On February 12, 2008 Muir is scheduled to discuss with students at Northwestern University’s Business Institutions Program how to improve decision-making. Based in large part on the information contained in "Promoting an Effective Board or Management Group," the discussion will explore, among other subjects, optimal personality traits for good decision-making and how to avoid extreme decisions.
"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…
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…
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.
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.
Ronda Muir will be making a presentation on managing the people risks that arise in law firms at a conference for Managing Partners in Chicago on Thursday, June 21. Sponsored by ARK Group, the conference, entitled “Developing a Risk Conscious Culture in Your Firm,” explores the relationship and interdependence of ethics, risk management and legal compliance.
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.“
In connection with the 129th annual International Tradmark Association meeting in Chicago, Ronda Muir, Senior Consultant, presented a program on Wednesday, May 2, at Robin Rolfe Resource’s Women’s Power Breakfast for seventy senior corporate and law firm women in intellectual property. Her presentation focused on what makes lawyers, and women lawyers, different from other professions and how to use those differences…
Do we have a deal? An easily-missed recent entry in the legal press noted that DLA Piper had decided to award the latest round in starting salary increases to entering associates in only one practice area–patent litigation. The article noted that patent litigators often have science and engineering degrees and that clients are willing to pay premium billing…
There is an associate recruitment and retention crisis looming for which there are no easy solutions.
Supply and Demand
Law schools continue to graduate 40,000 students a year, as they have for the last 20 plus years. The AmLaw 200 law firms have been steadily hiring an average of 4%+ more associates each year, resulting last year in…