Learning Emotional Intelligence

Even the original researchers in the emotional intelligence field--Jack Mayer and Peter Salovey--have taken different sides in the controversy as to whether EI can be learned.  That uncertainty has put law firm professional development managers in a difficult spot, second-guessing the usefulness of providing lawyers with EI training programs.

The most recent research suggests that, instead of EI being an attribute you are either luckily born with or unfortunately stuck with lacking, it’s a skill you can learn. And a skill that can be learned through a program that is not particularly arduous for either trainees to undergo or management to provide.

In two recent studies, people were enrolled in an 18-hour emotional-competence course designed to teach “understanding emotions, identifying one’s own emotions, identifying others’ emotions, regulating one’s own emotions, regulating others’ emotions, and using positive emotions to foster well-being.” 

Results of the first study showed that "the training with e-mail follow-up was sufficient to significantly improve emotion regulation, emotion understanding and overall emotional competencies. These changes led in turn to long-term significant increases in extraversion and agreeableness as well as a decrease in neuroticism." 

Results of the second study showed that "the development of emotional competencies brought about positive changes in psychological well-being, subjective health, quality of social relationships and employability. The effects were sufficiently large for the changes to be considered as meaningful in people's lives." 

So compared to people who didn’t take any course, or who took a course on improvisation, the emotional-competence trained group scored better on various emotional measures, becoming by external measures more extroverted, less neurotic and more agreeable. They also simply felt better--they reported better physical and mental health, and happiness.  And not just right after the course, but for many months later.

Notably, the course also improved "employability," as judged by human resources professionals who watched videotapes of interviews with participants before and after the course.

The implications for lawyers is obvious--we are on the low side of emotional intelligence no matter which assessment is used, as much as a standard deviation (15%) lower than the average American, according to some assessments. An 18-hour training program is a manageable one for both lawyers and firms with an important upside--better client service, better morale and a better culture.

Let us help you develop an emotional competence course that can bring substantive improvements to the practice of law in your department or firm and to the pleasure that you and your colleagues take in practicing law.

The Touchy, Feely Side of Successful Client Service

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.

The Value Advisory

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?

Trends in Partner Compensation Systems

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.

 

The Unique World of Lawyers

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.

Emotional Intelligence for Lawyers

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. 

The Recession and Diversity

Just a heads up on those initial reports that the recession has not impacted minorities and women in the legal profession.  The most recent data from a survey done by the Minority Corporate Counsel Association shows that fewer minority candidates are being hired and promoted, and they are leaving their jobs at a faster clip, while women seem to be holding their own.

The number of summer associates hired in 2009 dropped by 20%, and the past year's summer class had the lowest percentage of minority students in three years. The percentage of minorities hired by law firms at all levels in 2009 was 19%, compared to nearly 22% in 2008.

And for the first time in seven years, the percentage of minority equity partners did not increase but remained virtually flat, nudging up from 6.05% in 2008 to 6.06% in 2009 at the 263 law firms surveyed.  Meanwhile, minority attorneys left their firms at higher numbers in 2009. They represented 13.4% of the attorneys at the firms surveyed, but accounted for nearly 21% of those leaving during 2009.

The survey did find a little good news on the diversity front: there was a small increase in minority non-equity partners — from 8.5% in 2008 to 9% in 2009, and the percentage of minorities serving on management committees and in executive positions inched up to 5.5%.

Women evidently came through the year with a small gain, constituting 16.8% of equity partners in 2009, compared to 16.5% in 2008. Their numbers also grew in the non-equity ranks and on management committees. 

Of course the concern is that in a continuing hunkering down mode, firms will not return to pre-recession diversity levels any time soon, presenting the danger that what is for now a one-time drop in minority recruitment, promotion and retention could have a long-term impact on overall law firm populations. And thus on the integrity and effectiveness of client service and therefore on the future growth of revenue.
 

P.S. As a follow-up, NALP just published their own survey data with substantially similar conclusions. Nationally, the proportion of women and minority associates in law firms dropped slightly for the first time since NALP began collecting statistics in 1993. The percentage of women associates slipped from 45.66% to 45.41%. The percent of minority associates dipped from 19.67% to 19.53%. Partner ranks showed gains nationally for women and minorities, though the drop in associates meant law firms as a whole became less diverse.  

In New York, minority associates dropped to 23.25% this year from 23.95% in 2009, and minority partners dipped to 6.29% from 6.38%.  The proportion of women associates was relatively flat at 44.97%, and women partners increased to 16.99% from 16.85%.

Muir to Discuss Origination and Other Partnership Compensation Issues

Muir will co-present with Peter Zeughauser an audio conference hosted by Center for Competitive Management (CCM) on Thursday September 30, 2010 from 2:00 pm to 3:15 EST.  "Origination Credit and Partner Compensation for the New Legal Landscape" will include discussions of what origination is and how to measure it, what role origination plays in changing compensation systems, the impact of the recession and other factors on compensation, and specific compensation challenges, including dealing with succession, laterals and motivating leadership.  Dozens of firms have already signed up. Don't miss this chance to review your firm's approach to partner compensation in light of current market conditions. 

For further information and to register, go to http://www.c4cm.com/lawfirm/origination-credit-and-partner-compensation-for-the-new-legal-landscape.htm.

Muir Leads Associate Seminar on Business of Law

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."
 

Muir to Lead Discussion on Lateral HIring and Integration

From 2:00 pm to 3:15 EST on Thursday April 29, 2010 Muir will lead an audio conference discussion hosted by the Center for Ccompetitive Management (CCM) entitled "Lateral Partner Hires: Selecting and Integrating the Best Fit for the Firm," centering on the issues associated with hiring and integrating lateral partners. A record number of lateral partner moves were made in 2009 and 2010 is shaping up to be another record year.  Don't miss this chance to maximize your firm's efforts to grow while avoiding the expensive pitfalls of lateral partner attrition.

For further information and to register, go to http://www.c4cm.com/lawfirm/lateral-partner-hires.htm

 

Georgetown Law School Center for the Study of the Legal Profession's Conference -- "Law Firm Evolution: Brave New World or Business as Usual?"

It was my great pleasure--something I don't often say about a conference-- to attend this invitation-only gathering last week, March 21-23, of both august and up-and-coming law industry professionals as they prognosticated the future of our practice and what that might in fact look like up close for a broad array of providers and clients. 

While I will digest and relay over the next few weeks a number of interesting findings and tantalizing predictions that were discussed, let me summarize a few currents that are of particular interest to me.

One, notable is the influx and rising success of non-lawyer services in this emerging marketplace, whether those services are provided by in-house specialists in law firms, wholly-owned subsidiaries of firms, or independent companies.

Two, changes making their way into law firms are both reducing incoming associate classes and also raising the ante for efficiently training and promoting those associates, with the result being that firms are experimenting with more discriminating approaches to hiring and more sophisticated methods of providing professional development.

Three, perhaps as a corollary of at least the first point above and probably the second point as well, law firms are becoming truly more diverse workplaces that respect and rely on the contributions of non-lawyer sociologists, MBAs, IT specialists, project managers, psychologists, accountants and other professionals to more efficiently analyze, structure and deliver services responsive to client needs.

Stay tuned for the  review of this conference's exciting topics.

 

Muir to Participate in ALAS Panel on Lateral Partners

Muir will participate in a webinar entitled “Think Like a Lateral—How to Hire and Retain Quality Lawyers” to be presented on Tuesday, March 9 for the members of the Attorneys' Liability Assurance Society (ALAS). 

From Generalization to Specialization and Back Again

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.

The People Factor Critical to Reinvention

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.

Convergence and Profitability, or Bigger is Only Bigger

One of the more interesting developments in the law industry over the last couple of decades is the emergence of the mega-firm.  Or what might be called the strange case of the temporary triumph of the delusion of efficiency.

"Convergence," the short-hand name of the corporate model for managing outside legal fees by reducing the number of preferred firms, was developed originally in the early 1990s by DuPont and then trumpeted by interested advocates--primarily consultants--who benefited from advising both sides of the aisle. Law departments needed to know how to evaluate firms for their preferred list, and law firms needed to know how to get on those lists.

The theory was that dealing with fewer law firms meant that a company would have more leverage in negotiating fees and conditions with those few that they did hire, that the company would no longer pay repeatedly for bringing firms up to speed on its business, and that this more holistic global legal approach would benefit the company in both concrete and intangible ways. 

Leading the way, DuPont reduced its 350 outside law firms to 41 and its 150 legal vendors to 4.  Five years after the program's introduction DuPont reported that

  • Legal service expenses were reduced 39 percent from 1994 to 1997.
  • Litigation savings amounted to over $30 million in the last four years of the program.
  • Cycle time dropped from 39 to 22 months in two years and the docket was cut in half.
  • Legal staff requirements can be forecast accurately.
  • Purchasing power was leveraged.
  • More women and minorities are employed in the PLF and supplier firms.
  • True partnering was achieved: work is usually performed so seamlessly that outsiders have trouble distinguishing between DuPont's outside attorneys and in-house counsel.                     

Over 200 other major companies followed suit--General Electric's hundreds of outside firms were reduced to 140.  Pfizer slashed its outside litigation counsel from 200 to 52.  Pfizer eventually designated only 1 outside law firm to advise them nationally in some practice areas, a bold step again followed by others, such as Tyco and Honeywell.

Law firms were told that more types of business from a single client would guarantee a more consistent flow of work, again reduce the embedded cost of getting up to speed repeatedly and, with the more rounded view of a company's issues, ultimately make better lawyers of us all. 

So law firms geared up to offer companies a broad range of legal services and it was only a short step from there  to offering those services at locations all around the world.  Whatever you need, we can do.  Wherever you are, we are there.

Law firms started acquiring IP, land use and employment departments and boutiques to supplement their usual expertise. They opened offices in Hong Kong, Abu Dhabi and Omaha.  

In 1992, an admittedly lean year because of a financial downturn, there were 9 law firm mergers, which accelerated into a record high of 75 mergers in 2001.  By 2008, also a year of financial downturn, there were 70 mergers.  And those numbers don't reflect the many acquisitions by firms that don't count as a "merger"-- acquisitions of groups of lawyers, practice groups or other pieces of firms. A 2007 Law Firm Inc. survey of AmLaw 200 COOs found that evaluating merger possibilities was the single matter on which COOs collectively spent most of their time. 

Top US-based firms (NYLJ 250) grew from an average of 100 lawyers in 1985 to today's behemoths, topped by DLA Piper's 3,785 lawyers with 2008 revenue of $2.26 billion. As to profitability, before the current downturn, law firm revenues (along with expenses) had been ticking upward for years at double digit rates, fueled by pass-along billing practices that also rose without fail each year, resulting in compounded average growth in profitability of over 9%. 

Corporations and big law firms seemed to be on to something.  Consultants were in hog heaven. 

But the economic slowdown has hit big firms particularly hard. Clients are turning increasingly to small and mid-sized firms who charge hourly rates 20-50% lower for large swaths of work that don't require legions of associates, firms which are also less likely to dump them because of the complicated conflicts arising from a global presence.  

So where is the mega-firm now?

More than half of the 50 largest US firms have fired associates and staff in anticipation of or reaction to revenue declines and some firms, such as DLA Piper and Dewey & LeBoeuf, have cut year-end payouts to partners as well.  Star partners at the country's biggest firms--DLA Piper, Skadden Arps--are leaving for smaller firms in order to offer clients more reasonable rates and avoid the thicket of conflicts. Regardless of the economy, the promise of cross-selling did not materialize and no one's sure if they are better lawyers for the mega-firm experience, or just poorer ones.

So did the DuPont Legal Model of convergence and its virtues fail? 

If you ask DuPont, "the keys to the legal model’s success have been its ability to streamline legal representation through its designation of primary law firms (PLFs) and its commitment to the utilization of paralegals."  And you should note that DuPont's current roster of Preferred Law Firms includes eight of the 100 biggest U.S. law firms but four times as many smaller firms, which General Counsel Thomas L. Sager says he prizes for their “flexibility and creativity” in billing.

Perhaps the real bottom line is, as was clearly stated in an analysis of law firm mergers done by Vanderbilt Law School back in 2005: “There are no obvious economies of scale or scope for law firms in a merger, where productivity is largely a result of billings by individual professionals.”

That conclusion has been born out by the financial statistics kept by Dan DiPietro of Citibank’s Law Firm Group, who said flatly at a recent conference forecasting future growth that "bigger has not yet proved to be more profitable."

 

Muir Leading APLF Leadership Roundtable

Muir is leading an inter-active limited-attendance roundtable on Law Practice Management for Current and Prospective Law Firm Leaders at the 12th Annual Meeting of the Association of Patent Law Firms (APLF) in Chicago, Illinois on Thursday, September 17, 2009.  For more information or to register, go to http://www.aplf.org.

It's Crunch Time: Do You Know Where Your Clients Are?

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.

 

MBTI: All Because of A Lawyer, or Those Mothers-in-Law!

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. 

 

Muir a Panelist at ALAS General Meeting

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.