critical juncture where getting the right answer is no longer, if it ever was, the ticket to having a successful law practice. We, like other industries, must cultivate in our firm members the seven Cs of success. Devising a systemic plan for developing these important traits in your talent should be a top priority in these turbulent times. 

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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.

 

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Not only do lawyers score very differently from the rest of the population on the Myers-Briggs Type Indicator (MBTI) (see Muir's article "The Unique Psychological World of Lawyers"), but it appears that a lawyer was responsible for the development of the assessment in the first place. 

According to the Center for Applications of Psychological Types, Inc.  (CAPT),  the organization Isabel Briggs Myers established to research and maintain the assessment, the MBTI was developed by Katharine Cook Briggs and her daughter Isabel in the middle of the 20th century because of questions they had about Isabel's husband, who was a lawyer.

Katharine’s father (Isabel's grandfather) was on the faculty of Michigan Agricultural College (now Michigan State University) and her husband (Isabel's father) was a research physicist who became Director of the Bureau of Standards in Washington. Isabel had a bachelor’s degree in political science from Swarthmore College, where she met and later married Clarence Myers, who became a lawyer.

Katharine first became interested in types because her son-in-law Clarence was so different from the rest of the family, CAPT reports. To try to help them both better understand Clarence, Katharine introduced Isabel to Jung’s book, Psychological Types, which was published in1921.

As they worked on the indicator during World War II, Myers' and Briggs' goal became “to show how our differences... can be valuable rather than divisive, and can be used constructively . . . to promote personal development . . . manage conflict and . . . increase human understanding worldwide,” and specifically to help women who were entering the industrial workforce for the first time identify the sort of war-time jobs where they would be "most comfortable and effective."

The Myers' marriage was by all reports happy and long-lived, so Isabel's inquiry into types may have proved productive not only for the greater world--where over 50 million MBTI assessments have been given, making it the oldest and most widely used personal style instrument. 

 

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The Grant Study is an extraordinary longitudinal study undertaken in the late 1930s to shed light on "the urgent question of how to live well."  As participants, a group of 268 (male) Harvard College sophomores, including John F. Kennedy and Ben Bradlee, were chosen for showing particular promise.

An article interestingly entitled "What Makes Us Happy?" in the June 2009 issue of the Atlantic explores what we might learn from 72 years of following that gifted group.

The biggest surprise may be how unreliable those evaluations at a formative age turned out to be for purposes of predicting future success and happiness. Or perhaps, that in spite of those evaluations, how inevitable stumbling is.

As David Brooks, in his May 11, 2009 editorial "They Had It Made" in The New York Times relates: "Their lives played out in ways that would defy any imagination save Dostoevsky's.  A third of the men would suffer at least one bout of mental illness.  Alcoholism would be a running plague.  The most mundane personalities often produced the most solid success."

Almost as interesting as the study is the man who has been overseeing it for more than four decades, George Vaillant.  Vaillant doesn't hesitate to arrive at a familiar yet profound conclusion:  relationships are the key to happiness. 

Yet the difficulty of putting that dictum into practice is evident in Vaillant's own life.  At work, he has proved to be a valued colleague and mentor.  On the personal front, things are much more challenging.  His father committed suicide, which his mother never acknowledged, his three marriages all ended in divorce and his children describe their home as being a "civil war" and their father as having a problem with intimacy.

There are some other interesting takeaways from the study, which Brooks points out.  All the men tended to cope better as they aged.  Those who suffered from depression by age 50 were much more likely to die by age 63.  Those with close sibling relationships proved much healthier in old age than those without them.

What is not clear is why these particular young men were chosen to participate in the study in the first place.  All we really know about them is that their admission to Harvard College at that time meant they were at least reasonably bright and probably the sons of influential and wealthy families. And that someone at  Harvard College had a high opinion of them. 

Of course, in the 1930s they didn't have access to the bundle of assessments available to us in the 21st century.  The "science" of head size and phrenology (the study of bumps on the head) had had its heyday during the prior century. The concept of an assessable intelligence quotient had only recently been introduced; the Wechsler Intelligence Scale would appear a few years later.  

What did the Grant Study originators think success in "living well" meant?  And what did they think it took to accomplish that?   In other words, what specific attributes were they looking for?  Might the many different paths that the participants eventually took reflect a lack of a clear vision on the part of the originators as to their concept either of success or its antecedents?

Perhaps Brooks' note that "the most mundane personalities often produced the most solid success"  informed another editorial, "In Praise of Dullness," that appeared a week later.  There he cited a recent study that seems to point to "relentless and somewhat mind-numbing commitment to incremental efficiency gains" as the critical attribute of successful CEOs.  Even if that correlation is in fact relevant (see the comments on Richard Edelman's "Dull Advice," which question its relevance as a broad-based indicator), it seems unlikely that it was young men with that attribute whom the Grant Study originators sought to identify.

Knowing what you are looking for in any selection process is critical.  Organizations around the world use sophisticated assessments to choose candidates for employment and advancement based on the competencies, attributes and traits that they have found predict success in their organizations.

Yet we recruiters of legal talent often don't know what we are looking for.  At a roundtable two weeks ago on legal hiring, David Van Zandt, Dean of Northwestern University School of Law, entreated law firms to develop a better model for selecting their summer associates.  "I've long advocated that firms really need to look at their data... and identify the characteristics that they're looking for in their candidates," Van Zandt said. Now, "you just go out and throw a wide net and pull people in." 

In fact, as we've suggested (see our entry "The Outliers of Law--Embracing Heresy "), the single attribute--high class standing--that firms do look for may be the one that could well be jettisoned--or at least modified--with little impact on the quality of legal services.

What the Grant Study does show is that predicting the future course of even a bright young person with a shiny veneer of promise can be difficult.  And that regardless of their credentials or intelligence, many are likely to fall to the various vicissitudes of man--mental illness, addiction, relationship breakdown. 

So then, what can one do to be happy?

Valiant knows: "Happiness is love, full stop." 

Now it's just a matter of implementation.

 

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In the current stressful marketplace, the rate of lawyers' incidence of impairment has been ratcheting up from high (see, for example, our September 5, 2008 entry "The Depression Demon Coming Out of the Legal Closet") to even higher.  See "Employment Woes Fuel Uptick in Lawyer Depression."  Firms suffer losses in productivity, morale and recruitment because of impaired lawyers, and also risk client desertions, losses to their reputations and malpractice liability. 

Firms can take several approaches to both assist their lawyers and protect their bottom line.  Thomas & Knight attorney Peter Riley, as managing partner, instituted an extensive program to address lawyer stress caused from depression, substance abuse, anxiety, etc. in order to provide help fast, without worrying about insurance authorization or long waits for appointments, and with complete confidentiality.  Even with the costs of the program, Riley finds it cost-effective to the firm.  "When a lawyer or lawyer's child or spouse is in crisis, that is going to be the focus of their attention," he says.  "If we can provide assistance for them quickly, we have not only done the right thing for our lawyers, we have done the most economic thing.  It's the perfect intersection of what is right and what is profitable."

Let us draw from our extensive experience in this area to help you spot and support critical talent confronting personal distress.  We can assist on an individual-by-individual basis or by helping you set up a confidential, effective program attuned to your goals and budget.

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Malcolm Gladwell's latest book Outliers, the Story of Success argues that what accounts for success is often not what we expect.  High IQs or a prodigious ability in computers or exceptional musical talent is not sufficient to explain Nobel Prize winners and Bill Gates and the Beatles.  While a certain level of intelligence, skill or talent may be a necessary ingredient for success, it is not sufficient.  Luck, opportunity, hard work, support and training all play important roles.  Raw ability--intelligence or talent--is only a threshold.  When faced with a class of clever boys, as Gladwell repeatedly points out, knowing one boy's IQ is of little help in determining his standing among the group.  Extensive research validating that attitude has led psychologist Barry Schwartz (full disclosure: he was my psych professor at Swarthmore) to suggest that elite schools could give up their complex admissions process and simply hold a lottery for everyone above a certain threshold of eligibility--the "good enough candidates"--without producing a loss in their graduates' accomplishments.

In April 2008 the Indiana University School of Law-Bloomington issued a research paper entitled "Are We Selling Results or Resumes?: The Underexplored Linkage Between Human Resource Strategies and Firm-Specific Capital" by William D. Henderson, a respected authority on lawyers and law firm management who may be in need of better title-writing skills.

Henderson describes the "Cravath system" that Cravath, Swaine & Moore developed in the early 20th century in order to distinguish its legal services:  "Hire the best graduates from the best law schools; provide them with the best training, and at the end of a six-to-ten-year apprenticeship, promote the best associates to partner."  Ironically, instead of distinguishing Cravath's brand, in fairly short order that system became standard industry practice, hence the run-up in associate salaries when increasing demand over the last 20 years from all those wannabe premier law firms outstripped the stagnant supply of premier graduates.

Included in the "peculiar market dynamics" that Henderson notes as a result of the widespread adoption of the Cravath model is 1) the resistance of clients to having those escalating salary costs passed on to them, resulting in their request that junior associates not work on their matters, and 2) the inability of a large proportion of firms who use this model to simply absorb pay raises that can't be passed on to clients. 

So-- Voila, the current standoff between valued-centered clients.and expense-laden firms.

What does Outliers and that very long, obscurely-titled paper have to do with one another?  Henderson makes the point that law firms able to deliver high quality legal services at a fixed cost are in a position to reap enormous financial rewards.  How to do that?  He cites empirical evidence that "within a certain range, differences in cognitive ability, such as I.Q., are uncorrelated with contributions to organizational productivity, and that among knowledge workers, organizational productivity is primarily a function of work strategies that are teachable and trainable."  Those conclusions were drawn after evaluating engineers and other high-level service providers.

Henderson points out that young lawyers with slightly less elite credentials are willing to work very hard for less than elite salaries, particularly if they are being trained.  These lawyers provide firms with the opportunity through knowledge management, business processes, lawyer training and teamwork to develop "firm-specific capital.--i.e., an asset whose value is unique to the firm because it cannot be removed by departing partners nor easily duplicated by competitors."   That is, by engaging "good enough" lawyers and aggressively managing them using the tools that other industries employ to provide high-quality, fixed-price services, a firm can make a name for itself and profitably escape the Cravath model.  Both Gladwell and Henderson point to the enormous financial success of Wachtell Lipton and Skadden Arps in the 70s, firms started by unmarketable lawyers who addressed underserved niches. 

Howrey has just announced that starting this fall it will be paying first and second year associates reduced salaries in connection with a program of limited billing requirements and supercharged career development.  During those years, associates will have intensive training opportunities and be seconded to clients, judges and not-for-profit organizations in order to ramp up their skills.  Managing Partner Robert Ruyak "said the new approach is not a way to save the firm money. In fact, he said, it's going to cost between $3 million and $4 million to implement once training costs and the unbilled hours the associates work are thrown in."

"The way we see it though is that it's going to cost more in the beginning because we're creating something from scratch, but once we get going and we start having a group of young, experienced lawyers coming out ready to handle client matters, we're going to turn a profit much more quickly than we would under the old model."

Howrey and the few other firms who have introduced a version of this approach have not said that part of their plan is to hire "good enough" lawyers, instead of the most highly-credentialed, but the effect remains similar--they are paying less for their incoming talent on the theory that those young lawyers will be bright enough to learn the types of skills and service that the firms intend to pin their reputations on.

What's the biggest hurdle here?  The hurdle that may keep some firms hesitating is the feared implication that by not paying the top entry salaries, which for decades has signaled the pecking order of firms in recruitment, firms adopting this kind of approach do not have "the best" lawyers. 

Perhaps now is the time to embrace the heresy that having "good enough" lawyers is in fact good enough to be successful.

 

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Ronda Muir will be a featured panelist at the annual general meeting of the Attorneys' Liability Assurance Society (ALAS) in Quebec City, Quebec to be held June 25-26.   ALAS is the premier provider of professional liability insurance for large law firms in the United States, currently insuring 237 firms.  Muir will discuss lawyer personality, firm culture and other aspects that impact risk particularly in the context of mergers and lateral hires. Over 250 loss management and managing partners are expected to attend. 

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Muir's September 5, 2008 entry on "The Depression Demon Coming Out of the Legal Closet" has been published in the Spring2009 newsletter of Virginia's Lawyers Helping Lawyers, a 20-year old non-stock corporation endorsed by the Virginia State Bar, The Virginia Bar Association, the Virginia Trial Lawyers Association and the Virginia Board of Bar Examiners.

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Muir led a two and a half day retreat at the end of May for UNICEF's Macedonia office to help improve teamwork, communication and conflict resolution. Through the use of individual and team MBTI reports and emotional intelligence assessments, Muir and the team identified personal and office strengths and challenges and determined strategies for improved communication and conflict management in order to better serve the country's children.

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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.

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How far does your influence reach?  The February 2009 Harvard Business Review reported research by Nicholas Christakis and James Fowler indicating that while all kinds of behavior and attitudes spread through social engagement, with each additional degree of separation a person's influence progressively diminishes.  Those beyond three degrees of separation no longer exert influence. For example, a person is 14% likelier to be happy if his or her friends are happy, 10% likelier if the friends' friends are happy, and 5% likelier if the friends of those friends' friends are happy. By the fourth degree of separation, there is no longer any increase. 

What this means in the organizational setting is that firm-wide buy-in--necessary for effectuating change, sustaining a culture and steering a strategic path, among other things--requires that the message permeate the organization to a greater extent than we might have earlier thought necessary.  

In smaller firms, top management has to personally and effectively persuade at least one-fourth of the firm, on the assumption that the personal involvement of that quarter with those around them will effectively influence the others.  In the biggest firms, management must carefully calculate where the spheres of influence are and reach into those various groups to recruit ambassadors who will then bring the message to those within each circle, so as to eventually impact the whole firm. 

Particularly given the recent growth in firm size and increase in tiers, relying on the simple top-down approach means that the management committee may not reach far enough across or down to effectively enlist everyone.  The result can be alienated groups--young associates, non-equity partners, even senior partners--who haven't gotten the word and make firm goals doubly hard, if not impossible, to reach.

This research, like others, emphasizes the importance of personal relationships in cementing the cohesion of a firm, regardless of its strategic direction.  While not all firms can afford a managing partner who devotes full-time to firm management and individual relationships, those firms who can't should carefully ascertain that managers and their surrogates are engaging all components of  the firm.

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Collaboration in the form of teamwork may be the 21st Century's technology, in that it promises strides in greater productivity--but only when done well.  It can also veer from chaos to constipation. David Maister's famous article Are Law Firms Manageable? questions whether lawyers can make the transition from "a managerial approach based on partner autonomy to new approaches that can create a well-coordinated set of team players." Well, can we?

After seeing double digit increases in firms that have implemented team systems--management, marketing,  industry and client teams--and an increase in work satisfaction among team members, an initial question many interested law firms have is how to go about setting up and managing teams.  Luckily, research provides some guidance that can help firms successfully achieve productive teamwork.  The following is a summary of Muir's presentation on effective teamwork at Swarthmore College's 2009 Lax Conference.

In 1965 Bruce Tuckman, an organizational psychologist, established modern team theory, refined most recently by Dr. Susan Wheelan, professor of Psychological Studies and Faculty Director of the Training and Development Center at Temple University.

The stages of teamwork, according to these models, are 1) forming, 2) storming, 3) norming, and 4) performing.  The forming stage, even among lawyers, can be marked by tentative and polite accommodation.  Unsure of their roles and the leader's competence, team participants need the leader to be clear, directive and highly structured during this first stage. This is not the time for a consensual  "Well, what do you think we should do?" approach.  Also, if you have the luxury of choosing team members, choosing those who are different from each other in their attitudes and skills and who are able to articulate and, when appropriate, stick by their opinions produces the best mix for a team. See our entry Promoting an Effective Board or Management Group for additional discussion of what attributes to look for in team members and how to promote their best contribution.

During the second, storming stage, the politeness wears thin and team members, particularly lawyers, will test the leader and stake out their positions with each other to determine what their authority and parameters will be.  Conflict is often a result.  This is a positive development.  Handled well, the team will learn from experience that it is safe to engage in conflict, and that issues can be settled without lasting acrimony or division, even if it requires agreeing to disagree.  This is the basis on which trust and respect is established.  Leaders are often criticized during this stage (and sometimes asked to step down) as much because of their role as because of their personal attributes or performance.  Leaders who can keep from reacting defensively will avoid exacerbating and prolonging this stage, which, being awkward and uncomfortable, helps propel the group to resolve their differences and move forward into the next stage.  Leaders should emphasize during this stage the importance of keeping debate, which is useful, focused on the issues and not the personalities involved.

During the third, norming stage, based on the higher level of trust achieved during the 2nd stage, the group's goals are revised and a division of labor, with clear roles, is determined. The problem in law firms is that often lawyers don't make it out of stage 2.  Tenacious about protecting their authority and unwilling to trust those in a leadership role or those to whom work must be delegated, these lawyers can keep the team locked in unnecessary meetings and conflict, which may feel to them more like sport than discomfort.  Yet it is only in stage 3 that delegation becomes effective and the individuals are freed up to do their part of the team's work.

Stage 4 is performing, which is the highly productive stage that teams are made for.  At this point, if members are added or removed, or the goals or delegation changes significantly, the team may regress back to an earlier stage and have to work its way through the process again.

Goals that are most amenable to team accomplishment are ones that require collective action, i.e. those which no one person could accomplish on his/her own, and that are meaningful, even inspiring.  The most effective teams have an emotional commitment to the goal, so framing goals as being in the individual team members' interests is vital. 

Team goals should be specific, measurable and attainable, with a real deadline that allows the team's work to culminate in a completed project.  Ongoing timeframes make it difficult to maintain team motivation and momentum.

Ideally, team members spend about 75% of the team time on accomplishing their tasks and 25% on participating in the team process, i.e. attending status meetings, maintaining group relations and performing housekeeping tasks. Procedure can be important.  For example, lawyers are largely introverts who need time to formulate their opinions, so distributing an agenda in advance of a meeting and not requiring decisions to be made at the meeting allows them to both prepare for discussion and come to a reasoned conclusion afterward.

OK everyone, team up!

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In the final tranche of a triad of bad news over the last few weeks, two recent reports--one about associates and another about partners--point out how, despite the current abysmal employment market, there are still lawyers of various stripes who, given the chance, would choose to jump overboard rather than hang on to their position.

In a recent New York Times article, it was reported that Skadden Arps had offered all of its 1300 associates worldwide the option of taking a year off for one-third pay, with no pro-bono obligation.  One hundred twenty-five associates opted in, a number that a partner was quoted as describing as "in excess of our expectations."

The Lawyer reported April 14 that CMS Cameron McKenna, a large English firm, in a makeover termed a "Magic Roundabout" because of its spiral design [the English are into monikers: Linklaters calls its remake "New World" and Clifford Chance has settled on the term "size and shape review"], offered all of its 160+ equity partners the opportunity to move to non-equity status.  Sixteen partners stepped forward, more than managing partner Duncan Weston said he had expected.

There is no denying that much is changing in the structuring of firms on both sides of the pond, and these two firms are among those riding that wave.  The interesting note in both of these reports is that management remains surprised at the number of lawyers who, in spite of perilous times, would rather step away or down than stay at the helm.  Unfortunately, it speaks to the still prevalent but now less obvious dissatisfaction that was manifest in the massive attrition rates of only 18 months ago.

When things get back to normal (yeah, right) and probably even before then, firms still have to tackle the issue of how to attract and keep the loyalty of their talent--since that is what in the end makes for a successful law firm.  In spite of, and perhaps also particularly in the midst of, the rush to distribute pink-slips, let's not let that particularly item fall off our "to-do" list.

 

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A well-known investment banker confided recently that lawyers are partly to blame for the financial meltdown.  Why, apart from wanting to deflect the responsibility to someone other than bankers? 

The reasoning was that, particularly with the advent of Sarbanes-Oxley, lawyers have become such an integral part of the business process that their bias toward risk-aversion has seeped into the bones of corporate decision-making, making those decisions technically compliant but shortsighted from a policy and business standpoint.  Life without lawyers, or at least life with fewer lawyers, according to this highly-respected viewpoint, would improve business and the economy.

Covington & Burling partner Philip Howard arrives at a similar conclusion for somewhat different reasons.  He contends in his new book "Life Without Lawyers" that a fear of litigation has stricken many of America's industries, including both health care and education, paralyzing doctors and teachers, among others. "It's as if everyone has a little lawyer on their shoulder whispering in their ear all day long," he says. Howard argues that the economic crisis presents a needed opportunity to overhaul the legal system. With an activist president and a Congress controlled by Democrats, he sees major structural changes on the horizon.

"An essential component to making anything work that's broken is rebuilding the legal infrastructure," Howard says. It's harder to change the rules in times of prosperity, he says, but the challenging times ahead could initiate just such a reset.

A recent series of front-page New York Times articles reports that worker-compensation programs, designed to fairly and efficiently compensate workers for workplace injuries, is neither: bureaucratic gridlock and expense have resulted in a high-cost system for employers that is slow and inefficient in compensating deserving employees.  Who is to blame for these problems?  Lawyers.  Both those working inside these programs and those on the outside who made a "fair and efficient" alternate system necessary in the first place.

Finally, if you are not already doubled over from guilt, a Talk of the Town entry by Jane Mayer in the April 13, 2009 issue of The New Yorker recounts the research of English barrister Philippe Sands into the activities of the six Bush Administration officials, including William J. Haynes II, former Pentagon general counsel, who are being sued this week in Spain for the torture of Spanish citizens at Abu Ghraib. Sands' conclusion: "I've got a particular bugbear about lawyers.  If not for lawyers, none of these abuses would have ever occurred."

So there you have it.  Not only are our finances in disarray but our reputations and future prospects are sinking faster than a rock.  

There is no doubt that data shows that lawyers are more risk-averse, analytical, pessimistic, short-sighted and zero-sum out-to-win-oriented than their business contemporaries/clients.  Those same attributes often are what makes them good lawyers--able to see and remedy highly technical compliance and other problems that others cannot and win verdicts for their clients in a zero-sum justice system.  But, as with all good things, there are also downsides.

One challenge that lawyers are going to have in the new age dawning is to refashion in a major way at least the perception and probably also the reality of their impact on business and the economy.  The (very) old perception of lawyers as trusted advisors has given way to something closer to that of self-interested leeches who manage to rain on everyone's parade while siphoning off a percentage of GNP. 

As always, it is the balance that is key.  Lawyers can genuinely assert expertise in a number of areas that business people need and lack.  And lawyers should be compensated for that expertise.  And certainly lawyers are obligated to take stands to protect their clients and to avoid allegations against themselves of malpractice or furthering crime.  However, maintaining respect for the business process, even when it differs from how lawyers would do it, structuring your practice (and your fees) so that reaching the goals the client sets is the driving force, remaining cognizant of the lawyer's role of delivering services rather than achieving dominance-- these are changes of attitudes easier advocated than done. 

How to accomplish those changes is not found in any class any of us took in law school. A careful look at each firm's practice, its values and its strategic plan--and how those influence client service and associate and leadership development on the ground, rather than just in classrooms--is a critical first step to finding the appropriate balance.

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An article by psychologist Amy J.C.Cuddy in the February 2009 issue of the Harvard Business Review reports that we make fast assessments of people on two bases:  their intentions and their competence.  And more importantly, we assume one is related to the other.  This response is evolutionarily linked, she argues, to the advantage of quickly determining whether an unknown person 1) is friendly or hostile and 2) can follow through on their threats or promises. 

Unfortunately our assessments are often marred by biases that produce faulty judgments.  For example, we have a bias towards the elderly as being incompetent but non-threatening.

In the business world jungle, these instant assessments can carry long-term consequences, particularly if they are inaccurate because of poor perception skills (a common problem area for lawyers) or individual biases.  Inaccurate assessments can lead managers to trust untrustworthy associates or undervalue potentially important people.  They can also undermine efforts to build effective teams and retain valuable employees. 

Which One Are You?

For our work with lawyers, the more important finding of the research is that people see "warmth" and "competence" as inversely related:  a surfeit of one ("She's SO nice") is believed to imply a deficit in the other ("She probably can't stand up to a board").  For example, employees who are  consistently perceived as "warmer" are also viewed as less competent, with the practical result that employees who are mothers are often demonstrably underpaid and under-promoted.

While lawyers as a group are not usually at risk for being rated high on the warmth scale, leaders who know the importance of interpersonal relationships, and particularly women, often struggle with portraying to clients and colleagues the "right mix" of warmth and competence, fearing, just as the research tends to show, that too much of the former undercuts the perception of the latter. 

There is some trepidation in telling lawyers not to be too warm--certainly there are those who would argue there is little risk there.  Yet, particularly at a time when, rightfully, the legal world is exhorted to value and praise and build relationships, knowing how to do that practically without impairing the legal product produced, either in actuality or in the perception, is important.

Our advice has long been to bifurcate these two parts of leadership:  warmth is important and should be directed toward individuals, while critical analysis should be directed toward issues, not people.  

Whether with clients or colleagues, inquire about the kids, rib them about their  diet and praise them for their recent efforts, but when you review the business product, do not stint on hard analysis.  In both conflict resolution and decision-making research, similar findings make it clear that too pervasive an effort to build cohesion can overwhelm the validity and productivity of the underlying endeavor. The hard but important work of critical give-and-take can be mortally blunted by attempts to be "nice."

In order to improve our judgments and others' perceptions of us, Cuddy suggests that we also spend time working to reeducate ourselves and our employees away from the savannah influence:  don't be too quick to make judgments in these two areas, and do not assume that kindness and competence are mutually exclusive.

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In another blow to our already wilting sense of competence, the UK reports that according to research from the Centre for Market and Public Organisation, lawyers surveyed there who were born in 1970 (now climbing the legal ranks) have lower IQs than lawyers assessed in 1958 (and now either in very senior management or already out the door). Lawyers in the older group scored 11% better than the average, while the younger group were just 8% more intelligent.

The comparison to the average fell for most other vocations as well, with an average drop of 1%. Doctors, teachers, bankers and stock brokers all moved closer to average intelligence, while artists, engineers, scientists and journalists became more intelligent compared to average IQ scores, the research found. 

One pauses over the long-term evolutionary implications.

Than again, surely there's a way to view this trend chauvinistically.  These results are only for the UK, right?  Without any official comparable data in the US, we can comfortably surmise that we in the US retain our IQ lead over the masses.  On the other hand, with all the cross-Atlantic trafficking in lawyers that has gone on lately, the Brits might argue that this is just another example of the net brain drain of allowing Yanks to work there.

In any event, we hear the murmur of senior lawyers everywhere saying "I told you so."

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On Thursday, March 26, at 2:00 pm EST, Ronda Muir will lead an audio conference sponsored by the Center for Competitive Management entitled "Turning Lawyers Into Leaders: How to Survive the Economic Slide."  The discussion will cover who leaders are, what skills and attributes they should have in this economic climate and how to develop them.  For more information and to register. 

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In a review of law school news, applications are holding steady but expected to go up, tuition is up, letter grades are being changed to pass/fail, big law firms continued through 2008 to hire apace, law schools are having it out with the ABA over accreditation, and then there is the case of the graduate who burned his Harvard Law School diploma.

Applications.  Although a few law schools, including Duke, surging 4%, and Penn, rising 6%, and the D.C. area schools mentioned below, have seen increases in the number of applications, according to communications director Wendy Margolis of the Law School Admission Council, law school applications nationally have risen by less than 1% from last year, despite the dismal state of the economy. That compares to a 17.6% increase in the national law school applicant pool in 2002 following the 2001 recession.

A bigger surge in law school applications may come next year, she says, since the economic debacle striking so late in 2008 limited the ability of many applicants to apply in time for this year’s spring decisions.  However, the higher cost of law school tuition today and the limited availability of loans also may be discouraging potential applicants.

Certainly the number of students applying to D.C.-area law schools has surged as the economy sunk. George Washington University Law School’s applicant numbers are up 8%, the University of Virginia School of Law’s applicants have risen more than 10%, and Georgetown University Law Center has received 12% more applications than last year.

Andrew Cornblatt, Georgetown’s dean of admissions, says the law school pushed its deadline back a month to March 2 to accommodate last-minute applicants coping with lay-offs and other bad economic news. His office received roughly 1,000 applications on Feb. 2 and Feb. 3 combined, a sign that people were rushing to get in before the original deadline.

Tuition.  Most law schools are raising tuition for the 2009-10 school year by 3% to 15%. Stanford Law School, for example, announced a 3.75% raise and Saint Louis University School of Law is raising tuition by 3%, less than its traditional annual increase of 5%.

Budget cuts in some states are forcing public law schools to debate tuition increases. In Missouri, Governor Jay Nixon has proposed no tuition increases if the legislature doesn’t cut the higher education budget.

Ellen Suni, dean of the University of Missouri-Kansas City School of Law, where annual tuition and fees total about $15,000 for in-state students and $29,000 for those from out-of-state, tuition went up 3.8% last year. Tuition hikes reflect increases in competitive faculty salaries and library expenses that have gone up by more than 10% each year, she says, even though the school has done some cost cutting, such as instituting a hiring freeze.

Albany Law School announced that it is freezing tuition, currently $38,900, for the 2009-10 school year and plans to increase scholarships as well, even though annual giving is anticipated to be down by 10% for the year. Said Thomas F. Guernsey, president and dean, in "these particularly uncertain times, we want to do what we can to make it easier for students who are incurring all this debt."  The school is also considering various cost-cutting measures, such as reducing the number of speakers and their travel costs, temporarily halting courses that have only a few students, and converting paper copying to electronic storage.

On the other side of the pond, three of London’s leading law schools are increasing the cost of both their Legal Practice Course and Graduate Diploma in Law by an average of 9%.

Grades.  Several leading law schools are retooling their grading policies, with some making major revisions. Harvard Law School and Stanford Law School, for example, are switching to pass/fail systems, which Yale Law School has used for decades. And New York University School of Law now allows professors to give more A's. Columbia Law School says it is also reviewing its grading systems.

The changes are being made to create fairer evaluation systems and to better convey students' accomplishments to employers, educators say, although it’s hard to see how a switch from grades to pass/fail accomplishes either. Other advantages cited by the law schools are incentives to professors to conceive innovative course work, reducing grade anxiety of students and providing a fairer comparison of students.

"I think each school has to look at their culture, their own pedagogy, their own curriculum and make a decision for themselves what works best," said Michael A. Fitts, dean of the University of Pennsylvania Law School. Since 1995, the school has given traditional letter grades and sees no need to change that, Fitts said.

The University of Chicago Law School and Northwestern University School of Law said that they have no plans to change their letter grade-based systems. The University of California, Berkeley School of Law uses high honors, honors and pass designations and has no intention of changing that policy, said Stephen D. Sugarman, a professor at Berkeley. "When you have a less refined grading system, people who are employing your graduates are going to make distinctions, but they'll make them on their own grounds," he said.

Hiring.  Despite the economy, the nation’s biggest law firms—the NLJ 250-- hired roughly the same percentage of graduates from the top 20 schools in 2008 (54.6%) as they did in 2007 (54.9%). And the quality of hires arguably went up: those firms also hired 5.3% more graduates than in 2007 from their favorite schools among the top 20. Columbia was at the top of the list of schools sending the highest percentage of graduates (70.5%) directly to NLJ 250 firms, and Boston University School of Law rounded out the bottom with 41.2% of graduates going to those firms. Yale Law School fell from the top 20 list for 2008 primarily because it sends so many, roughly 40%, of its graduates to clerkships.

The hiring statistics make it clear how hard it is to change direction mid-stream for big firms, which usually operate on a two-year hiring cycle and extend offers to most summer associates. 

Compressed JD/MBA. Yale announced recently that it is adding a joint juris doctor and master of business administration program for completion in three academic years. The offering is in addition to the school's existing joint J.D. and MBA program that takes four years. Yale is not the first to offer a J.D. and MBA in three years: Indiana University School of Law — Indianapolis and Northwestern University School of Law also do.

Accreditation. Northwestern University is leading a charge to revamp the criteria that the American Bar Association follows to grant U.S. law schools accreditation.

Outgoing Northwestern University President Henry Bienen has sent a letter to 35 other law schools asking them to sign a statement that urges the ABA's Council on Legal Education and Admission to the Bar to stop stipulating employment terms at law schools. Bienen explained in the letter that the ABA had threatened to revoke his law school's accreditation because it did not provide tenure to its clinical faculty and law library director. The demands were ultimately dropped, but the letter contends it was "an attempted infringement on our authority to govern our institutions."  With supporters on both sides, the issue is dividing the law school administration community. 

Burning Your Diploma. "Jack," a self-described, anonymous, 30s-something lawyer in D.C., who graduated from Harvard Law School has caught the attention of many in the legal field.  He blogs in Adventures of Voluntary Simplicity about giving up the material excess associated with corporate law for a simpler life . Last year he burnt his diploma in a YouTube display and in spite of the economic environment has announced that he intends to leave his $300,000+ legal position.

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On Wednesday, March 25, at 12:30 pm EDST, Ronda Muir and Robin Rolfe will lead a round table discussion of  "How Progressively Managed and Adaptive IP Firms Can Gain an Advantage in a Down Economy."  Sponsored by the Association of Patent Law Firms (APLF) as part of its Brand of Excellence series, this program is offered at no charge and to members only. Additional information can be obtained by contacting admin@plf.org.

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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. 

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How did women in the spotlight fare in 2008?

Here's a sweeping and eclectic review of women in business, politics and law--Senator Hillary Rodham Clinton, Governor Sarah Palin, Caroline Kennedy and Michelle Obama, among others--before the year is too far behind us.  Plus an interesting commentary on how we perceive each other.

Women in Business

A New CEO Record. A January 4, 2009 article in USA Today by Del Jones entitled "Women Still Struggle to Get CEO Jobs" reviewed the current challenges for women. Starting off 2009, Ellen Kullman replaced Chad Holliday at DuPont, bringing the number of female CEOs running the nation's largest 500 publicly traded companies to a record 13, one more than 2008. As recently as 1996 there was only one female CEO of a Fortune 500 company, co-CEO Marion Sandler of Golden West Financial, acquired by Wachovia in 2006, in the news recently because of its high level of mortgage defaults.

Does the gender of the CEO make any real difference in performance?  USA Today has evidently tracked the annual stock performance of Fortune 500 companies with female CEOs since 2003, when female CEOs so out-performed men that it looked like there might be a gender advantage, or at least the possibility that the glass ceiling was so difficult to crack, the women who made it to the top were more talented than their male counterparts.

Devastation for All.  But 2008's devastation gave no advantages to anyone.  The chaos in the financial markets claimed three of its highest-ranking female players—Sallie L. Krawcheck, head of Citigroup’s wealth management unit, Zoe Cruz, a co-president at Morgan Stanley, and Erin Callan, chief financial officer of Lehman Brothers.

And female corporate managers fared as badly as the males. With the S&P 500 falling 38.5%, its worst year since 1937, the average large company run by a woman CEO performed 4% worse. The best-performing of women-led companies was Kraft Foods, down 18% under Irene Rosenfeld. "Nine of those 12 companies have now lost money for any shareholder who invested on the day the women got the job,” Jones notes. “The only exceptions: Susan Ivey at Reynolds American and the two longest-tenured women, Andrea Jung at Avon and Anne Mulcahy at Xerox. Avon is up 65% during Jung's nine years, and Xerox is up 1% during Mulcahy's 6 1/2 years. Reynolds is up 21% since Ivey began in 2004." 

The Glass Ceilinged Pay Scale.  What is clear is that women are paid worse than men at the top. A 2008 survey of CEO pay at 3,242 North American companies by the Corporate Library found that female CEOs earned more in base pay, but when cash bonuses, perks and stock compensation were included, women made a median $1.7 million, or 85%, of what male CEOs made.

Women in Politics

Women in the political arena seem assured of arousing strong reactions, reactions that often have little to do with where they stand on the issues.  And Hillary Rodham Clinton is surely the woman of 2008 who raised the banner for women highest, with her long drive toward the White House, but also the one who took the most sustained barrage of counter fire--as to all matters both professional and personal, such as her experience (does being a first lady count?), her honesty and forthrightness (are tears the real test?), and her relationships with her husband (is she true to her man, unable to stand up for herself, or simply astute as to his political usefulness?).

As an example of the broad-based criticism, Caitlin Flanagan in No Girlfriend of Mine, in the November 2007 edition of The Atlantic, had little good to say about Clinton.

Her speaking style: "It’s cringe-inducing to watch her try to talk…there’s nothing more uncomfortable than witnessing someone straining to be natural.”

Her relationship with her husband and reaction to his philandering: "[A]t a La Raza conference… [Hillary] told her interviewer that they should talk like ‘two girlfriends…’ Hillary’s girlfriend-to-girlfriend moment was awkward because if she wanted to talk that way she would have to be willing to let us women in on the big, underlying struggle of her life that is front and center in our understanding of who she is as a woman. Her husband’s sexual behavior, quite apart from the private pain that it has caused her, has also sullied her deepest—and most womanly—ideals and convictions, for the Clintons’ political partnership has demanded that she defend actions she knows to be indefensible…In glossing over her husband’s actions and abetting his efforts to squirm away from the scrutiny and judgment they provoke, Hillary has too often lapsed into her customary hauteur and self-righteousness, and added to the pain delivered upon these women… she has of necessity made herself complicit.”

Even Hillary's treatment of Socks and other pets came under withering attack.  According to Flanagan, as first lady Hillary had taken Socks with her on personal appearances, had retired servicemen and women at the U.S. Soldiers’ and Airmen’s Home in Washington, D.C. send out kitty-cat 'greetings' to Socks’s correspondents, and had written about her in Dear Socks, Dear Buddy: Kids’ Letters to the First Pets, which Flanagan calls "cloying, super-cute, and pun-riddled… and which Hillary, being Hillary, had to turn into a lecture on pet care…the person whose shining example we should all follow being Hilary herself."

In response to rumors that Socks would not make it to Chappaqua, entreaties from the official Socks the Cat Fan Club as to the fate of Socks were reportedly met with a message from Clinton’s office “at once chilly and patronizing… that they butt out,” Flanagan reports. The news came later that Socks had gone to live with a White House staffer. “In Dear Socks, Dear Buddy, we are hectored never to give away a pet, always to regard one as an ‘adoption instead of an acquisition’ and to be forever on guard for its physical safety (cold comfort to Buddy, who had barely sniffed his first Chappaqua crotch before the poor beast ran off and got killed by a car, as had the Clintons’ previous dog, the much-loved but equally ill-tended Zeke).”  According to Flanagan, Hillary "should really be on Cat Fancy’s Most Wanted list.”

Then of course there was Governor Sarah Palin, who leapt on the scene, connecting with a large swath of middle America while enraging those further flung. Toward the end of the year, Caroline Kennedy appeared on the political stage in search of Senator Clinton's seat (before she awkwardly bowed out early this year), and, with Clinton and Palin, formed a veritable troika of controversy over a woman's place in government, and what qualifies her to get there. 

In an article entitled When is it Sexism?, Elizabeth Wurzel claims to have an answer to the question of whether these women were treated unfairly because of their gender. "In Sarah Palin’s case, it was [sexism] (sorta). In Caroline Kennedy’s case, it isn’t. Here’s the difference," she asserts.

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In a February 8, 2009 New York Times op ed column entitled "Mistresses of the Universe," Nicholas Kristof notes that senior staff meetings of Wall Street types resemble “a urologist’s waiting room” and suggests that "Wall Street could use an infusion of women as well as cash." 

Having more women in financial services might counter some of the risk-taking and competitive urges fostered by high levels of testosterone and would improve decision-making, according to the research Kristof cites.  In addition to suffering from testosterone-overload, men are also found in the studies he cites to be “particularly likely to make high-risk bets when under financial pressure and surrounded by other males of similar status. Women’s risk-taking was unaffected by this kind of peer pressure.” 

Of course, women managers also have their Achilles heels. The January 2009 Harvard Business Review includes a 360-degree feedback study by Herminia Ibarra and Otilia Obodaru that finds that female leaders are perceived to be strong in traits such as tenacity and emotional intelligence, but trail men in one important aspect: their superiors, peers and subordinates say that women leaders lack vision.

Better Performance in Diversity. Regardless of our specific gender strengths and weaknesses, the data on the advantages of having diverse management is piling up. Two separate studies in 2008, one by Catalyst, an organization that supports expanded opportunities for women at work, and the other by management consultant McKinsey & Co., looked at gender in management and found that companies with more female executives perform better. 

Why would that be?  University of California-Irvine professor emeritus Judy Rosener says brain scans prove that men and women think differently. Rosener says she's concluded that a company with a mix of male and female leaders, with their differing attitudes regarding risk, collaboration and ambiguity, will outperform a competitor who relies on the leadership of a single sex.

Women aren't better, Rosener says, but they bring to the table something that men don't.

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What happens to our ability to make good decisions going forward when we and all the world are gripped in fear of what we might lose (or already have lost)?

Gregory Berns, director of the Center for Neuropolicy at Emory University, makes a good case in a recent New York Times article for the profound impact fear has on our decision-making. 

As part of an experiment seeking to replicate on humans the effects of the old electrified Skinner box conditioning, participants were advised that they would receive a shock after a time period of one to 30 seconds. For most people, it was the wait that was most uncomfortable. Anticipating the (mild) pain was worse for them than actually receiving the shock. Everyone preferred to experience the shock immediately rather than wait for it, and nearly a third elected to receive a bigger shock right away rather than wait for a smaller one.

From an economic or policy standpoint, that result is illogical--a bigger shock whenever received is patently worse than a smaller one. What is clear is that fear of the pain—deployed in anticipation of the shock—took such a large toll physiologically and psychologically on the participants that they had less available energy and neural processing power to rationally assess their next move. 

 

The same parts of the brain activated in this experiment are also active when people must part with something that is valuable to them, and a similar pattern is observable. The implication is that when we anticipate any kind of loss, we exert a lot of energy to hold onto what we have, diverting that energy from endeavors that may well better serve us.

 

When the fear/loss system is activated, exploratory activity and risk taking are turned off and data processing is impaired.  Of course, if everyone reacts this way, not only is there a downward economic spiral, but the overall level of cognitive functioning also drops. 

 

Which means that progress is impaired. Just at the time when we are most in need of it.

 

And the more fear there is, the more fear there is likely to be. 

 

In a recent double blind study, researchers from Stony Brook University in New York found that participants were actually able to "smell fear" produced on the clothes of 40 volunteers who went on their first skydive, compared to a second group of non-skydivers who had simply been narrated a frightening story.  In an MRI scanner, the participants showed increased activity in their amygdala and hypothalamus in reaction to the fear they smelled--in other words, smelling fear in others engendered fear in the participants. 

 

Further, the experience of fear (and perhaps anger) primes the over-perception of fearful and anger-inducing scenarios, making us see more fearful scenarios than may actually exist.  In a series of experiments involving a broad range of types of stimuli, happy subjects perceived more happy faces and friendly interpersonal scenes while fearful and angry subjects perceived more fearful and angry faces and hostile interpersonal scenes. Thus, being in a fearful place not only reduces your capacity to best get out of it, it actually magnifies your negative experience by distorting your perceptions.

 

Psychologist Abraham Maslow said "I can feel guilty about the past, apprehensive about the future, but only in the present can I act. The ability to be in the present moment is a major component of mental wellness."

 

What to do to get out of the grip of fear and into the present? Berns suggests that in order to neutralize that brain drain, you have to reduce the instigators of fear:  avoid the fearmongers, turn off the disturbing news and stay away from the market tickers.  Being more positive (hard for us pessimistic lawyers) and consciously looking for opportunity and how to move forward constructively can take you out of the preoccupations that are distracting you from the important business at hand.

 

We only have fear itself to fear.

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A 2008 ABA Journal survey, with reponses from more than 1400 women lawyers, produced some interesting results as to who they prefer to work with.  Of the 42% of women who expressed a preference in the gender of colleagues, that preference was different depending on the age of the respondent. 

Female supervisors age 40 and over preferred working with women lawyers because they 1) take direction better (80%), 2) have more discretion (79%) and 3) take constructive criticism better (59%).  

Yet younger female lawyers don’t have the same regard for their older female colleagues. Of those under 40 who thought gender matters, the majority preferred male supervisors for 1) keeping confidential information private (64%), 2) giving better direction (58%) and 3) giving more constructive criticism (56%). 

Theories about the reasons for the difference abound. Some contend that younger women (and also some younger men) are not on the same wave length about the role of work in their lives, and are not willing to make the sacrifices that older women have made.

According to Lauren Stiller Rikleen, who advises law firms about workplace issues, “I'm concerned that more senior women don’t fully understand the profound demographic changes taking place,” demographic changes that affect all young lawyers and override issues of gender. As a practical matter, Arin Reeves, another lawyer who does diversity consulting, notes, the differing generational views of women can mean that women’s initiatives developed by female partners are often not useful to female associates.

The upshot is that there may no longer be “the woman’s situation,” but rather a growing diversity in what women lawyers want, and, given the luxury of having more role models to choose from, a growing diversity of what they can actually have. Perhaps it is worthwhile reminding ourselves that, as we have advocated for years, rather than placing judgment on women generally or on any particular choice, we as women lawyers can and must accept more diversity even among ourselves.

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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.

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Contact us about crafting a six to eighteen month confidential high-performance coaching program that is tailored to your objectives and schedule.  We draw from years of experience in practicing law and in providing management and marketing advice for lawyers and make use of sophisticated behavioral science tools to help you accomplish your goals for 2009.

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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!

 

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David Brooks' editorial in the October 28, 2008 New York Times predicted that the current financial crisis would "amount to a coming-out party for behavioral economists and others who are bringing sophisticated psychology to the realm of public policy."  Of the four steps of decision-making--1) perceiving a situation, 2) thinking of possible courses of action, 3) calculating the best course, and 4) taking action, Brooks notes that the third step--rationally calculating and maximizing what is in the best interests of those involved--has long been considered the most important.  But he suggests that comments by "experts" like Alan Greenspan in his testimony before Congress, that he was "shocked" at market conditions, may drive us to reevaluate the importance of step one:  perceiving the situation.

In Nassim Nicholas Taleb's book "The Black Swan," published in 2007, he wrote that "The government-sponsored institution Fannie Mae, when I look at its risks, seems to be sitting on a barrel of dynamite, vulnerable to the slightest hiccup."  Globalization, he noted, "creates interlocking fragility," and the growth of giant banks give the appearance of stability, while in reality, they raise the risk of a systemic collapse, for "when one fails, all fail."  But why didn't the financial movers and shakers perceive that to be the case?  Or even one possible case?

Behavioral economists have explanations for why so many smart people could have been so wrong about the risks that they were unwittingly taking.  Biases in our perception that distort our thinking include a tendency to see data that confirm our prejudices, a tendency to overvalue recent events as predictors, assigning a single causal narrative to coincidentally succeeding facts and applauding what we suppose to be our skill rather than recognizing the role of dumb luck.  And we can also get caught in social contagions that reinforce each other's (often poor) risk assessments. 

The solution that some propose for the financial arena is to have the government take on more of the job of assessing situations, and applying regulations.  Of course, government officials are probably going to be even worse perceivers of reality than private business types.  Their information feedback mechanism is more limited and, being deeply politicized, they're even more likely to filter out inconvenient facts. 

Lawyers, being for the most part pessimists, would seem to have the exact skill necessary to root out and protect against just this sort of unintended economic consequence.  Lawyers should be able to think of all the possible ways these various financial scenarios could go wrong, and at least sound the alarm if not plug the hole.  But the critical word here may be "think."

Our data on emotional intelligence in lawyers tells us that, when it comes to emotion, perceiving--correctly identifying the emotional currents at play--is what lawyers are least good at, accounting for a large proportion of the drop in average lawyer scores compared to general US population scores.  A number of experiments verify that being unable to tap into one's own and others emotions can mean a significant delay, or total failure, to identify risks or dangers that the emotional part of the brain is able to sense.  In a well-known card-playing experiment, recounted in Malcolm Gladwell's book "Blink," participants are able to emotionally identify (measured by blood pressure and heart rate) the decks of cards that are stacked against them many, many cards before they can rationally do so.

Of course it is not just lawyers who can be out of touch with their emotional red flags, and it wasn't just lawyers that got us into this imbroglio.  Plenty of non-lawyer MBAs, PhDs and other regular types clearly missed the perception boat this time.  Nonetheless, one step toward better perception in the world of finance and public policy would be for the legions of lawyers involved--at the SEC and other government entities, banks and financial institutions and law firms servicing them--to improve their connection with their and others' emotions, so that they can feel as well as think about the dangers out there, and hopefully avert just such a catastrophe as this one.  And the good news is that perception in this area of expertise can be improved. 

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What do you know? Narcissists--big personalities with big egos who like to exert control and reject collaborative decision-making--are the ones leading many law firms through these perilous times. 

"Narcissistic leaders are distinguished by their big ideas...and general indifference to the opinions of others,” according to Douglas Richardson of Altman Weil. “They resolutely reject the status quo, thus affronting all those tied to tradition and cautious about change. They want to reshape the world to their vision. They don’t much care if others label them vain and self-centered; they count on the power of their vision and their personal charisma to drive them to the top during periods of great upheaval or change. Their style is at best despotic, and often coercive.”

Such leaders tend to be nonreflective and poorly attuned to the needs of differing individuals, Richardson writes. The results are high lateral partner movement and high attrition among younger lawyers for whom money and status are not primary motivators.

Richardson says such leaders may display genius and vision, but they are at their best when they know their limits—or when someone can point them out. He suggests hiring an outside coach “with plenty of candor, a tough skin and a strong mandate from the firm to help with top team-building.”

 

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According to the “broken windows” theory of social science, addressing small concerns (like broken windows) that matter to individuals eventually produces major improvements in the overall sense of community and belonging, which in turn fuels a more committed, dedicated group. This theory was instrumental in rebuilding parts of Harlem, the South Bronx and other devastated areas. 

In this difficult economic climate, there is a great temptation to do the reverse:  delay until a better financial day fixing the broken windows that litter our organizational landscapes.  Why not save the money for the bare necessities?  Why not focus on growing business or collecting revenues, which have clear connections to the (ever-diminishing) bottom line?

While firms are laying off associates, reducing their non-equity troops, halving bonuses and freezing salaries, they would be advised to make sure that they are not neglecting the small things that make a firm a good place to come to work every day--courtesy, interest in each lawyer's work, willingness to spend time training, providing feedback, and whatever other individual strengths your firm prides itself on.  Do the simple, doable things that make your lawyers feel someone is listening and responding:  adjust heat or air-conditioning levels, extend night staff hours, upgrade the coffee. Small steps will make the difference in whether your lawyers have a sense of devastation or rebuilding.

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At a time of roiling emotions in the legal and financial sectors, successfully charting a path to the future may be impacted by how we perceive and respond to those emotions in our organizations.  A recent article entitled "Associates Should Keep Their Emotions in Check" advocates guarding the emotions associates experience in the law practice setting. 

"We can't be distracted by crying about our recently fired colleagues when we have to depose the CEO of a multinational conglomerate," it explains. "Being in touch with--and in control of--your emotions is key to success at Biglaw."

Lawyers at all levels--not just associates--often score poorly on emotional intelligence assessments because of their reduced ability to do just that--be in touch with and in control of their emotions.  So that advice looks good on first impression, but the body of the article, while often tongue-in-cheek, makes it clear that ignoring or suppressing emotions have historically been the real keys to law practice success.  That advice, in black and white, is not only disarming but also not well suited to the trials lawyers and law firms have before them.   

Historical Emotions and the Wave of the Future

Of those emotions historically expressed in law firms and law departments, certainly some have been much more prevalent, and welcome, than others. Joy, for example, is not an emotion that lawyers have exhibited readily.  OK, it's all right to strut your stuff after a critical win:  a big jury verdict, or the final go-ahead from the FTC.  You should also be able to feign your way through an evident appreciation of your client's or supervising partner's adventure stories.  But neither of these is really joy--more like pride and socially sanctioned deception, respectively. 

Joy is what is felt when you're in that great limitless zone of both doing what you are good at and feeling there is value and meaning to what you do.  Joy is in short supply in legal practice these days and when it arises, it is too often squelched by the pessimists who view it as evidence of not working hard enough (so as to be appropriately worn down) or not taking seriously the heavy risks associated with the job (so as to be appropriately worn down).

Sadness, joy's opposite, has not been very evident in law practice either, often viewed as a sign of weakness.  Drag around about your spouse leaving you or your dog dying and, in this climate, you risk losing your job because of being perceived as not up to it.  The irony is that sadness, in particularly the serious kind that develops into depression, is in fact up to ten times more prevalent among lawyers than any other profession--so even if you can't always see it, it is there.  And the characteristic pessimism that puts lawyers in good stead in the courtroom and boardroom makes it harder in these difficult times for the sad to see the light at the end of the tunnel.  So sadness in the office may be on the rise.

Fear is also one that we lawyers eschew to avoid looking weak.  But fear may be an emotion that is more in evidence these days too: fear about everything from the global economy down to the mortgage payments no one is going to bail you out of.  And those fears, the full range of them, may well be what is motivating strategy at a number of firms now.  Combined with pessimism, fear is a motivator that can hijack the deliberative process, sacrificing long-term health for a short-term salve.

Perhaps the one emotion with which lawyers are openly familiar is anger.  One of the few raw emotions long allowed to flow freely in law firms, it seems most accepted in senior lawyers. Screaming, slamming the door, cussing out opposing counsel on the phone--these are often taken as evidence of practicing hardball in a high-pressure, high-powered job.  The anger that is not embraced is the one simmering among the stressed-out associates, who don't appreciate being taken from personal or family time to perform mind-dulling document reviews, or the anger among junior partners trying to maneuver the compensation and power game without turning irate senior partners against them.  And senior partners are angry because, having jumped through all the hoops and put in their time, they are watching as the promised fruits evaporate before them.  What can erupt is a conflagration of anger that can blow up the firm.  Which is also on the rise.

Responding to Emotions

So how do we handle the emotions of these times?  The massive changes in the financial climate and the likelihood of similarly massive changes in individual firms' fortunes have confronted some law firms and law departments with the same grieving process that individuals go through after a death or other personal tragedy.  Dr. Elisabeth Kübler-Ross, the pioneer in grief theory, posited five sequential stages:  denial, anger, bargaining, depression, and acceptance, which are commonly referred to as the "grief cycle".   Only by getting to acceptance--finally realizing and accepting that many of our dreams and aspirations are no longer part of the current reality--are we able to move on to the possibilities that remain, and how best to achieve them. 

Our advice to firms caught in this emotionally spiraling time is to create a climate that allows your lawyers to experience their feelings and individually arrive at the best method to cope with them.  Allow the community to grieve--to deny, be angry, bargain and be depressed.  Before acceptance, these stages must be navigated.  For their part, management can regularly hold firm meetings that recognize the fear and anger and lost dreams, but that also point out the realistic dimensions of the situation.  More, not less, information on the state of firm finances and what the firm intends to do, and specifically how each lawyer can help, can bring the firm together.  Even honestly reporting that a strategy is still being decided on is better than deferring to the rumor mills. 

Maintaining and even expanding measures that bring cohesion to the firm and reinforce its culture is also critical.  More than one exiting Heller Ehrman lawyer said they would have stayed even with reduced compensation and prospects if the firm had held true to its culture, the culture that they had initially embraced and repeatedly committed to.  The reason for staying with that particular firm, regardless of its financial condition, evaporated when it lost its defining culture.

 

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Teamwork may be the 21st Century's technology, in that it promises greater productivity--but only when used well.  After seeing double digit increases in firms that have implemented team systems--management, marketing,  industry and client teams--an initial question many interested law firms have is how to go about achieving teamwork.  Luckily, research provides a clear "life cycle" of teams that can help firms successfully reach team goals.

The stages of teamwork, according to the established models, are 1) forming, 2) storming, 3) norming, and 4) performing.  The forming stage, even among lawyers, can be marked by tentative and polite accommodation.  Unsure of their roles and the leader's competence, team participants need the leader to be clear, directive and highly structured during this first stage. This is not the time for a consensual  "Well, what do you think we should do?" approach.

During the second, storming stage, team members, particularly lawyers, will stake out their positions to test what their authority will be.  Conflict is often a result.  This is a positive development.  Handled well, the team will learn from experience that it is safe to engage in conflict, and that issues can be settled without lasting acrimony or division, even if it requires agreeing to disagree.  This is the basis on which trust and respect is established.  Leaders are often criticized during this stage, as much because of their role as because of their personal attributes or performance.  Leaders who can keep from reacting defensively will avoid exacerbating and prolonging this stage, which, being awkward and uncomfortable, helps propel the group to resolve their differences and move forward into the next stage.

During the third, norming stage, based on the higher level of trust achieved during the 2nd stage, the group's goals are revised and a division of labor, with clear roles, is determined. 

The problem in law firms is that often lawyers don't make it out of stage 2.  Tenacious about protecting their authority and unwilling to trust others to whom work must be delegated, these lawyers keep the team in unnecessary meetings and conflict.  Yet it is only in stage 3 that delegation becomes effective and the individuals are freed up to do their work.

Stage 4 is performing, which is the highly productive stage that teams are made for.  At this point, if members are added or removed, or the goals or delegation changed significantly, the team may regress back to an earlier stage and have to work their way up again.

Ideally, team members spend about 75% of the team time on accomplishing their tasks and 25% on participating in the team process, i.e. on maintaining group relations. Goals that are most amenable to team accomplishment are ones that require collective action, i.e. that no one person could accomplish on his/her own and that are meaningful, even inspiring.  The most effective teams have an emotional commitment to the goal, so framing goals as being in the individual team members' interests is vital. 

Finally, team goals should be specific, measurable and attainable, with a real deadline that allows the team's work to culminate in a completed project.  Ongoing goals make it difficult to maintain team motivation and momentum.

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In an article entitled "Welcome to the Future: Heller Shock?", Paul Lippe, founder and CEO of Legal OnRamp, a private interactive legal services site, makes the case that, in the future now dawning on the legal services industry, the inevitable downsizing will not only be a matter of laying off lawyers, but, as with the case of Heller Ehrman, the failure of large, global firms.

And Lippe argues that none of us should be surprised.  He cites the underlying fallacies that have driven many of the mergers that created these firms: inevitable growth, economies of scale, and organizational allegiance, among other things.

The truth behind these fallacies is often associated with the unique personalities of lawyers.  See Muir's "The Unique Psychological World of Lawyers."   Lawyers often lack the inclination or ability to collaborate or the critical relationship skills that are necessary to fuel the drivers, such as cross-selling and teamwork, that produce economies of scale, increase revenues and reduce expenses.  And many compensation systems don't incentivize lawyers away from their natural tendencies toward those results.

Similarly, lawyers' lack of institutional loyalty and the personal traits that fuel it, like high skepticism, low sociability and strong autonomy, are not only individual attributes but have become embedded in their organizational ethos also. The failure to build strong individual relationships within the firm is often compounded by firm policies that fracture what relationships exist--such as reducing partners with stakes in the financial success of the firm to non-equity employees--and that again encourage what are already ingrained lawyer tendencies, such as compensation arrangements that don't incentivize client sharing, so individually horded clients become easily portable away from the firm.

Other traits, like low lawyer resiliency and high pessimism, play a part in keeping firms from exploring innovation-- and thereby risking failure--at a time when nimble, creative, proactive change is vital.  Virtual law service?  Different fee structures? Customized work arrangements both with employees and clients?  Hard for most lawyers to consider, let alone agree on and deliver. 

Similarly, lawyers' preferred methods of dealing with conflict--winning and avoiding--limit their ability to recognize, confront and address collaboratively those divisive issues that could determine the future of both their own practice and their firm.

Lippe concludes that managing the changes that are going to be forced on firms will require greater investments in capital and culture, a difficult pill to swallow in these lean times, but one, he maintains, that could make the difference between survival and failure.

In spite of the economy, now is the time to invest in your people, the most critical asset of law firms and law departments.  Your strategic plan, leadership model, partnership structure, partnership compensation arrangements, legal services delivery model, recruitment policies, attorney education and development methods, associate compensation, evaluation and deployment systems, and client relationship evaluations and business development strategies all require a well-informed understanding of the lawyers who populate your workplace.  It is a wise investment in those people that will bring your organization out the other side of future shock.

 

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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.

 

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Norton Rose, a 200 year old UK firm with over 1000 lawyers in 20 offices around the world, is considering scrapping its academic requirements for new hires in order to increase diversity.  How then to decide who to bring on board? 

Like a number of leading UK law firms, it will rely on aptitude and psychometric testing instead.  Lovells, CMS Cameron McKenna, Linklaters and Clifford Chance all already use some form of testing as part of their selection process. The approach is expected to be particularly effective in efforts to recruit international students who may not meet UK academic guidelines. 

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The depression demon attacks lawyers with particular vengeance, and denial and secrecy have long been the response. The recent loss to suicide of prominent lawyers from across the country, and the near loss of others, has inspired the courageous to speak out, a first step toward turning the professional spotlight on a condition that is rampant, but also treatable.

Evidence of the problem is long-standing. A landmark 1991 study by Johns Hopkins University ranked lawyers first, among 105 professions surveyed, in the rate of clinical depression.  A 1992 OSHA report found that male lawyers in the US are two times more likely to commit suicide than men in the general population. Lawrence Krieger, a clinical professor at Florida State University College of law, who focuses on work-life issues for lawyers, has research showing that practicing lawyers exhibit clinical anxiety, hostility and depression at rates ranging from 8 to 15 times that in the general population. Research in North Carolina indicates that 11% of lawyers in that state think of taking their own life at least once a month.

After the suicide of several prominent Texas lawyers, including Kenneth Malcolm “Mack” Kidd, a justice on the 3^rd Court of Appeals in Austin, and Hermes Villarreal, a lawyer who had a loving marriage, three happy children, a successful personal-injury practice and was chairman of a community mental health facility, Texas State Bar Association president Martha Dickie commissioned a task force and video on depression last year as part of her focus on lawyer mental health issues. Over 1500 videos have been distributed. “Lawyers and suicide—it’s rampant,” says Dickie. “I am absolutely convinced that this video is saving lives.”

Daniel Lukasik, managing partner of a Buffalo, New York personal injury firm, became a courageous advocate of treating depression in lawyers after his therapist told him that one-quarter of his clients were, like Lukasik, lawyers suffering from the illness, yet there were no peer support groups. 

On a mission, Lukasik helped create the Committee to Assist Lawyers with Depression for his county bar association, which was recognized with a Certificate of Merit during the New York State Bar association annual meeting this year. He also created the web site www.lawyerswithdepression.com to offer lawyers information on the disorder. Further, he organized  in Buffalo this year what may be the first national seminar on attorney depression. 

The problem of depression is starting to be addressed at the law school level.  This year the 51,500-member American Bar Association Law Student Division launched a mental health initiative to help law students battling depression and anxiety. A mental health on-line toolkit is being offered to student bar organizations and law schools around the country. 

Complicating all these efforts to assist lawyers is the individual's fear of being stigmatized should their condition be known.  This year the ABA adopted a model rule that would grant conditional admission to practice law to applicants who have substance abuse or mental health conditions, for which in many jurisdictions applicants are deemed unfit to practice law. Applicants must demonstrate recent rehabilitation or successful treatment.

These and other initiatives to recognize and provide assistance for depression seem to be starting to have an effect.  Patricia Spataro, director of the New York State Bar’s Lawyers Assistance Program says that now 30-40% of their calls are related to depression, compared to almost zero only a few years ago. The New York City Bar’s Lawyer Assistance Program reports similar increases. “When I started with this program nine years ago, I actually had a lawyer with depression tell me that he wished he was an alcoholic because it would have been easier to deal with,” said Ms. Travis, director of that program.

In England, the Solicitors Benevolent Association, Solicitors’ Assistance Scheme and Law Care have all resolved to work more closely in helping solicitors cope with the pressures of modern practice. Lawyers in the UK, as in the US, spend so much time solving other people’s problems, they believe they should be able to handle their own problems as well, even though they have no expertise in this area, notes LawCare CEO Hilary Tilby. “Our joint aim is to help them recognize they have a problem and offer a solution for dealing with it.”

Why does such a debilitating illness strike the legal community so fiercely? Pessimism is an attitude that has been demonstrated to be highly correlated with success in the practice of law, but it is also a trait that is strongly associated with depression, particularly when coupled with ambitious, high-achieving, perfectionist, type-A personalities who put tremendous pressure on themselves.

The key is making sure lawyers know that there is assistance available that can make life and work more rewarding.

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In a recent article in The New York Times entitled “Girl Power at School, But Not at the Office,” Hannah Seligson gives some good advice to all working women, even those of the “post women’s right movement” generation in which she grew up. 

After feeling self-assured and equal to men in academia, Hannah found the workplace to be different: women undermining other women, men not taking women seriously--focusing on their appearance and “assistantizing” them.  

But she also recognizes that women can get in their own way in the workforce. Work skills women must develop, in her opinion, are a thick skin, the ability to promote oneself, and the ability to negotiate. She also recommends that women dump the perfectionism and create a professional network.

Here are some jewels to consider:

Rather than getting rattled by their feminine “sensitivity,” women have to “become impervious to the daily gruffness that’s a part of any job.”  

Seeking perfection can lead to paralysis and keep women from speaking up or taking risks. 

“Soliciting feedback… demystifies what your boss thinks about you and it also gives you the data to become a more valuable employee.”

“Reprogram your brain to think that girls do brag. Your job is a two-part process: one is actually doing the work and the second is talking about it in bottom-line terms.”

Since “women don’t have as much of a tradition of business networking (‘Do you want to go grab a beer?’ doesn’t quite roll off our tongues),” learning to ask colleagues specific questions about how to advance can be the organic approach to mentoring. 

Finally, women need to “speak salary.” Women often think they will be paid what they deserve, as long as they do the work. Follow the example of men who fearlessly ask for a raise over and over again, regardless of the response. As a Harvard Business School faculty member explained: ‘By and large women believe that the workplace is a meritocracy, and it isn’t.”

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Sonja Lyubomirsky, Professor of Psychology at the University of California, Riverside, admits being surprised by the results of the research she conducted on how to permanently increase happiness, funded by a 5-year million-dollar grant from the National Institute of Mental Health.  She conducted a meta-analysis (a "study of studies"), along with Ed Diener and Laura King, two well-known names in positive psychology, of 225 studies and concluded by writing The How of Happiness (Penguin Press, 2008).  

Lyubomirsky expected, consistent with a number of previous, more limited studies, that relationships would emerge as the over-arching key to well-being.  Contrary to those expectations, she found that, more than any other variable, including relationships, work was both a cause and consequence of happiness.  

"The evidence demonstrates that people who have jobs distinguished by autonomy, meaning and variety - and who show superior performance, creativity, and productivity - are significantly happier than those who do not," she concludes.

"Why does our work make us happy? Because it provides us a sense of identity, structure to our days, and important and meaningful life goals to pursue. Perhaps even more important, it furnishes us with close colleagues, friends and even marriage partners."  So the relationship piece is not lost, but plays a supplemental role to work itself.

The story doesn’t end there, however. Her studies reveal that the causal direction between happiness and work runs both ways. Not only do creativity and productivity at the office make people happier, but happier people have been found to be more creative and productive. They are better “organizational citizens” (going above and beyond their job duties), better negotiators, and are less likely to take sick days, quit or burn out.

One interesting finding was that people who express more positive emotions on the job receive more favorable evaluations from their supervisors as much as 3.5 years later.

"The more successful we are at our jobs, the higher income we make, and the better work environment we have, then the happier we will be. This increased happiness will foster greater success, more money, and an improved work environment, which will further enhance happiness, and so on and so on and so on."

What does this have to do with our legal business?  Of autonomy, variety and meaning, autonomy is the one we have nailed.  Autonomy is often an attribute of the legal job, one that research shows lawyers embrace, sometimes to the detriment of collaboration.  Variety is worth noting, given the rush to specialization.  In light of high salaries, many firms have retreated from the first-year rotations through departments and later year department-wide assignment systems that used to give young lawyers some claim to it.  Carefully reinstating some opportunities for variety may be greatly appreciated.

Meaning can be harder to come by, being the trickier piece to consciously engineer.  Information we have on why young people, particularly Gen X and Yers, go to law school, and what they hope to achieve in their careers, reinforces the importance of meaningfulness.  As a practical matter, that is often assumed to be measured by the amount of public or pro-bono work available to them.  Reinvigorating your pro bono program, and involving young lawyers in the process, is a good first step but also articulating and reaffirming the firm's values vis-a-vis those within the organization (for example, "we provide premier training and career support") and its clients ("we build long-term relationships based on superior industry expertise and unparalleled service") helps young lawyers place themselves in a framework of meaning.

Creativity is a skill not as often singled out for recognition by law firms, and even productivity is usually rewarded only on a single level minimum-billed-hours-required-for-the-bonus formula.  Fine-tuning both salaries and bonuses so as to reward specific behaviors, such as business development activities or developing a specific expertise, offers eager Type As the opportunity to both increase their compensation and distinguish themselves from the pack, while achieving firm goals.

Providing positive feedback is an important part of evaluations that firms often overlook, so set in their problem-solving mode that they forget to reinforce what's working.  This study points out the importance of encouraging evaluees to crow or compliment too, for the firm's sake as well as theirs.

In short, this meta-study flags as important some of the same things we hear from lawyers going out the door:  provide a more meaningful, personally relevant work experience with supportive personal relationships in order to increase satisfaction and earn loyalty.

Now, back to work...

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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.

 

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The keynote speaker at the opening of the 2008 International Conference on Emotional Intelligence this week was Jim Kouzes, coauthor of the award-winning best-seller The Leadership Challenge, executive fellow at the Center for Innovation and Entrepreneurship, Leavey School of Business, Santa Clara University, and, according to The Wall Street Journal, one of the twelve best executive educators in the U.S.

What did he have to say that is of interest to the legal world? At a time when we are struggling, in spite of the economy, to retain both young lawyers and more senior attorneys with books of business, Kouzes revealed what makes people committed to their organizations: values.

According to Kouzes, the first step in earning employees' commitment is the clarification of organizational values. His research indicates that people who are clear about their organization's values (and also their personal values) are significantly more committed to the organization than those individuals who are clear about their personal values but unclear about the organization’s values.

All leaders must, therefore, he contends, be crystal clear about what they stand for.  The lynch pin for making this approach effective, however, is that leaders must be credible—the troops have to sincerely believe that their leaders not only say their values, but also do what they say.

Tony O'Reilly, CEO of H.J. Heinz, said it this way:  "Nothing energizes an individual or a company more than clear goals and a grand purpose. Nothing demoralizes more than confusion and lack of content."

The concept of "organizational values" are often viewed with suspicion by lawyers, who smell something akin to partisanship or other lack of objectivity.  Values are not one of those protected statuses under Title VII.  You can legally proselytize (and hire and fire) "what we believe in."  But you have to start out knowing what that is.  And living it. 

Ahhh.  There's the rub.

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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. 

 

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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?

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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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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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Washington and Lee University School of Law has announced a plan to replace all third-year academic classes with hands-on "experiential" learning.  Recently approved unanimously by faculty, the new curriculum will be phased in over 3-4 years and teach practical skills by using simulations and real-client interactions.  It will also emphasize non-traditional topics like attorney-client communication, working in teams, problem-solving and civil leadership. 

The revised program is in response to firms, corporations and judges urging greater law school emphasis on professionalism and learning in context.  Following the March 2007 Carnegie Foundation for the Advancement of Teaching report on inadequacies in law schools, a network of 10 law school launched a project that aims to improve how law schools operate and teach.

Another relevant area that law schools would be wise to teach is leadership and management.  Leadership and management skills are increasingly important to both the individual lawyer's career and to the success of his/her law firm/law department.  Orrick, Goodwin Proctor and a number of other law firms send their young partners to Harvard  or other business school leadership courses, and/or hold off-site workshops for junior partners on leadership and law firm economics, management and team-building.  But partnership is often late to be grooming those skills.  The next bold step will be for law schools to introduce these critical subjects, and start identifying and honing associated skills, while lawyer students are mastering legal subject matter.

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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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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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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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Muir is participating in a business development program for new partners of a global law firm.  The program involves small group training and individual coaching to produce individual business development plans that can help put new partners' careers on a productive course. 

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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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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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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?

Continue Reading...

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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, General Counsel and Secretary of Rhodia Inc., in the July 2007 issue of InsideCounsel.   Rhodia has "embraced professional objectivity of its in-house lawyers as a core value" and Donahue wants to make sure that "our lawyers can deliver bad news to clients," with whom they are often closely aligned. 

Valuing Courage

Given the data we have about the strong tendency of lawyers to avoid rather than confront conflicts (yes, even those feisty litigators, oddly enough) (see my article "The Unique Psychological World of Lawyers"), Donahue's goal is one that can't be lauded enough.  Hospital administrators contend that a ratio of 1 conflict avoider in 4 employees results in a "dangerous workplace"--think:  "I don't want to get so&so in trouble over reusing needles" or "Maybe she'll start writing down dosages after she gets used to our procedures". 

Left to their own proclivities, lawyers' much higher rate of avoidance than hospital workers risks being just as dangerous.  Avoidance not only fails to resolve firm and client issues, but at the extreme, failure to report and confront violations of Sarbanes-Oxley, insider trading and discrimination laws, to name a few, can not only crater a career, but also a firm or a company.  Add in malpractice, fraud and the range of criminal possibilities (see, for example, Enron and other corporate demises and the unfolding saga of Milberg Weiss Bershad & Schulman) and silence should never be considered golden.

Hence Donahue's laudable efforts to support and promote courage.   

Which is where our thought for today could end.

Evaluating Courage

But Donahue goes further than suggesting putting in place environmental supports like "constantly talking" about maintaining objectivity, creating a culture that embraces bearers of bad news and rotating lawyers among client departments. He wants his lawyers' courage to be evaluated and then to compensate them accordingly.

Evaluating courage or any other personal characteristic as it relates to their work is a radical idea to many lawyers. Basing compensation on that evaluation is outlandish.  They don't know what a "behavioral characteristic" actually means, don't trust the evaluation process, and certainly don't think their compensation should be linked to so un-rigorous a process.  They are, after all, good lawyers, and good lawyers average in the top 10% on the characteristic "skepticism" in personality assessments (see again my article "The Unique Psychological World of Lawyers").

In this case, they should get over it.  Whether Donahue is using structured assessments or more unstructured evaluation techniques, these behavioral and personality evaluations are likely to be the key for law firms and law departments to break their recruitment and retention quandaries and, as icing on the cake, help solve the diversity dilemma.  (See my January 5, 2007 blog entry "KPMG Model Delivers Risk Management, Teamwork, Client Satisfaction and Diversity Too," reporting on KPMG's use of the Birkman Method assessment to revamp its business model and achieve retention and diversity goals.)

This is not a new position, at least for me.  (See my article "The Case for Assessment: Using Discrimination for Better Hiring," which outlines all the uses of assessments in the non-law firm world and how law firms might profit from them.)  And now the tipping point is in sight as more law departments and law firms inch towards greater use of evaluations and assessments-- and trumpet the benefits.

General Counsel Scott Terrillion, of Boehringer Ingelheim Pharmaceuticals Inc, uses an "evaluative selection method" to find the best attorneys for his company, with diversity being a natural consequence.  Roland Dumas, director of diversity for the legal recruiting firm Major, Lindsey & Africa, points out that "if a law firm screens candidates based on what law school they went to and how well they did there, it won't achieve much diversity.  There simply are not enough African-American and Latino law students in the top law schools who would survive the 'top quarter' cut."  Instead, Dumas recommends "capabilities" interviews, which use rich conversations to probe candidates to find those who have the talents the firm values. 

Struggling to complete with bigger firms, Kansas City, Mo.-based Blackwell Sanders developed a system for selecting and assessing associates that is more behaviorally evaluative than most firms use, and it found that using these behavioral evaluations, starting with the initial interview, enabled the firm to spot talent it might otherwise miss. The firm has documented its efforts in a handbook, From Classes to Competencies, Lockstep To Levels, which, according to the foreword by Ida Abbott, is "an act of remarkable candor and leadership ... [that] will enable law firms to expedite the design and implementation of competency-based evaluations and performance-based advancement."

The proof, as they say, is in the pudding.  Blackwell Sanders doubled the total number of minority associates, tripled the number in recent incoming classes, and increased by 22% the number of females associates.  Perhaps even more notable, a "high" minority attrition rate declined to "0" within four years. 

Jeffrey N. Berman, managing partner at Berman Fink Van Horn, says that for the last 10 years his firm has taken an even more radical step--using individually administered psychological assessments as part of their hiring process. Determining assessment traits important to the firm has given the firm "a handle on the type of attorney that is going to be happy and successful here," Berman says.  

The firm tells all prospective hires, lawyers and staff, that they will be required to take a personality test if an offer is made.  Contrary to the fear of many hiring partners, Berman reports that no one has ever objected to the assessment or refused to proceed, in part, he believes, because everyone in the firm has participated and also because it has been so accurate in predicting success.   "It never ceases to amaze me how accurate the testing is," he adds, noting that it has never proved inaccurate with anyone they've hired, even when the results contravene the impression of interviewers.

So diversity is not the only benefit firms can expect from the targeted use of evaluations and assessments--law turnover and high satisfaction and performance result as well. 

Our firm offers law departments and law firms state-of-the-art advice on identifying the characteristics that produce happy, productive lawyers in your environment and designing evaluations and assessments to use in hiring and promoting those candidates.  Don't be left in the backwash.  This is a wave that can do much to move you forward.

 

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According to Steve Davis, it all went pretty smoothly and quickly: negotiations in July and August, a preliminary agreement the last week of August, votes last Wednesday, September 26, and on Monday of this week, he became chairman of Dewey & LeBoeuf, the newest megafirm in the global law firm firmament, with 1300 lawyers, 26 offices in 12 countries, and a billion dollars in revenue.

So what accounts for this dramatically better outcome, compared to the Dewey/Orrick debacle-in-the-making that first hit the press last year this time? 

For starters, Davis credits the two firms’ long-standing familiarity with each other. No East Coast/West Coast mystique to decipher and reconcile in this case: the two firms were only two floors apart at 140 Broadway for years and had dealt with each other on myriad matters. With good relationships long established, people at both firms, Davis contends, “quickly understood the underlying strategic rationale” for a combination. 

Davis also believes Dewey & LeBoeuf enjoys another advantage that other recent megamergers did not. Both Dewey and LeBoeuf had high concentrations of lawyers in the same key markets—New York, London and Washington D.C. That’s an advantage? The beauty of the Dewey/Orrick merger was thought to have been little overlap, promising to produce that far-flung “globalness” instantly. Overlap, Davis contends, works in the firm’s favor. Unlike the “Noah’s Ark” that some combinations are left with—two of everything, with 1 in LA and 1 in Boston--Dewey & LeBoeuf’s geography is more likely to force the people and cultures at each key location to mesh.

D&L's executive committee of 22 is composed of 11 partners from each firm, and includes Morton Pierce, Dewey’s Managing Partner, with Davis in the chairman’s seat. After the Dewey/Orrick talks failed, Pierce’s management style was the subject of some bruising commentary, with particular notice given to the fact that he billed 3300 hours that year. See our February 7, 2007 entry “Talking to the Troops.” 

So what will management at Dewey & LeBoeuf be like? Davis is often described as managing “like a CEO,” a role which, perhaps in a reflection on the famous independence of lawyers, one LeBoeuf partner characterized as an “elected dictator.” 

Continue Reading...

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A grand old firm has gone through a rough patch recently—one of its associates not only sued for sexual orientation harassment and discrimination, but also proceeded to file partnership documents and communications that S&C certainly would prefer to not have circulating publicly. Further, an article in the legal press lampooned a memo S&C sent around to its partners exhorting them, among other things, to say "thank you," in case their mothers had forgotten to instill in them that finer point of social intercourse. The legal blogosphere enjoyed batting that one around.

But S&C may have gotten the last laugh. In the Midlevel Associates Review released last month by The American Lawyer, New York law firms (as defined there to mean firms with more than 45% of their lawyers in New York) were once again roundly denounced, with this year only 7 firms making it into the top half of the 162 firms surveyed. The New York associates registered their dissatisfaction particularly regarding relations with partners, training, communication about what it takes to make partner and openness about firm finances. While New York firms have always performed poorly in these ratings, several firms fell precipitously since last year's survey—Cravath Swaine slid 27 places, Paul Weiss was down 59, Debevoise Plimpton fell 64 slots and Wachtell Lipton plummeted 74 places.

Thumbing its nose at the rest of the straggling New York herd was Sullivan & Cromwell, which vaulted from number 153 on the list up to number 48. 

So now that all the chortling has died down, was it the "thank yous" that worked? Perhaps. But also, for the first time this past year, S&C leaders gave associates a series of briefings about firm finances, business strategy and the road to partnership.  Chairman H. Rodgin Cohen and vice-chair Joseph Shenker, among others, made in-person presentations and took questions. 

On those two most damning survey questions for New York firms, "communication about what it takes to make partner" and "openness about finances," S&C's ratings this year were 3.48 and 3.64 respectively, out of the ballpark compared to their prior year's ratings of 2.14 and 2.13, and even much higher than this year's average New York firms' ratings of 2.59 and 2.94. 

So it looks to me like Mom was right. Talking it out—even those tricky financial matters and partnership issues that several New York firms said, and continue to say, were either too confidential or essentially none of the associates' business—creates rapport, incentive and even, get this, trust in an environment that sorely needs all three. And it does so quickly—with the results showing up in the first survey! 

Mom would be so pleased.

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One of the requirements of the Sarbanes-Oxley rules for publicly traded companies is that they demonstrate that they are promoting an "ethical culture" in the workplace.  What does that mean?

"The Manager's Book of Decencies:  How Small Gestures Build Great Companies" by Steve Harrison, chairman of Woodcliff Lake, N.J.-based Lee Hecht Harrison, the employee outplacement arm of Adecco Human Capital Solutions, a division of Adecco SA of Glattbrugg, Switzerland, is an attempt to answer that question.

Mr. Harrison's contends that an ethical culture is the result of many small, and sometimes large, gestures made over a long period of time, with the driving force coming from the top.

"Being decent isn't about being nice... or spending more money-- it's about treating people fairly," Harrison claims. He also believes that good role models at the top have certain common traits. Those Harrison acknowledges as outstanding role models are Colgate-Palmolive Co. chairman Reuben Mark, Nucor Corp.'s former CEO Kenneth Iverson (who died in 2002), Campbell Soup Co. president and CEO Douglas R. Conant, Southwest Airlines Co. chairman Herbert Kelleher, and Dial Corp.'s former president and CEO, Herbert Baum. 

These five leaders exhibit what Harrison calls a high level of "moral intelligence," which is marked by humility and honesty during both good times and bad.

If employers can pay attention to the issues that matter to their employees, "like finding some kind of fulfillment in the job they come in to day after day...then they're on their way to creating a culture of decency which is critical to attracting, retaining and engaging employees."

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As a woman, a lawyer and a consultant who specializes in emotional intelligence among arguably one of the most challenged professions of our species-- lawyers-- I cringe every time I see articles such as "Brilliant Women Last in Love," published August 18, 2007 in Australia's Herald Sun. The premise-- leave it to self-critical, self-effacing women to propagate it about their own kind-- is that lower long-term marriage statistics for women who are smart, well-educated and/or successful in their work are evidence that these women are more likely than other women to be emotionally deficient in some way.

Of course, demanding work, of whatever kind, can create stress for both genders, including vis-a-vis their partners and families. And so can over-reliance in personal relationships on any professional strength, no matter how valuable that strength may be professionally.  

In addition to those challenges, women have traditionally born the brunt of supporting families-- housework, food preparation, social connections, child and parent care, etc. So those women who also have demanding careers are often more challenged/stressed than their male counterparts, who are more likely to enjoy minimal expectations in these areas.  Compounded stress, as we all know, can wear down even the best of relationships.

However, there is no evidence that professional women are less likely to have good emotional skills than other women or than the men they are working with.  What the research is absolutely clear about, consistent for years, is that married men are the happiest in our population and married women are the LEAST HAPPY, with single women and single men, in that order, in between. 

Therefore, it is just as likely, and I believe probably more likely, that the statistics about smart, successful women and marriage reflect the fact that these women are smart enough to realize and acknowledge the unequal and unhappy role marriage often plays in their lives and are also empowered enough personally, and successful enough financially, to do something about it.  In the process they are likely to propel themselves up from last to second in the "happiness" stakes.

There is ABSOLUTELY NO REASON TO BELIEVE that the less smart, less educated, less successful women are glued to their marriages because they are so happy or so adept at relationship building. The female depression rate, highest among married women, should easily dispense that myth.  Nor is there reason to believe that professional men, less burdened by family obligations and often enjoying the career and personal support of their spouse, are any better equipped to deal with the kinds of stress that professional women cope with. 

I study emotional intelligence in both men and women, using the Myers Salovey Caruso Emotional Intelligence Test (MSCEIT), the only EI assessment that is abilities-based, i.e. does not rely on self-reports ("Why, yes, I am indeed emotionally intelligent.") but rather requires participants to react to scenarios.

The results of that assessment show very little difference (women enjoying a slightly higher average score) in emotional intelligence between the sexes--a result many women find surprising. There are a number of other assessments, however, that show clear gender differences, including the Myers Briggs Type Indicator, which reveals women to be much more likely to base their decisions on what is good for relationships than on logic. 

But emotional intelligence is in fact fairly gender neutral. If the theory of this and other stories is that leading with your head can negatively impact your personal life, it is a problem that bedevils both sexes-- brilliant men ever as likely as brilliant women.

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Behavioral science is not often invoked in the halls of law departments, but maybe it should be.  Two recent articles highlight the importance to a GC's success of understanding why people think and act as they do.

General counsel are in the position of having to reconcile two jobs: being both a business partner in the management of the company's business and the guardian of the company's integrity.  One aspect of their work requires creativity, risk-taking and far-sightedness.  The other requires careful scrutiny of every corporate action in the short and long term for potential regulatory, liability and just plain reputation pitfalls.  Achieving high productivity with high integrity might strain even Superman's talents.

An article in Corporate Counsel by Ben W. Heineman Jr, former GE senior vice president-general counsel, entitled "How GCs Can Avoid Being Caught in the Middle" recites some of the recent scandals that attest to how difficult that balancing act can be:  the fraudulent financial practices at Enron, the pretexting at Hewlett-Packard Corp, and the wave of options backdating.

Perhaps what chilled GCs to the bone most recently were the guilty pleas by Purdue Pharma L.P., its president, GC and former chief medical officer to misleading the public about the drug OxyContin's risk of addiction.  They have agreed to pay a total of $634.5 million in fines.  Rather than relaying focus group concern about potential for abuse, Purdue Pharma gave false information to its sales representatives that the drug was less addictive than other painkillers.

Heineman mentions a number of attributes that can help GCs successfully straddle their two roles.   Vis-a-vis the other corporate managers, the GC must have the ability to stand his/her ground on clear illegalities and to make sure he/she has enough time to assess those situations that are not clear cut.  And GCs must be able to take those stands in the pressure-filled environment of a board meeting where the CEO is likely to be a ferocious skeptic and many board members will side with the CEO.  See our July 18, 2007 entry on Promoting an Effective Board about the importance of personal attributes in good decision-making.

The Texas Lawyer article "It's All in Your Head:  Cognitive Theory Can Help GCs Lead Organizations to Better Decisions" by Michael Maslanka, a managing partner at Ford & Harrison in Dallas, contends that a GC's real power--the ability to influence decisions-- comes from understanding the way people think, which requires tapping into cognitive science.

Maslanka lists a number of biases that people in general and managers specifically can suffer from if they aren't on the alert: 

• The bias that there is only one cause when something bad happens
• The tendency to focus on conclusions and generalities instead of specifics
• Hardwiring that makes it easy to believe accusations and hard to disbelieve them
•  A confirmation bias, which only admits facts that support our beliefs (and further reinforces our belief bias)
• Overreliance on what is first heard
• Resistance to change that can only be overcome with practice, practice, practice

Maslanka encourages GCs to be open to all possibilities and to question rather than dictate.  Heineman also points out the importance of maintaining within the law department a culture that welcomes, even requires, lawyers to raise concerns about financial, legal, ethical or reputational issues.  We refer to this as a "culture of dissent"-- one that invites concerns, follows up on them and does not punish anyone for raising them, but rather praises them.  See our March 16, 2007 entry on the article Handling Conflict and Dissent in Law Practice (and Life).

While it may not be mind reading, being cognitively aware of your own personal attributes and biases, as well as others', can help steer you toward that Superman performance to which all GCs aspire.

 

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Burnishing an image that is bankable is what every professional tries to do--both for him/herself individually and for the profession as well.  Doctors take bed-side manners lessons, the NYPD are being instructed on common courtesies.  What about lawyers?  What do they do to bring out the gold?

From the looks of things, not much.

A Harris Poll annually asks the question “Who would you trust?” about various professions.   Doctors, teachers, scientists, police officers, professors, clergymen and military officers routinely end up at the top of the trust chart, garnering more than 70% of the votes. 

Lawyers are usually found settled at the bottom, where members of Congress, pollsters, trade union leaders and stockbrokers rank above them with 35% or less of the vote. There, in next-to-last place in 2006, lawyers sport 27% trustworthiness, one notch above the bottom-feeding actors, over whom lawyers are able to boast a one percentile advantage.

The recent portrayals of lawyers in mass media are evidence of how low the reputations of lawyers are sinking. Long gone is Perry Mason reassuring the wronged and bringing evildoers to justice.   Last season’s TV series about a lawyer was titled “The Shark,” which pretty much says it all from an image standpoint.  That series has been one-upped by this summer’s arrival of a lawyer drama entitled “Damages,” starring Glenn Close, who will always be remembered as one of our generation’s scariest persona—the man-eating, marriage-dashing, family unfriendly “Fatal Attraction” psycho.  Legal advice, anyone?

Then there are the real-life reports that manage to make these fictional scenarios look reasonable:  the senior partner who throws law books at associates, the criminal defense attorney found naked with an adolescent in the court's conference room, the litigator who admitted to altering documents in a consumer class action, the tax lawyer who bribed IRS officials to accept tax positions, the partner whose language in court was so egregious the head of the firm flew in to apologize. 

Into this combustible scenario comes the question of whether law firms should be able to advertise in mass media, as do other professions, and if so, what they should be able to say. 

The recent back and forth in New York, New Jersey and other states about whether law firms should be allowed to tout their "Super Lawyers" or other commercially recognized stars on their websites, use testimonials from prior or existing clients in their marketing materials, use unidentified actors in their ad campaigns or even send emails that don't clearly identify themselves as "soliciting" are no doubt reflections of the growing role that image marketing is likely to play for lawyers. 

A recent article in the New York Times heralded the arrival of professional-looking canned law firm television commercials that are affordable to "the smaller, more local firms for whom the most important thing is the message to their communities," according to Spot Runner, who is working together with Martindale-Hubbell to market the commercials.  While that approach may benefit a local firm whose clients and potential clients are individuals in the community, as the article notes, it is unlikely to be useful to large corporate firms.  And the unseemly associations with ambulance chasing still prevail.

So, other than mass advertising, how do we burnish our image in this modern era? 

Perhaps in the most old-fashioned of ways:  by building relationships, one at a time.  It does not produce a quick fix or an instant cache.  It takes time-- both immediately and over the long run, so it's not very efficient.  But building individual relationships is effective.

Clients say repeatedly that the quality they most want in their counsel is trustworthiness.  Not just someone who gets the answer right.  Or gets the answer right enough for the price.  But someone who the client can count on to look out for their best interests, provide honest feedback and reliably follow through. 

It's an image worth the investment.

 

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An article by Ronda Muir entitled "The Importance of Emotional Intelligence in Law Firm Partners" appears in the July/August 2007 issue of the ABA Law Practice Management Section's Law Practice Magazine. 

Among the attributes that emotionally intelligent partners bring are better judgment, higher productivity, enhanced business development skills and better client relationship management.  Most importantly, high emotional intelligence fuels the kind of leadership-- one which promotes collaboration and teamwork-- that is critical to excellence in the 21st Century, and that can provide firms with a competitive edge.

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Oddly enough, where it is most needed, Boards and other management groups may be the last frontier for achieving enhanced performance management. 

Historically, the perceived advantages of relying on a managing group, instead of one individual, include access to the group's collective wisdom –"several heads are better than one"–as well as the ability to spread an increasing management workload over a number of people. 

A recent Center for Creative Leadership study identified an additional advantage. Effective management these days requires the resources of several people, rather than the lone hero, in order to meet the global challenges of collaboratively connecting across boundaries of all kinds—geography, language, culture and expertise.

Avoiding "Extreme" Group Decision-Making

Yet there is a well-documented propensity for groups to drift toward "extreme" decisions, that is, a committee often makes a decision that none of the individual members of the committee, acting alone, would make. These group decisions can be extreme by being either extremely risky or extremely conservative, and you see lone Directors routinely disavowing their cohorts’ actions after the fact. There seem to be a number of reasons for this tendency:          

Diffusion of Responsibility. An individual's part in a group's decision evidently weighs less heavily on him/her than an individual decision would, the implication being that not as thorough an evaluation of the issues is made when the decision is attributed to the group.

Ignoring the Lone Voice. Often groups do not properly take into account the most relevant expertise in the room.   Most small groups tend to make decisions based on the information all members share about a topic, overlooking important facts that one or several people bring. Although management committees are usually looking for creative, out-of-the-box strategies, a solitary opinion is often taken lightly or ignored in the flow of debate within the group.

Social Pressure. The more bonded the group, the more committed they are likely to be to reaching a decision, particularly one that pleases most of the members, even if a decision should be delayed or a less pleasing one would in fact be best. 

Competition. When committee members agree on the parameters of an issue, individuals may try to one-up each other by suggesting more and more extreme solutions, then promoting their solution as the best.

Stress. Groups under pressure act very much like individuals under stress, only more so. They often procrastinate, calling for further information, or become committed to bad decisions primarily to protect themselves and each other against criticism. This effect may account for the popular notion that committees tend to "split the baby," resulting in a less controversial solution that does not in fact work very well.

Seeing What Others Say

The impact of psychological factors on group decision making may go even further, to actually alter each person’s perceptions. A study using advanced brain-scanning technology shows that, in effect, group members often in fact see what the group tells them they see. In an exercise involving mentally rotating images of three-dimensional objects to determine if the objects were the same or different, subjects were assured of an incorrect conclusion by confederates and then agreed with those wrong answers 41% of the time. The brain activity of those who went along with the group was markedly different from those who took independent positions. When subjects concurred with wrong answers, activity increased in the area of the brain devoted to spatial awareness, meaning that their actual perceptions were being influenced. Those who made independent judgments showed activity in the region of the brain associated with conflict management, signifying an emotional toll for going against the group's perception.

Based on the results of this study, one of the potential major advantages of a group decision—"several heads are better than one"—can disappear if the group successfully, even if unintentionally, co-opts individual insights. The most problematic aspect of these results is that not only does the group lose the "lone voices," but also the lone voices lose their very awareness of their differing perspectives. The change in their perception makes them incapable of raising their idiosyncratic flags.

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Why Feedback?

Effective leadership in lawyers is achieved by using some of the same strategies that work with other high-performing professionals, while also requiring an appreciation of the nuances that are particular to the legal personality.  Awareness is the standard starting point for most leadership assessment and improvement programs.  Studies have clearly shown that the higher your self-awareness, the better a manager and performer you are, and, as an added carrot, the more you actually enjoy your work. 

Unfortunately, studies also clearly show that the higher you rise in the ranks of an organization, the less likely you are to be accurately aware of your impact.  Thus, oddly enough, in any given business the CEO is probably less informed about how she and her work are perceived by her colleagues--below, across and above her-- than is the night typist.  This turn of events is often attributed to the fact that the higher up most organizations one goes, the less systematic, extensive and honest is the feedback. 

Feedback and Lawyer-Leaders

Lawyers, and certainly general counsels and firm partners, often function like the CEOs of their own small businesses, and therefore risk suffering from that same top-of-the-heap lack of awareness that other senior management executives experience.  As to the younger lawyers, while run-of-the-mill annual associate reviews are often standard, most of these reviews are still not successful in effectively giving meaningful feedback . And once those lawyers become senior managers or partners themselves, there is usually no system at all for them to get feedback-- from the associates who work for them, from other partners or senior managers or from clients. 

There are well-established ways to produce effective feedback in an organization: professional assessments of individual working styles using Myers-Briggs and other testing instruments, regular feedback-targeted personal reviews, mentoring programs that include in-depth feedback, and department, practice group or firm-wide meetings or retreats. Bottom-up (from associates) and cross (from other partners or colleagues) reviews are recent additions to the array of law firm/law department feedback systems that try to provide senior lawyers with that critical awareness.  Other tools are practice group, partnership and client surveys, particularly if the surveys are followed up with face-to-face discussions. 

Unfortunately, giving and receiving written and person-to-person feedback strikes many lawyers as bordering on, if not squarely in, the realm of useless touchy/feely psycho-babble. Yet it is a skill that should come easily to lawyers.  Rigorous analysis and clear communication, particularly in identifying issues and crafting resolutions, are the stock-in-trade of what we do.  Why then is it that lawyers so resist using these potentially powerful tools in their own practices?

Feedback and the Half-Empty Glass

The wrinkle here may well lie in other personality attributes that lawyers often possess.  First, as a group, lawyers score high on resistance to feedback-- they get defensive and don't listen, or lash out with their point-by-point answers.  Part of this response derives no doubt from years of advocacy thinking-- every point deserves a good counter-point.  The high esteem that lawyers tend to hold themselves in-- another trait that serves them well when under attack from opposing counsel-- also feeds the inability to hear "criticism." 

A further attribute that may well contribute to lawyers' disinterest in feedback is their inherent pessimism. Martin Seligman, a University of Pennsylvania psychology professor who has been a leader in the development of the field of positive psychology over the last ten years, identified lawyers, in a survey of 104 careers, as the most pessimistic.  While researchers can argue whether that attribute makes lawyers likely to be more or less accurate in their assessments of legal situations, it does make them, as a group, more resistant to "new" policies or procedures, and more likely to think that remedial steps are of dubious value. 

"Peanuts" and You:  Cashing in on a Valuable Commodity

I was recently in the student center of a large suburban high school.  In a deja vu from a "Peanuts" cartoon strip, a teenage boy sat behind a hand-written sign that said "5 cents -- I'll tell you what I think of you."  Beside the sign was a very large pile of nickels.  An enterprising kid was demonstrating what a valuable commodity honest feedback is. 

Lawyers have the skills and the opportunity to cash in on that valuable commodity.  As lawyers, we can begin our leadership effectiveness program right there:  by simply learning something about ourselves, we can start accessing a whole new array of potentially useful tools for enhancing our practices and our lives. 

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Ronda Muir, Senior Consultant, led a two and a half day retreat at the end of May for UNICEF's 22-person Armenia office to help them better serve the country's children.  She was engaged to improve teamwork, communication and conflict resolution and to assist in the office's preparation for upcoming reviews and its transitioning to potential structural and policy changes. 

Through the use of individual and team MBTI work style reports, personal conflict style assessments, emotional intelligence tests and a confidential office-wide survey, Muir assisted the team in identifying personal and office strengths and challenges and in determining strategies for improved communication, conflict management and change management.

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Should lawyers “do the right thing” in addition to “being right”?  A favorite cartoon depicts two lawyers at a desk evidently discussing strategy. One lawyer says to the other: “Is it right?… Is it fair?  Get a grip, Carlton—we’re a law firm!”

Integrity

In an interesting study issued recently, the Consortium for Research on Emotional Intelligence found that financial advisors who demonstrated high levels of “moral and emotional competency” nearly doubled the S&P 500 return on their client portfolios in the years 2001 through 2004, delivering an average return of 25%. 

Of the various attributes studied, integrity had the single strongest impact on client returns. “Results showed that Integrity was the key behavioral competency which predicted the most positive returns for clients." 

Integrity was defined as acting consistently with what one says is important, in other words “walking the talk.”  An example was an advisor willing to give up a lucrative client rather than compromise his/her principles, such as ultimately recommending that a client seek advice from another advisor because the advisor could not in good conscience implement a plan believed to put the client at significant financial risk.

Ethics

In the process of updating his 1996 book The Honest Hour: The Ethics of Time-Based Billing by Attorneys, William George Ross determined that lawyers in 2007 are significantly more likely than a decade ago to pad their bills with unnecessary hours or bill two clients for the same time. Almost 55% (up from 40%) of associates and partners surveyed report performing unnecessary work, and 35% (up from 23%) say they bill two clients for the same time. The number of lawyers who believe double billing is ethical also rose from 35% in 1996 to 48%, and more than two-thirds of lawyers say they have specific knowledge of bill-padding by others.   

Morals

In a May 2, 2007 Law.com article entitled “From Moral Partners to a Moral Firm”, Gregory S. Gallopoulos, the managing partner of Jenner & Block, suggests that the integrated enterprise model that many successful law firms are adopting now, in which strategy and vision belong to the entity as a whole rather than to individual partners, risks producing a vacuum in the area of firm morals. 

Continue Reading...

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Ronda Muir, Senior Consultant, has been asked by UNICEF's Armenia office to lead a two and a half day retreat at the end of May to help improve teamwork, communication and conflict resolution. Through the use of individual and team MBTI reports and emotional intelligence assessments, Muir will help the team identify personal and office strengths and challenges and determine strategies for improved communication and conflict management in order to better serve the country's children.

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Give yourself the advantages that insights from sophisticated behavioral science tools and informed collaboration can produce.  Out of ideas for how to motivate your team?  Can't take another day with a difficult boss or colleague?  Strung out from too many committments and not enough time?  Looking for a meaningful way to both practice law and live your life?

Achieve improvements in your professional and personal life, including progress in leadership and management skills, work/life balance, conflict management, business development and time and resources management. 

Our experienced lawyer coaches use their expertise and assessments to give you the tools to maximize your strengths, raise your emotional intelligence and social IQ, as well as benefit your bottom-line results.  You choose the program that best suits your needs and schedule.

For further information, contact RMuir@RobinRolfeResources.com. 

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Ronda Muir, Esq., Senior Consultant at Robin Rolfe Resources, was featured as a speaker at a conference on Risk Management for the Modern Law Firm, sponsored by ARK Group. The conference was held in Chicago on April 17 and 18, 2007. 

Muir's presentation was on the risks that arise in managing a law firm's greatest asset: its people. She pointed out the ways in which lawyers are different from all other professionals, the challenges and risks that those differences pose to management, and how to use those differences to make good lawyers better. 

Participants raved:

• "Innovative, new information!"
• "Excellent, new material of real value.  I would love even more detail and time on this topic."
• "Great presentation!" 
• "Great speaker!  Knowledgeable and forward thinking."

ARK Group also lauded Muir's participation: "Your involvement was pivotal to the success of the program… and brought a fresh perspective to the agenda."  

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Ronda Muir, Esq., Senior Consultant at Robin Rolfe Resources, conducted a seminar on April 10 for Yale Law School students on the economics of law firm practice and how associates can add to the bottom line.  Over 40 students, in a law school of 180, signed up for Muir's presentation.

In this highly competitive legal market, associates benefit from understanding the history and underlying financial considerations that shape law practices and their policies, and how to quickly become a productive contributor to their firms' financial success.  

Yale Law School has long been a pioneer in innovative programming and was acknowledged in the Carnegie Foundation's Advancement of Teaching two-year study of the North American legal education system, published in 2006, as one of only three law schools offering a balanced curriculum.

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Women lawyers are not serving in appropriate numbers on corporate boards, bemoans an April 6, 2007 article in the New York Times Business Section.  Evidently only 14.6% of Fortune 500 companies counted a woman among their directors in 2006.

That same year women accounted for 17% of law firm partners (presumably equity partners), 16% of law school deans, 14% of chief legal officers at the Fortune 500 companies, and only 7 of the Fortune 500 CEOs.  So even though some of these statistics are arguably comparing apples and oranges, that board participation percentage doesn't look so out of whack with the rest of US business.

The thrust of the article is that due to the "shortage of qualified candidates for directors," it is a good time for women lawyers to spruce up their board skills, which should include, evidently, how to deal with an "overbearing, pompous and unctuous C.E.O" who rules by intimidation.

Over a year ago there was a well-publicized study finding that the more intelligent (actually, educated) a woman in the US is, the less likely she is to be married.  In response to that study, reporters across the country exerted themselves by castigating those men for not taking smart women as their wives. 

No one interpreted the data to mean that the smarter the woman, the less likely she is to agree to enter into that particular union.

The Times' take on these board room statistics has that same one-sided press spin.  Yes, women could and probably should play a more visible and pervasive role in corporate management, and yes, women lawyers are as smart as those other guys.

But any lawyer with their eyes open over the last few years has seen the publicity, economic and/or legal debacles that perfectly respectable, financially successful corporations have walked into.  From Enron to Morgan Stanley to Hewlett Packard, boards have been unveiled as little more than back-scratching yes men (by a very large margin, we now see) happily unfamiliar with what goes into the sausage, their major qualification for board membership often suspiciously looking like their golf handicap.  

We also all know that Sarbanes-Oxley was passed primarily to get board members such as these to put their John Henrys on many a line that they would much rather not, and for the express purpose to make them personally liable--financially and sometimes also criminally-- for whatever fallout later occurs. 

So yes, there are a "shortage of qualified candidates."  But is this one of those times when being smart means knowing when to say no?

As Marlene Alva, recently retired from Davis Polk, pointed out:  "It is a big-time commitment, and it's liability-fraught...Lawyers are in a better position than others to judge the perils." 

Precisely.

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An extraordinary and convincing vision of a revolution in big law's future was presented by Mark Chandler, SVP and General Counsel of Cisco, in a speech in January at Northwestern School of Law's 34th Annual Securities Regulation Institute.  I would like to join other legal commentators in paraphrasing Chandler's comments and commending him on his far-sightedness.

Driven as are other GCs to realize productivity improvements in his department, Chandler is committed to reducing Cisco's legal expenses as Cisco gets bigger.  Chandler points out that information, a law firm's stock in trade, will only get easier, and therefore cheaper, to access over time.  Already standardized on-line legal data is available, with residential leases and individual tax returns now largely done by software.

But even Cisco's first tier corporate legal work is being drilled down to a cost-effective, accessible product.  Contracts are drafted, executed and archived by employees using on-line software. Cisco pays a fixed fee for patent prosecution and intends to pay at least 5% less each year, requiring its firms to find ways to lower costs.  It also pays a fixed fee for the review of license offers, which Baker & Botts has been able to make profitable by developing a more efficient systematic approach.   In the corporate secretarial area, Cisco has replaced a group of outside firms with a one-firm solution that aims for a 20% reduction in legal expenses in part by using standardized forms and open interfaces. 

In litigation, Cisco has a fixed fee arrangement with Morgan Lewis to manage all of its US commercial litigation, which has made litigation avoidance the firm's key goal, aligning perfectly with Cisco's interest.

Counseling will be the next frontier, Chandler believes, as online tools like tax counseling via www.taxalmanac spread to other legal areas, such as export regulations, human resources and employment and eventually securities law compliance.  Cisco is already working with eight other Fortune 500 companies and a number of law firms on a site called Legal On Ramp to allow direct access to search law firms' knowledge management systems.  See www.legalonramp.com.

And in each instance, what was novel in Cisco's legal management strategies five years ago has become more commonplace among its peers today and may well eventually become available for purchase as packaged software.

The current law firm business model, according to Chandler, reflects a fundamental misalignment of interest between clients who are driven to manage expenses and law firms compensated by the hour.  Clients are not in the market of buying time, he points out, but value.  The current system not only mis-serves clients, but also the lawyers themselves, particularly associates, who Chandler says are beating down his doors because they don't want to work for law firms any more--enslaved by a billable hour-based compensation system that is inefficient in producing a valuable product and that offers them little chance of making partner.

Chandler recognizes that law firms are currently profitable as structured.  Clay Christensen of Harvard Business School calls large American law firms "the most profitable businesses in the world.  Speedier information-gathering capabilities allow large law firms to increase utilization of less experienced lawyers without passing cost savings on to their customers."  But Chandler is convinced that the very source of success for firms today--the ability to control client access to expertise, requiring 1:1 delivery--will be the source of their failure in the future.  It is top quality boutiques that Chandler is betting will change and survive, and it is in Cisco's interest to help make them profitable while doing so.  Chandler views slower-moving, cost-heavy large centralized firms to be at risk. 

"If the economic system of law firms is frustrating to associates and even some partners, I can tell you that from the standpoint of a metric driven general counsel, it is more than incomprehensible.  It looks like the last vestige of the medieval guild system to survive into the 21st century."

 

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Ronda Muir has been asked by Yale Law School to conduct a seminar in April for law students on the economics of law firm practice and how associates can add to the bottom line. 

In the highly competitive legal market, associates benefit from understanding the underlying financial considerations that shape law practices and their policies, and how to quickly become a productive contributor to their firms' financial success.  

Yale Law School was acknowledged in the Carnegie Foundation's Advancement of Teaching two-year study of the North American legal education system, published in 2006, as one of only three law schools offering a balanced curriculum.

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A number of corporations are taking steps to restrict which of the associates at their outside firms work for them, according to the Managing Outside Counsel Survey Report prepared by the Association of Corporate Counsel and Serengeti Law of Bellevue, Washington in late 2006.  In some cases, corporations specify that only attorneys with at least five years of experience be assigned to their matters.

Given the billable-hour fee structure that most firms retain, if such requests become a trend, it could play havoc with the traditional law firm business model. Currently, firms hire three times or more the number of associates that the firm expects to stay, immediately putting those young associates on clients matters in order to push down less complicated work, provide training and make a proving ground to determine who should stay and who shouldn't.  OK, let's admit it:  and also maybe sometimes to plump up some of those thinner bills.

If clients start demanding only more senior lawyers on their matters, the high cost of young associates would immediately become much higher, since it would be even longer before they could reasonably be expected to produce a return on the firm's investment in them.

Of course, one way to counter such a trend would be to use a more carefully calibrated hiring process that relies less on "where ever the outstanding offer chips may fall," and more on knowing the best fit for the firm.  We at RRR advocate the use of culture and personal style inventories as a way to fully understand your firm's prevailing attitudes, values and attributes and also to identify the areas where it needs to grow or broaden.  

Aggressively pursuing those candidates who meet that profile not only results in spot-on hires more likely to contribute from day one, but also produces a mountain of "I'm special-- you really-really-like-me" feelings in your incoming class that could make even Sally Field shed a tear, and also produce the kind of we're-made-for-each-other associate loyalty that not many firms currently enjoy.

Targeted hiring should then be followed by an equally targeted training program of the sort that few firms currently offer.   Information gleaned from the inventories would make this training much more efficient, so as not to necessarily require more time.   We at RRR also offer targeted associate training in the areas of understanding the business of law, professional performance and career development, business development, client relationship management and communication, among others.   

Together, these two strategies--targeted hiring and targeting training-- are likely to produce young lawyers who are valuable to clients and profitable to their firm.

 

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The legal industry's current strategy for hiring and keeping lawyers seems to be to throw more and more money at them, a strategy which has succeeded to date in producing unprecedented attrition and dissatisfaction rates.

Major law firms around the country just upped the ante for hiring a baby lawyer to $160,000 @ year, before bonuses, or roughly what seasoned federal judges in our country make.

Why more money?

Jack Nusbaum, Chairman of Willkie Farr & Gallagher, says "We expect our associates to work hard… maybe this will make them feel better about the Saturdays and Sundays."  

Has anyone taken note of the American Bar Association survey conducted just this past November?   Of the 2,377 respondents (most of whom were between 26 and 35 and had been practicing law for five years or less), 84.2 percent said they'd prefer to work fewer hours for less money.  More than 30 percent would like to work 20 percent less and said they'd give up between 25 and 30 percent of their pay in exchange.  The next largest group-- 27.8%--would settle for a 10% cut in hours.  Did you get that?  Associates would prefer to give up proportionally more money for incrementally less work.

So are we paying these high salaries--surprise!--for the clients? To show them that our firm can attract the best players?  

"When I saw the announcement about the raises, I said ‘Oh God,” says Michael Roster, executive vice president of World Savings, a subsidiary of Wachovia Corp.  But maybe not for the reasons you would expect.  Salary raises mean law firms will put more pressure on associates to bill, but paying more for legal services, Roster says, is less bothersome to him than associate turnover.  He says he and other general counsel prefer to work with associates with whom he has a history and who know his business well.  "It hurts when firms can’t keep qualified people.”

“From my standpoint, I would view [lowering billable hour requirements] as a creative and enlightened way to reduce associate turnover and keep the best and brightest young lawyers,” says Barry Nagler, who chaired in 2006 the Association of Corporate Counsel’s board of directors.

Susan C. Robinson, associate dean for career services at Stanford Law School, also thinks that lowering billable-hour requirements could be a great recruiting tool, particularly for attracting lateral associates.

There is no question that firms are struggling with the phenomenon of associates not wanting to work as hard as generations past.  Many studies indicate, in fact, that partners often bill more hours than their associates, turning the law firm pyramid model topsy-turvy. 

And attracting and retaining associates over the next decade may be even harder. The standard characterization of “millennials”—those who graduated from high school after 2000 and will be graduating from law school starting in 2008--is that they are unwilling to compromise life and family for work.

The obvious hit from reducing billable hour requirements would be to partners' bottom lines.  See our upcoming entry "The End of Profitability as We Know It?"  But there are some countervailing tactics that can help improve profitability.  Ida O. Abbott, former partner at Heller Ehrman White and McAuliffe, contends that billable-hour requirements could be lowered without cutting partner profits if the change involved more planning and better management.  And law firms have not yet even begun to explore the types of management strategies that have produced the super-sized profits recounted in the newly released Firms of Endearment: How World-Class Companies Profit from Passion and Purpose by Rajendra Sisodia, David Wolfe and Jagdish N. Sheth.  See our January 31, 2007 entry "Firms of Endearment."

Steve Susman, whose 85-lawyer Houston/New York litigation firm Susman Godfrey gave 2006 associate bonuses of up to $125,000, contends that "Any lawyer who is unhappy with their compensation should check into a mental institution."

Based on the adage about the mental state of people who keep doing the same thing but expecting a different result, there may be a few managing partners who should be joining those associates there.

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The Center for Work-Life Policy’s latest research, titled “Extreme Jobs: The Dangerous Allure of the 70-Hour Workweek,” published in the December 2006 Harvard Business Review, reports that 35% of high earners work more than 60 hours a week and 10 percent work more than 80 hours a week.  Their conclusion is that 20% of high earners in the US have “extreme” jobs, that is: 60 hours or more of work a week that often includes unpredictable work flow, tight deadlines, work events outside of regular work hours, availability to clients 24/7 and/or a large amount of travel, among other things. And 48% of extreme workers say they’re working an average of 16.6 hours more per week than they did five hours ago.

Sound familiar?

The reasons for such long hours?  Among the external drivers: globalization and the round-the-clock availability it requires; vastly improved technology, allowing same-day delivery everywhere around the world; enhanced communication; increasing competition; and decreasing job security.  Among the internal motivators: stimulating work, high quality colleagues, high compensation, power and status.

Sound familiar?

Noted were the sacrifices that these schedules require in personal and family life.  More than two-thirds (2/3) do not get enough sleep, half don’t get enough exercise, and a significant number use alcohol, drugs, or food to alleviate their stress.  The sleep deprivation alone can work havoc on professional and personal lives:  a week of sleeping 4-5 hours a night induces an impairment equivalent to a blood alcohol level of .1%, which is legally equal to being drunk.  Forty-two percent (42%) of extreme workers take 10 or fewer vacation days a year and more than half regularly cancel vacations. This in spite of data that shows that regularly taking vacations lowers the risk of death by nearly 20% among men between the ages of 35 and 57, often your most valuable age-range.

More than half say their sex lives have suffered; and nearly half say their work has interfered with their ability to have a strong relationship. According to the report, it is physically impossible to have a meaningful conversation with your significant other after a 12-hour work day.  The American Academy of Matrimonial Lawyers identifies a preoccupation with work as one of the top four causes of divorce. 

Extreme workers also note the negative impact their work has on their children.  The study pointed out that women, 20% of the extreme workers, are more likely to feel personal responsibility for these down-sides, particularly with respect to their children  Three-quarters (3/4) of the women said their work interfered with their ability to maintain their homes (66% of men said the same thing),and 57% of women (and 48% of the men) do not want to continue their work pace for more than one year.

The part that doesn’t sound familiar is that two-thirds (2/3) of high earners in a range of professions and three-quarters (3/4) of top managers in multinational corporations say they love their jobs. “The big surprise of the data was just how much these extreme professionals love their work,” said Sylvia Ann Hewlett, president and founder of the Center.

Surprise, indeed.

Many doctors, lawyers and candlestick manufacturers may fall into the extreme category based on many of these standards but one thing is for sure:  loving their jobs is not usually part of the extreme lawyer package.  Attrition rates and simple "expressed dissatisfaction"--whether in surveys or on-line-- that have reached astronomical levels attest to that. 

The take-home is that we can not blame the hours alone on lawyer dissatisfaction.  There could be such a thing as an extreme lawyer who loves his/her job.  And there are steps that can be taken to move your extreme lawyers towards that happier (and ultimately more profitable) place.  Are you taking them?

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One difference in Dewey and Orrick, and perhaps the biggest one, that may lie behind their inability to get in bed together is their management structures. Adhering to the old school, white-shoe model, Dewey management is accomplished by a rotating "good lawyer" who is engaged primarily in what (s)he wants to do and, one might argue, does best—lawyering. According to a January 22, 2007 Wall Street Journal article, Dewey Managing Partner Morton Pierce spent 3,300 hours last year on billable client work, or an average of 12.6 hours every weekday, raising the obvious question of how much time, if any, he spent on management. "Management is not my passion," Pierce admitted. 

Orrick, on the other hand, is managed by Ralph Baxter, Jr., who hasn't practiced law since 1992, and who spends his annual 3,300 hours-plus on firm-wide town-hall meetings, informational web casts, and on-site and in-person office and partner meetings, exhibiting what David Wilkins, director of Harvard Law School's Program on the Legal Profession, calls "the epitome of 21^st century law-firm leadership." 

While those in academia may have easily come to that conclusion, in the industry trenches what constitutes the best firm leadership is still very much open to debate. There are plenty of issues raised by the 3-5 year rotating model vs. the long-term model, including the impact on long-term vision and strategy and succession planning, that we won’t go into here. But the even narrower discussion about whether firms should have full-time or part-time managers, regardless of their length of tenure, can start to sound positively moral, with both sides claiming rectitude. 

The word that crops up is "professional." One of the Dewey partners supports the part-time manager concept because someone "who practices is more tuned into the professional philosophy." And if that's not clear, Cravath's managing partner, Evan Chesler, also a part-timer, points out that "the law is a profession—not merely a business." (Note the "merely.") 

Of course, managing partners who enjoy only short terms would be foolish to give up their clients and cutting edge expertise for what might be a short round in management hell. Their “professionalism” is another word for survival. On the other hand, they are right that lawyers respect no one as much as another lawyer: what managers lack in management skills they may be able to make up for with sheer lawyer-to-lawyer hubris: my book beats your book.

Continue Reading...

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A recent study conducted by the Center for Creative Leadership found that effective leadership has changed over the last five years. Eighty-four percent (84%) of those polled said leaders today are valued for collaboration skills, such as building and mending relationships, rather than solitary heroics, the standard five years ago. Specifically important is being able to "enhance co-worker relationships." This change is due, according to those surveyed, to the more far-flung demands of leadership, which often go beyond an individual's capability, creating a need to work interdependently with others across boundaries—geographic, language, cultural, and expertise.

Law firm and law departments would do well to take note of this study-- "leader" is often a designation born out of unrelated circumstances-- a lawyer has extra time, was good at revenue production so will maybe be good at this too, or is simply senior, none of which relates to his or her ability to build a collaborative organization that supports individuals and teams. 

In a recent interview, Daniel Goleman, author of Emotional Intelligence: Why It Can Matter More than IQ and more recently Social Intelligence, commented on the error many make in choosing leadership:  "Too many organizations are rather naive about the ingredients of leadership and make the classic mistake of assuming that someone who is an outstanding individual contributor would therefore be an outstanding leader. If they're an outstanding individual contributor, keep them as an individual contributor. Give them a raise," he says emphatically.

This study brings that point home in spades.

 

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The Carnegie Foundation for the Advancement of Teaching summarizes its two-year study of the North American legal education system by concluding that "law school provides the beginning, not the full development, of students' professional competence and identity.  At present, what most students get as a beginning is insufficient."

The report recommends "a dynamic curriculum that moves [students] back and forth between understanding and enactment, experience and analysis," integrating traditional classes with clinical approaches to legal education.  Yale Law School, City University of New York School of Law and NYU were recognized for having balanced curricula.

Given the recent changes in a number of law schools' curricula, one commentator asked whether this "problem" wasn't already on its way to being solved.  Others asked why the Foundation had not addressed the perennial questions of improved ethics and relationship training and whether law school could be shortened to two years.

In an essay in the January 8, 2007 edition of the National Law Journal, Stephen J. Friedman, dean of Pace University School of Law, and formerly commissioner of the SEC, general counsel of The Equitable and E.F. Hutton, and co-chairman of the corporate department at Debevoise & Plimpton, finds law graduates to be "ill-equipped to be effective beginning lawyers" and wants curriculum at law schools to be "more purposeful, more focused and more integrated."  He notes that rising legal fees discourage over-the-shoulder training and rising salaries push young lawyers towards early specialization in order to be more productive.  He advocates a third year of broad and interrelated training that heps students learn how to function, as well as think, like lawyers.

Shortening law school to two years would produce a larger number of graduates to feed the maws of Wall Street and perhaps reduce tensions in the retention wars.  But more "personal relations" and "client management" types of course targeted to raising the emotional intelligence and relationship skills of law graduates would be the most direct and dramatic route to both increased attorney productivity and increased attorney and client satisfaction. 

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The 100 Best Employers

From over 400 organizations surveyed, five law firms, down one from last year and with most of the survivors heading down the list, made Fortune magazine’s 2007 list of the best 100 employers to work for: Alston & Bird, Arnold & Porter, Nixon Peabody, Perkins Coie and Bingham McCutchen, with Morrison & Foerster having dropped off.

The list is based on two criteria: an evaluation of the policies and culture of each organization, and the opinions of the employees, which is given more weight. Two-thirds of the total score comes from responses to a 57-question survey, on attitudes towards management, job satisfaction, and camaraderie, sent to at least 400 employees from each company. The remaining one-third of the score is based on demographic makeup, pay and benefits programs, and culture.

It's a tough competition, with No. 1-rated Google providing employees free gourmet meals, a swimming spa and free doctors on site.

But apart from offering outsized bennies, there are some lessons Google may be able to offer us legals.

Hiring for the Right Reasons

Google has doubled the number of employees in each of the last three years, and now with 10,000 employees, expects to double in size again this year, resulting in about 200 hires a week. It also enjoys an attrition rate of 4%, low by Silicon Valley standards. Historically, much like law firms, Google has relied on grade requirements and interviews to make hiring decisions. The challenge is to continue to find valuable employees at such an astounding rate of growth.

A recent review of over 2 million data points made it clear that Google's hiring criteria were not necessarily correlated with success at the company. So Google has revamped its hiring process, using assessments of existing personnel to produce a more quantitative measurement of success in terms of skills, intelligence, personality and integrity. All incoming applicants will now take a personal survey, which Google is already finding produces better matches for its work and culture.

Lessons for Law Firms

Law firms with spiraling growth requirements are competing to hire from the same number of law graduates with good grades from the same number of top-rung law schools as 20 years ago. The lesson from Google, the best company to work for and possibly the hiringest company as well, is that grades and an interview don't do it anymore. Now is the time to identify your real indicators of success and hire candidates with those.

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In a study conducted last fall of managing partners, general counsel, and other legal leaders, Altman Weil identified five key market trends and critical concerns.  It noted that people management was one of the highest priorities on everyone's list, with one partner saying that he goes to sleep "never knowing who might be leaving tomorrow."  The limited pool of quality law graduates, the "free-agent mentality" of lawyers from new associates to rainmakers, Gen-Xers emphasizing work-life balance and achieving diversity were all cited as challenges to people management by this august group. 

To my mind, the other four critical areas identified-- growth, competition, client service and even pricing-- are also each dependent on achieving effective people management.  Growth requires wrestling with "cultural, office and practice integration," competition is felt most dramatically in the "war for talent," with quality people, superior client service skills and strong training and development programs giving firms the competitive edge.   Client service requires superior communication and relationship, among other, skills, and "improved project staffing." (See our entry today on KPMG's success with their staffing model.)  Even pricing is acknowledged as a function of the quality of a firm's work and service-- which general counsel have consistently linked to people skills.  (See our entries Do You Know Why You Were Fired? dated November 8, 2005 and Companies Unhappy with Their Law Firms dated December 20, 2006.)

So why do law firms and law departments not take advantage of the extensive body of expertise available on hiring, retaining, developing and motivating people?  Maybe, as David Maister has suggested, it is the herd instinct that keeps them from going for the glory-- rather go down as a group than risk a "new-fangled" approach.  Interestingly enough, that is what our psychological profiles of lawyers tell us-- that they are risk-averse, often low in resilience, optimism, and emotional intelligence, all of which has helped mire them in an 18th-century business model. 

Here's the question-- which firms will be the real leaders, the ones who actually take the out-of-the-legal-box steps toward addressing these critical people management areas?  Because there seems to be a consensus that that is the only effective way forward.

 

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Accounting firms have long been ahead of law firms in innovative management strategies for personal service firms-- and as law firms head toward numbering thousands instead of hundreds of lawyers, there is much we can learn from how accounting firms manage people.

At a two-day ARK Group conference in December on Women in Professional Service Firms, Sandra Bushby, KPMG's national director of Women's Initiatives and other Workplace Solutions, recounted how KPMG uses workstyle assessments, particularly the "color-coded" Birkman Method, to put together successful client and project teams.  The firm-wide assessments were undertaken primarily as a risk management strategy-- to build teams that have the varied talents to insure that everything from technical details to interpersonal skills to long-term visionary considerations are fully dealt with.  But by balancing teams with accountants with red, green, yellow and blue workstyles, KPMG is finding that it is also achieving an unexpected bonus:solving the diversity puzzle-- creating culturally, gender and racially diverse teams.

Law firms, whether big or small, have a world of insight available to them from the use of assessments, which they often do not take advantage of.  Lawyers will contend that law is too "technical" or "expert' a service for personal or work styles to have any impact on success.  Yet accounting is no less technical, and accounting firms have had to become expert in drilling down to the most effective risk management tools available-- which style assessments unquestionably are.  To have the additional bonus of effectively producing diverse teams without resorting to "affirmative action" add-ons is ground-breaking-- a one-assessment-for-all-purposes bonanza.

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The Board of Law Examiners proposed increasing the passing score on the New York bar exam from 660 to 675 in 5-point intervals, the first of which was instituted in July 2005 with the next two increments scheduled for the following two summers.  Those have been delayed and the National Conference of Bar Examiners has issued a 155-page report on the diversity impact of that proposal.  If the full 15-point increase were instituted (which is significantly less than the 33 point increase initially considered), fully half of all African-Americans would fail the exam--up over 8% from the prior fail rate.  The impact on other races would also be significant--an additional 5% of Hispanics, 6% of Asians and 10% of Puerto Ricans would fail, but their total pass rates would in each case remain over 65%.  Only the African-American pass rate would fall below 50%. 

This data corresponds interestingly with the study conducted by Professor Sander at the University of California, Los Angeles, which has generated fierce debate.  Sander's provocative study concludes that a major reason blacks are not as well represented among law firm partners as they are among new associates is that they have much lower average grades than their cohorts.  Sander also indicts the law schools for admitting blacks who are not prepared enough to do well at law schools.  Very few blacks graduate from the top 30 law schools with high grades.  While blacks make up 1-2% of law students with grades in the top half of their class, they make up 8% of corporate law firm hires, yet they are one-fourth as likely to make partner, and they leave large firms at 2-3 times the rate of white associates.  An interesting fact is that blacks have a much better shot at partnership at smaller firms, which are less likely to hire associates with lower than standard grades.

Some commentators have questioned the importance of grades (women lawyers have higher grades than men but are also under-represented as partners), others have attributed the fallout to a lack of mentoring or training, or to the fierce competition for able blacks, who are often hired away by clients, while still others contend that the big firm hiring practice sets blacks up for failure, reinforcing stereotypes on the way.

The importance of the two studies converge, particularly for New York law firms, if raising the bar pass rate further reduces the number of eligible black associates that firms can choose from.  Will those reduced numbers make prestigious firms lower their grade standards even further, with the implication that retention rates may drop even lower?

There is no question that any firm solving the diversity puzzle reaps a hiring, marketing and productivity bonanza.  Successfully hiring and integrating blacks, as well as other minorities, including women, requires that a firm understand its own and its associates' cultural strengths and biases, have an active, long-term integration program that addresses each specific attorney and his/her goals, and honestly, consistently and regularly evaluate its own progress.

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Between 1986 and 2005, the number of lawyers employed by the nation’s 100 largest law firms nearly tripled, from roughly 25,000 to more than 70,000, and the most recent report is that the Am Law 100 gained 4% in numbers of lawyers this past year. During this time the number of top students at top law schools has not increased measurably.

In the last two years, firm attrition rates have gone up dramatically. According to NALP reports, in 2003 53% of fifth-year associates had changed firms. In 2005, that percentage rose to 78%, more than three-fourths of associates, and 81% for women of color. According to The American Lawyer, in 2005 2,429 partners left their firms for other attorney jobs, compared with 2,081 in 2004, up more than 20%.

More and more law firms are trying to land a limited number of top-tier associates, who will, once bagged, nonetheless leave their firms—most while still associates, but others as partners. Therein lies the recruiting challenge.

Some firms are looking to alums to fatten their recruiting pool. On October 16 2006, The National Law Journal highlighted how firms are working harder to maintain ties to alums, sometimes succeeding in bringing that talent back to the firm. Vinson & Elkins partner Veronica Lewis, who left to go in-house for more flexibility, was courted personally by V&E’s managing partner, and returned as a partner after 18 months. Gibson Dunn was cited as viewing rehires as a growing component of its recruiting program. 

The National Law Journal’s Sept 25, 2006 special section on the Business of Law included a lead article on the hunt for talent. It suggests that top students at less prestigious schools be carefully considered and that summer programs should more accurately reflect real legal practice, both to educate the associate and to test the students’ interest in and commitment to the practice of law. Third, it advocates that firms “integrate, integrate” to bolster retention generally and diversity specifically. However, the assertion that attorneys envision their law firm as not merely a job, but a professional home base that they return to after government or academic stints, is out of touch with the realities of modern legal practice. As ideal as that goal may be, given the turnover in attorney ranks, both associate and partner, loyalty to a firm looks fast to becoming an outdated concept. 

Another alternative is to make sweeping changes in the way you hire and care for your associates.  Assessments that corporations have used for decades more accurately pinpoint those candidates who are likely to flourish in the practice of law as you practice it and who can add a healthy mix to your current team.  Refining your culture by addressing the most important concerns of your hires will go much further towards raising retention rates than throwing another wad of money at them. 

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While Emotional Intelligence has become a popular buzzword, the researchers on whose work Daniel Goleman based his bestselling Emotional Intelligence: Why It Can Matter More Than IQ, only formulated an assessment to test EI in 2002. Called the MSCEIT (Mayer-Salovey-Caruso Emotional Intelligence Test), it is the only EI assessment based on abilities instead of self-reports, i.e., it gauges your actual EI performance instead of asking how good you are at EI. 

Does it make any difference whether a lawyer is emotionally intelligent or not? To determine whether there is a correlation between emotional intelligence and excellence in lawyering, we undertook a study. 

We began with lawyers listed in The Best Lawyers in America as our "excellent" lawyers. Those willing to participate were given the MSCEIT and follow-up feed-back free of charge. 

Our participating lawyers practice across the country: Seattle, San Francisco, Chicago, Houston, Columbia, SC and New York. Their firms range from a small, 15 lawyer boutique to regional powerhouses to global behemoths. And the results are interesting.

• This group of excellent lawyers performed 20% higher on average than lawyers generally.
• This group's highest score was in Understanding Emotions, the most cerebral of the four branches of EI, and the branch that most lawyers perform best in.
• Also like most lawyers, this group's lowest score was in the Perceiving Emotions branch. Although notably higher than the average lawyer score in this area, even excellent lawyers barely score the national average.
• Excellent lawyers score significantly higher than lawyers generally on the sub-branch Managing Emotional Relationships. 

While these excellent lawyers, like lawyers in general, are better at analyzing emotions than recognizing them, they are operating on a higher EI plane than their colleagues. The excellent lawyers' significantly higher average total results and significantly higher ability to manage emotional relationships may account for at least a part of their excellence: they are generally more emotionally intelligent and they are better in relationships with clients and colleagues.

Stay tuned for some of the (non-identifying) specifics on the best performing individuals.

CALL TO BEST LAWYERS TO PARTICIPATE

While we have a good start, we want even more results to produce a more reliable study. We invite any lawyers now listed in The Best Lawyers in America to take the MSCEIT—a 40-minute confidential on-line survey-- at our expense. We will provide you with individual feed-back, a written report, and the opportunity to have your firm identified as high performing.

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In a December 13, 2006 Legal Times article extolling the energy and talents of Pamela Rothenberg, the managing partner of Womble Carlyle Sandridge & Rice’s Washington D.C. office, Rothenberg stressed how much she relies on The Gallup Organization strengths, an assessment that is described in the book First, Break All the Rules: What the World's Greatest Managers Do Differently, in managing the firm. 

Martin Seligman, the Fox Leadership Professor of Positive Psychology at the University of Pennsylvania, has worked with The Gallup Organization to expand and refine their strengths assessment to make it particularly relevant to lawyers. Seligman is so certain of the usefulness of the Gallup strengths assessment in raising productivity, that he has issued a challenge to assess free of charge the members of any firm willing to participate, on the condition that he be paid 10% of their increased profits. 

We have used the Gallup strengths assessment in a number of client projects for law firms and law departments. If you are interested in participating in Seligman’s challenge, or simply want to know more about these strengths and how they could be useful to improving productivity in your firm, contact us.

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BTI Consulting Group recently announced the results of its sixth annual client service survey, with the conclusion that corporate America is not very happy with their law firms.  Of the more than 250 corporate counsel and top executives interviewed over the past year, only 32% said that they would recommend a firm that worked for them.

Of those firms who were in the top 30 for client service, Sidley Austin topped the list.  In a separate list of the most arrogant law firms, Skadden, Arps, Slate, Meagher & Flom took top honors.  It was notable that California and other West Coast firms were well-represented on the former list and New York and other East Coast  firms seemed to dominate the latter.  Several firms are clearly working their way up the service list, including Morrison & Foerster and Reed Smith.

While the survey provides useful data for most firms for understanding their public persona and marketing themselves to prospective clients, those who didn't do well or who figured prominently in the arrogant and other undesirable lists should do their own risk management review and come up with strategies to address their shortfalls.  Understanding the firm's values and how the culture reflects them, possibly reevaluating and redirecting either or both, educating both associates and partners in client service, raising the firm's emotional intelligence, and setting a timeline to confirm by marketplace and client surveys the effectiveness of the firm's new policies are possible strategies.  In a competitive marketplace where clients are king, doing nothing is not a reasonable course.

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Two recent books highlight some of the challenges in building strong practices:  retaining and promoting women and balancing life and work.

Ending the Gauntlet: Removing Barriers to Women's Success in the Law (Thomson/Legalworks, 2006) by Lauren Stiller Rikleen, a partner at the Massachusetts law firm Bowditch & Dewey, reviews the lack of professional fulfillment and the unsustainable personal sacrifice that the current law firm structure engenders in its lawyers, and identifies how these struggles are even more acute for women trying to succeed. While Ms. Rikleen suggests that leaving behind the billable hour fee structure, improved mentoring and other changes within firms can start a transition, it is her opinion that clients and law schools are the ones who have the power to make radical changes in the legal profession and its treatment of lawyers, particularly women.

The ABA's "The Lawyer's Guide to Balancing Life & Work: Taking the Stress Out of Success" by George W. Kaufman (2006) explores the ways that legal practice supports or undermines all lawyers' quest for success, advocating a personal self-assessment to gauge expectations, values and goals and the use of an individual action plan to realize a future more attuned to those issues.

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Two recently published books by female doctors highlight some of the differences between the genders in brain development and differentiation, and give insights as to how to best use our diverse legal talent pool.

The Female Brain by Dr. Louann Brizendine explores the differences in the way women process thoughts compared with the way men do.  For example, women use 20,000 words a day compared to 7,000 for men. Evidently everyone starts out with a female brain. Until eight (8) weeks after conception (when testosterone is introduced), all brains are female. When the testosterone surge arrives, cells in the communication and emotion centers are killed off and more cells in the sex and aggression centers are born. As a result, females can hear a broader range of sound frequency and tones in the human voice, are better able to observe facial and other emotional cues, and display greater interest in getting another’s attention.   Female newborns less than twenty-four hours old respond more to the distressed cries of another baby and to the human face than do male newborns. Four year olds that have the highest quality social relationships also registered the lowest doses of testosterone level in utero. Pre-adolescent girls take turns twenty times more often than boys. Girls use language to get consensus, influencing others without telling them directly what to do. They make joint decisions, often agreeing to others’ suggestions, or setting forth their ideas in a form of questions, such as “I’ll be the teacher, okay?” The disorders that inhibit people from picking up on social nuance, such as autism spectrum disorders and Asperger’s syndrome, are 8 times more common in boys than in girls.

Dr. Marianne J. Legato's new book, Why Men Never Remember and Women Never Forget (Rodale, 2005), points out some significant differences in the male and female brains:

·        Female brains produce a hormone called oxytocin that motivates making and preserving connections with other people.

·        Women have a higher rate of blood flow to their brains, making them potentially more efficient.

·        While men have on average 10% heavier brains, women have more gray matter in the frontal cortex of their brains than do men, which is the executive center of the brain and controls complex behaviors.

·        Women also have more connections between the two sides of their brains, allowing the processing of several different streams of information at once. This difference results both in more linear problem-solving approach in men, analyzing and solving one issue at a time, and increased multitasking in women, which some research suggests is less efficient than the linear route. 

·        The amygdala, the primitive part of the brain that responds quickly to stress, has extensive connections in women to the parts that control blood pressure and heart rate, while men have fewer connections, resulting in a greater ability in men to be untouched physiologically by stress.

·        The female brain has higher levels of the hormone estrogen than men, which prolongs the production of cortisol, so a women feels more stressed for a longer period of time than a man in the same situation, and estrogen also activates a larger field of neurons, giving women a more detailed and vivid memory of the stressful event.

·        Regarding communication, women have more gray matter in the left brain, which processes language, and women use both sides of their brains for speech, unlike men, who use only one. Women have more dopamine in the language parts of their brains than men do, allowing more fluid and efficient processing of language. In addition, women usually are much more able to reading subtle or nuanced expression, probably as an evolutionary aide to caring for pre-verbal infants. The net results give women a decidedly increased capacity for, and interest in, communicating. 

·        Higher levels of testosterone have been correlated with enhanced spatial imaging ability (such as manipulating three-dimensional concepts) but with a diminished ability for verbal expression.

·        Others' expectations play a big role in girls' performance. Girls told that the math test they are taking has a gender bias do much worse on the same test than if they are not told that.

·        There are some researchers who believe that the detachment and difficulties in communicating relating emotionally that autistics exhibit are the results of an "extreme male brain," potentially caused by exposure to high levels of testosterone in utero. There are much higher rates of autism among boys than girls.

·        Men's brains atrophy more with aging than do women's—it begins earlier and is more pronounced on the left, language-based side.

·        A study published in Science on what made working women happy reported that homework and commuting ranked the lowest, but watching TV alone ranked very high, above shopping and talking on the phone. Interestingly enough, taking care of children ranked below cooking and just above housework. The amount of sleeplessness and tight work deadlines decreased enjoyment of all pleasurable activities.

·        Women are more stressed than men. A major National Consumer's League study in 2003 found that younger people were more stressed than older generations, and women were significantly more stressed (84%) than men (76%). Men were worried about their work, women about their family, although women who work and have a family seem to get less stressed out when something goes wrong in either place. In addition, women are 2/3 more likely to be depressed than men.

·        Chronic anxiety is associated with reduced brain mass and impaired memory structures in the brain.

·        Stress enhances the speed at which male rats learn,  while female rats' ability was impaired. Nonetheless, women are more resilient after stress than men are: they recover more quickly and more fully, most often from bonding with others.

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The last few months have seen five new studies relating to diversity and the practice of law:

1.  A new study by the ABA’s Commission on Women in the Professions entitled “Visible Invisibility: Women of Color in Law Firms” found that few women of color are offered equal opportunity and most choose to leave their firms rather than stay and fight for equality.   One of the study’s promoters decried how similar the results are to the results in the studies her committee conducted on the same issues in the 1990s. While, largely in response to client demands, more law firms are attempting to hire for more racial diversity, few pay attention to what happens once these women actually start working at the firm. The attrition rate for these lawyers, according to NALP, reaches nearly 100 % within eight years. At least one reason for their lack of success is laid to the lack of like-situated mentors. While there is a tendency to believe we are past the overt discrimination, 49% of women and 34% of men of color reported harassment or discrimination, compared to 47% of white women and 2.5% of white men. However, the primary reason women of colored reported for leaving legal practice was to obtain greater work-life balance, which is also the most frequently reported reason for all other groups surveyed to leave.

2.  The Inside Counsel/Dickstein Shapiro Diversity Survey, published October, 2006, focused on the diversity progress in corporate law departments based on 377 in-house counsel responses, including 19% participation from general counsel, with respondents being 70% white,14% black; 7% Hispanic and 7% Asian. 

The primary findings of that study are consistent with the ABA report above that looked at law firms, including: 

§         Legal departments lack racial diversity.  "The average legal department that responded had 46 attorneys of which 3.5% are non-Caucasian;  the median department employs 11 attorneys of which 1 is non-white."

§         Less than 9% of legal departments are headed by non-Caucasian general counsel

§         Senior leadership fails to set goals--only 32% of companies surveyed had formal diversity polices.

§         Commitment from the GC and CEO is essential, although often leadership compensation is not tied to meeting diversity goals.

3.  “Presumed Equal: What America’s Top Women Lawyers Really Think About Their Firms” surveyed 16,000 lawyers to report on what women attorneys experience in law firms, updating a 1993 report and its 1998 followup. The report found that many women believe their firms don’t provide opportunities to make partner or foster an environment that values diversity and family.  The survey looks to general trends in disparate treatment that women experience at various law firms and highlights specific weaknesses of 105 individual firms ("most prestigious law firms in the US"). It scores the firms based on responses and ranks them nationally and by geographic location.

Since it was initially created to assist law students in their consideration of job opportunities, this survey attempts to provide a discourse about what it is like to be a woman at a top law US law firm and evaluates environment for women to achieve personal goals such as (i) making partner, (ii) finding a mentor, and (iii) life balance.

The report concludes, "Objective indicators still show a disparity between the relative power held by men and women in the legal field and indicate that gender is still relevant to women's success." 

The report also finds "that long-term professional satisfaction for women is not based on the quality of a woman's work. At present, the reluctance of male dominated partnerships to mentor female attorneys, the persistance of gender biases regarding women's roles, and the tacit penalties that women endure for taking advantage of maternity leave, to name only a few dynamics at play, still profoundly shape women's experience within the legal profession."

4.  "Creating Pathways to Success: Advancing and Retaining Women in Today's Law Firms, " issued by the Women's Bar of DC in May 2006, examined better ways to stem the departure of women from law practice.  While the report includes many specific actions, the findings generally are that there are more stumbling blocks to the success of women in law practice than are currently being addressed by the commonly used methods of supporting and promoting women.  The most common current practices focus on specific programs in specific business areas in a silo-like approach.  The stumbling blocks, however, cross broad issues and fields but unite on the key issues of  how women can achieve the level of business success they expect of themselves consistent with societal demands and personal creativity.  

5.  In October 2006, the National Association of Women Lawyers (NAWL) reported on its survey of the American Lawyer Media's 200 largest firms, measuring the comparative role of female lawyers at different levels of seniority, types of partnership opportunities, where women stand in relation to men in firm governance and comparative compensation at the same levels of seniority.  According to NAWL, the survey findings reflect the situation at law deparatments as well.

With responses from 103 of the 200 firms (and against the background that women have been 50% of law school graduates for each of the past 15 years), women constitute:

§         16% percent of equity partners

§         26% of non-equity partners

§         28% of "of counsel" or other special counsel positions

§         45% of associates

Looking at the 16% representation among equity partners, in an era when partnerships are made within 7-10 years, many of us would have expected greater gender parity at all but the most senior levels of law firm partnership. 

The statistics also reveal that of the 16% percent of all equity partners, women are more heavily represented among the more junior classes of equity partners, constituting 21% of equity partners who graduated law school between 1990 and 1995, and 24% of those who graduated in 1996 or later.

But NAWL warned that the trend emerging from such figures is unclear, noting that women who have recently become equity partners could yet leave the profession, and that even at 24 percent of equity partners, women are substantially under-represented relative to their 45 percent of the total number of associates.  

In terms of leadership positions:

§         16% of the members of law firm governance committees are women. 

§         15% of the firms reported that up to 25% of the members of the highest governing committee were women

§         10% of responding firms reported that there were no women on the highest governing committee

§         5% of managing partners are women.

As to compensation, of 62 firms responding, 92% said that the highest paid lawyer was male.  Of the 35 firms that provided compensation breakdowns, male equity partners were paid an average of $510,000 whereas female equity partners averaged compensation was $429,000.  The survey recognized that the higher number of men at senior partnership levels could account for the significant difference in compensation.

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Sexual harassment came to the legal profession in 1994, when a secretary at Baker & McKenzie filed a discrimination case against the firm and a partner. In 1998, a California Superior Court jury awarded her $7 million and the landscape of law firm conduct was trumpeted as being in the midst of a major change.  Last spring the news broke that a male partner at Holland & Knight’s Tampa office had been given the job of chief operating partner, prompting a number of complaints about his history of sexual harassment, which had, interestingly enough, not been brought to the attention of the firm’s administrators earlier. After extensive local and national news coverage, he resigned from his management position. 

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Pepper Hamilton has recruited one of their of-counsel attorneys who sits on a diversity committee to be responsible for a new program that Pepper Hamilton is sponsoring with Villanova University School of Law.  Pepper Hamilton will provide two three-year law school scholarships, help screen applicants for the scholarships, hire minority law students as summer associates and new associates, and provide lawyers to lecture and mentor minority college students who attend the law school's summer preparation course.

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In April 1955, Dean of Harvard Law School Erwin Griswold noted, "Many lawyers never seem to understand they’re dealing with people and not solely with impersonal law” -- a comment that unfortunately continues to ring true today, when the legal profession’s reputation suffers from an image characterized by a lack of interpersonal sensibilities. 

One of the first law school courses in the nation to apply human relations training to law was taught by Professor Howard Sacks at Northwestern Law School during the 1957-58 school year. The two-week course, entitled "Professional Relations," was offered without credit. Professor Sacks appealed to other law teachers to join in his experiment, both by offering stand-alone courses and integrating human relations training into the regular law curriculum. But a law review article written by Harvard Law Professor Alan Stone in 1971 noted that "law schools . . . have largely ignored the responsibility of teaching interviewing, counseling, negotiating, and other human relations skills." 

Legal academics continue to take the position that lawyers must learn to be more effective interpersonally. As Vanderbilt University Law Professor Chris Guthrie summarizes it, "Lawyers are analytically oriented, [and] emotionally and interpersonally underdeveloped."

It’s more than just a matter of being “nice.” Our survey of Emotional Intelligence and Excellence in Lawyering shows lawyers who are listed in Best Lawyers in America score significantly higher in emotional intelligence than the average lawyer. There’s excellence in that intelligence.

To participate in our study, see our entry “Emotional Intelligence and Excellence in Lawyering” under the topic Emotional Intelligence.

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Harvard Law School’s goal in its revised curriculum this year is to teach young lawyers how to “resolve client dilemmas.” How exactly is that done successfully in the modern practice of law? By calculating dollars won in the final judgment, for example? By assessing the investment of time and energy versus the payoff? 

Everyone has by now heard of the prevailing sentiment that no one wins in litigation any more. If that statement is even somewhat true, what is the course to resolving a client’s dilemma in a way that will be viewed as successful? 

The mediation industry has arisen almost entirely as a reaction to the mistrust of lawyers and what is perceived as their conflict-escalating processes. Even arbitration is becoming viewed as saddled with some of the time-consuming, rigid aspects of litigation, and in-house counsel are moving towards mediation, or at least including mediation in their bag of tools. Paul Adams, Associate General Counsel at the Gap, finds mediation “a very, very powerful process with a strong emotional component. It’s informal and the plaintiff feels like he’s controlling what’s happening.” He also notes that it allows for more creative resolutions.

Thane Rosenbaum argues in his book The Myth of Moral Justice: Why Our Legal System Fails to Do What’s Right (HarperCollins) that what clients want most is an emotional relief--to feel that their position has been understood and acknowledged. "Clients of all stripes walk out of the courtroom saying 'That’s it? I didn’t even get to say what I think?'" Lawyers, he argues, are limited by their legal vision—rather than just channeling their clients’ anger through a legal claim, such as breach of contract, which may not really address the client’s underlying grievance, lawyers should be listening to and acknowledging the hurt, and be able to offer nontraditional ways for that hurt to be addressed. While Rosenbaum’s claim that our current system of justice is morally deficient does not seem to have been challenged, his suggestions as to how to change it have been met with charges of being naive and impractical.

Web.com’s Corporate Counsel Jonathan B. Wilson’s book Out of Balance: Prescriptions for Reforming the American Litigation System takes a less radical approach to reforming how we address our clients’ dilemmas, including advocating for arbitration, mediation and a number of other alternatives.

Thomas Barton, who teaches creative problem solving and preventive law at The Center for Creative Problem Solving at California Western School of Law in San Diego, extols creative legal problem solving not only for the satisfaction it gives the client, but also for the effect it has on the lawyer involved: it feels great to do creative work that really resolves the dilemma. See www.cwsl.edu/cps According to Barton, there are two major steps involved: expanding the context of the problem so that all the dimensions are exposed, and building a larger repertoire for resolution, which includes being open to whatever constitutes “success” in the client’s mind.

Malcolm Gladwell’s book Blink cites research that shows that doctors who are viewed as a valued resource and are able to build a trusted relationship with their patients are not sued –even if they have committed malpractice. While admittedly a subjective standard, shouldn’t lawyers be aiming for that same type of relationship with their clients? The one that makes them “right” no matter what their advice is?

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Christopher Columbus Langdell, first dean of Harvard Law School in 1870, formalized what is now classic legal education, pioneering the use of the Socratic method and a course of study driven by reading appellate court decisions. But “the world of law has changed,” Harvard Law School’s Dean Elena Kagan recently announced, and so finally has Harvard’s curriculum. This year first year law students will be required to take a new course, among others, on legal problem solving, i.e., resolving clients’ dilemmas rather than simply analyzing abstract legal issues. Other law schools, including Stanford and Northwestern, have incorporated similar programs into their curriculum. 

A recent survey conducted by Pace University School of Law of midsize law firms in New York, Connecticut and New Jersey asked firms to name a law school with the ideal curriculum. Nearly 60% couldn’t identify even one. About a quarter of the firms cited the greatest weakness of law school graduates as a lack of real-world experience. Over 20% of the firms polled felt that law school curriculum should include some clinical experience.

“You can get a J.D. without having any connection with a client,” said Mark Heyrman, director of clinical programs at the University of Chicago Law School. “No medical student could graduate without at least having some patient contact.”

The clinical component of law school education is expanding. And there are external prods. The American Bar Association now requires accredited law schools to offer “real-life practice experiences.” Some state bars are also mandating certain client training before associates can interact with clients. And, as pointed out in an earlier blog note, corporate clients may designate how senior an associate has to be before working on their matters.

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Another message that the increase in associate departures may be sending is that our attempts at mentoring are failing. Mentoring has become a favored buzzword recently that many law firms at least pay lip service to.  Most of these programs tend to fairly arbitrarily assign new associates to mentors, dictate a certain number of meetings annually, and require reams of paperwork. They are, in short, more a product of lawyers’ natural tendency to be “thinkers” (78% of lawyers) instead of “feelers” (22%), using the Myers-Briggs personality trait descriptions. Mentoring is business shorthand for “someone to watch over me,” a skill that does not come naturally to attorneys. 

Sullivan & Cromwell has recently announced a revamping of its mentoring program for its general practice group in New York and Washington. There are separate programs for junior associates—paired with mid-level associates who focus on acclimation and socializing—and more senior associates, who are paired with two partners to help develop skills. 

Why are law firms and law departments providing this “soft” support for young attorneys? There is, of course, always the “herd mentality” argument, that if other firms are doing it in this competitive talent market, so must we. But that begs the bigger issue. Why, after generations of no such official “coddling,” have associates begun to need this sort of assistance, and, more astonishingly, firms have been providing it? 

Why firms provide mentoring is partly in response to what firms view as ill-prepared and poorly motivated young associates, coupled with the exodus of those associates when they are throw in to sink or swim.  Add to this the growing bigness of law firms, with more extensive policies, rules and procedures, and mentoring becomes a formalized, lengthy orientation process. 

But I would wager that an even bigger reason behind the need for mentoring originates in the personal lives of the Gen Xers, Yers and Zers themselves. These young people are more likely to have been supported financially and academically up to and through college and law school, so they expect continued support. They have also grown up in a more generally “therapized” culture, where identifying needs and asking for them to be met is a sign of mental health. Finally, the continued breakdown of the nuclear American family and its broad geographical dispersion may mean that, as their careers progress, these young adults need to replace or supplement lagging or distant family support with relationships at work.   If they're not getting that support from your firm or department, they will go elsewhere.

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Part of the growing managerial team at law firms over the last decade or so has been the addition of the Professional Development or Career Development Officer. The goal, according to one firm, is happier, more productive attorneys who in turn are less likely to leave. The trend began several years ago, when large firms, such as Paul Weiss, whose current Director of Professional Development is David Cruickshank, realized the benefits of actively directing and supporting their attorneys' career development. 

Over time more firms have signed on to the concept, such as Chicago’s Gardner Carton & Douglas (soon to merge with Drinker, Biddle & Reath), which in 2004 appointed their first Chief Career Development Officer, responsible for the summer associate program, orientation of new associates, assignments and feedback, mentoring, training and formal performance reviews. Sonnenschein Nath & Rosenthal also hired at that time its first Chief Learning Officer, as have Holland & Knight and Arnold & Porter. Each position is tailored to the individual firm’s goals and requirements-- some focus primarily on providing targeted training to associates and partners, some attempt to manage quality assurance or reach out to alumni, while others take a more free-wheeling approach. Cordell M. Parvin, the lawyer at Jenkens & Gilchrist who became their first official Attorney Development Officer a few years ago, said at the time that his firm was moved to formalize the position in order to help their lawyers make for themselves a career that they love. “We’re in an era where young lawyers have never been paid more money, and they’ve never been more unhappy.”   

Adding Internal Coaches

A recent twist has been the inclusion of individual coaching responsibilities in the Professional Development officer’s role, or, as in the case of some firms, such as Orrick, Herrington & Sutcliffe (soon to merge with Dewey Ballantine), Arnold & Porter and Fenwick & West, the addition to the team of an internal full-time coach. Like the Career Development position, the coach's role can be defined in many different ways, depending on the values and goals of the firm. And the coaching methodology could differ significantly depending on which of the myriad coaching approaches are used.

The Challenges of Coaching Lawyers

Dr. Martin Seligman, the Fox Leadership professor of psychology at the University of Pennsylvania, founded the school of Positive Psychology, which focuses on factors that make for professional and personal success, instead of following the traditional diagnostic model of addressing weaknesses. His work identifies optimism particularly as producing sizeable psychic benefits. A widely successful coaching program based on Marty's positive psychology model encourages “learned optimism.”  

According to Marty's research, however, lawyers are strongly pessimistic-- so much so that law appears to be the only career where pessimism is a career enhancing attribute. So the question arises as to whether changing lawyers' pessimism to optimism will kill the goose that lays the golden egg. Ideally, such coaching would give lawyers the ability to switch out of their day-job mindset, not only when socializing or in family situations, but also when engaging in non-lawyering professional activities like managing their firms and courting their clients, producing bottom-line benefits. 

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In-House Counsel recently reported on the results of the Managing Outside Counsel Survey Report prepared by the Association of Corporate Counsel and Serengeti Law of Bellevue, Washington.  The study revealed, among other things, the four reasons that companies are firing outside counsel. In 2005, 55.6% of the General Counsel surveyed reported that they terminated the relationship with at least some of their outside firms, up almost ten percent (50.7%) from 2004. The reasons most cited for firing outside counsel were:

1.       poor quality of work

2.       lack of responsiveness

3.       high fees

4.       personality issues 

Note that, after the threshold issue of competent work, two of the three main reasons for firing an outside firm were for deficiencies in what some lawyers refer to as “soft” skills—lack of responsiveness and personality issues. 

How responsive are your lawyers?   Do they have well-developed client relationship skills?

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