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!”
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.
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.
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.
“Under the entity model, as individual attorneys cede decision-making authority to the firm, including authority for decisions regarding professional responsibility and ethical behavior, they tend to renounce (at least implicitly) personal responsibility for moral decision making. Law firms as entities, however, have no inherent mechanism for replacing personal moral responsibility with institutional moral responsibility. In consequence, morality can fall through the cracks, allowing corruption to ooze into the enterprise.“
That conclusion is consistent with long-standing behavioral science research on groups. Individuals in a group tend to support group decisions that go beyond what they as individuals would do, feeling at best a highly diffused sense of responsibility. In other words, a group is more likely to embrace risks that its individual members would not undertake on their own.
Gallopoulos recommends that firms push the ultimate responsibility for ethics back onto the individual attorney, and also establish a formal firm compliance mechanism to support, encourage, require and police ethical behavior.
Keeping their lawyers interested in their work and loyal to their firm is a priority for many firms today, particularly given the limited talent pool, the expense of recruiting and training, and the pervasive “free agent” mentality. To help them reach that goal, our advice to law firms is to start with a subject that lawyers are sometimes hesitant to embrace: values. “Values” are one of those emotionally loaded "soft" words that analytical lawyers worry could lead to potential managerial disasters ranging from self-righteous policing to relativistic nonsense.
But a discussion of values can also be the beginning of identifying, in a personal and professional way, what a firm stands for. Remember that 82% of lawyers go to law school for idealistic reasons. Most do not follow the obvious non-profit or government career path. But time and again surveys reiterate the importance to lawyers, and particularly to young Gen X and Gen Y lawyers, of finding personal meaningfulness in their work. Clearly articulated firm values can provide a rallying point for these young lawyers, who can then not only structure pro bono and other “do good” activities around those values but can also harness those highly motivated, competitive, Type A qualities for values they believe in. And those values are what can instill a type of firm loyalty that is entirely independent from the numbers on a paycheck.
Which Is It?
While we can debate the nuances among morality, ethics and values in another blog entry, the concept of personal integrity may be the simplest key to these three important law firm goals: achieving optimum productivity, maintaining professional ethical standards, and attracting and retaining valuable legal talent.
Prioritizing the discussion of integrity, explaining exactly what integrity means in the context of law practice generally and your firm’s practice specifically, and highlighting the importance of that attribute to the firm’s identity is a profound starting place on the road to good risk management and a more cohesive firm.