If we were sitting in your office, this is what I would tell you...

I Couldn’t Have Said It Better…

Former Big Firm partner and now author Steven Harper has a history of articulating difficult truths about how many law firms have been losing their way.  If you are a managing partner and dismiss Harper’s most recent blog post as being off-target, I strongly encourage you to challenge your thinking or get a trusted colleague to read it and then challenge you about whether your firm’s strategic approach has been paying off.    http://thelawyerbubble.com/2014/05/21/dangerous-advice-for-law-firm-leaders /

 

Posted in Belly of the Beast, Competing, general, Laterals, Revenues | Leave a comment

“You’re nothing like most consultants!”

Last weekend I was honored to be the luncheon speaker at a large law firm’s annual partners’ retreat.  Of the 175 lawyers there, I may have met about 10% of them before my presentation.  Immediately after I finished, a lawyer with 25 years’ experience rushed over to introduce himself.  He then said, “I hate consultants!  So when I heard that we were having a consultant speak to our partnership, I really wasn’t looking forward to it.  But you really surprised me.  Your talk was relevant, interesting and useful!  You’re nothing like most consultants!”

Music to my ears, and a great affirmation of what I’ve been doing.  When I began my business, I knew that I also didn’t like consultants and therefore didn’t want to be like one.   But after more than three decades, I knew the realities of practicing law, and after 20-plus years as a managing lawyer at Procter & Gamble and working with scores of law firms around the country, I had learned a great deal.  As I conceptualized how to approach my new business, I decided to work as a colleague and peer of my clients, bringing to bear my experiences and knowledge to the realities of their situations.  No pre-packaged products to push down my clients’ throats, no HR jargon, and no high cost organization that I needed to support through bloated client billings.

Just me sitting down with you and offering a fresh perspective regarding the problems you face.  From the larger, organization-based issues that arise from mergers or how to build your firm’s capabilities and, with it, the firm’s ability to compete better in the post-2008 economy.  Down to managing the “problem partner” who needs a surgical but sensitive approach.  Take it from the managing partner last weekend who told me after my speech, “You hit it out of the park.”  Or from that lawyer who introduced himself after I spoke to his partners.  I’m nothing like most consultants.

Posted in Building capability, Competing, Consultants, Revenues | Leave a comment

Lawyers treating lawyers badly

       When I began practicing law, all I really hoped for were: 

    • A few partners to take an interest in me as a budding attorney and as a young adult—people who were genuinely interested in my success and would be patient as I learned how to be a lawyer
    • Feedback about what I did well and what I needed to do better, during or shortly after every project I worked on, so I could know where I was on track and what I needed to do differently. 
    • One or two people to coach me on how things really worked at the firm and how to navigate the path to partnership,
    • A little flexibility so that I could juggle the demands of my growing family with those of my work, and
    • An occasional pep talk from “been there, done that” colleagues to help me over the inevitable bumps in the road so that I could appreciate what made working at the firm special and worth my long-term personal investment.

       This short list is true for all lawyers whether we began practice in the 1970’s as I did, in the 80’s, 90’s, or this century, and irrespective of one’s gender, race, culture or sexual orientation.  That shared commonality suggests that every person in a law firm would treat everyone else exactly how they wanted to be treated themselves.  But we know that doesn’t happen. 

       When people are not treated well, they become frustrated, don’t work up to their ability, collaborate poorly, eventually leave and sometimes sue their old firm.  Morale suffers, retention is poor, recruiting the best talent becomes challenging, the firm’s performance and results suffer, and all that makes it harder to build the business, make money, retain clients and keep the firm going. 

       So if treating every person in a firm well is good for business and the firm’s success, why are some people not treated well?  In my experience, it’s almost never due to bias or discrimination.  After all, white guys have been treated poorly by other white guys for decades.  Instead, it’s because lawyers worry so much and because we weren’t treated well ourselves.

       Law is a personally demanding occupation.  We always have the fate of our clients in our hands, and that dependency weighs on each of us emotionally.  We worry about our clients and the results we can accomplish for them, which is exacerbated because there are more variables affecting the outcome than any of us can control.  We know our clients look to us as their guardians and champions within the legal world and expect that we will always solve their problems and achieve their goals.  This is the unrealistic reality lawyers deal with daily, and a key reason why lawyers have one of the highest rates of substance abuse of any occupation

       We also worry about whether the other people in our office who work on our clients’ matters will do a good job—defined as “as good as I would do.”  The buck stops with us, and often this feels so overwhelming that we become impatient with the people around us and forget how much alike we all are, as we focus solely on pleasing our clients.  

       A second reason lawyers treat junior people poorly is because, when we were junior, we were treated badly and so that’s all most of us know.  Once we survive those early years and are no longer “junior,” we tend to follow the patterns of the lawyers from whom we learned.  We exude a confidence that we know what to do in any situation.  As a prominent managing partner once told me, “Lawyers have a natural arrogance to think they don’t need help solving their problems.”  Hence, there is no reason to expect this vicious cycle of lawyers treating other lawyers badly will improve.

       But in the volatile and uncertain legal industry that has existed since late 2008, no law office can afford the poor results that flow from treating people badly.  This must be turned around, but how?  I’ll share some thoughts in my next blog entry, so please stay tuned (and subscribe to my blog, if you haven’t already done so).

Posted in Diversity, Reputation, Revenues, Sustainability, Treating others badly, Treating others well, worry | Leave a comment

If Dayton gets it….

Don’t think of Dayton, Ohio as an old, sleepy place.  The Dayton Bar Association certainly isn’t.  Earlier this month at its annual Diversity Day, the DBA broke new ground by inviting Karla Rothan, Executive Director of Stonewall Columbus, the “visionary, inclusive and fun-spirited” GLBT advocacy organization, to talk about the legal concerns of the GLBT population.  As expected, Ms. Rothan was an engaging firecracker.  And I had to speak after her.

To prepare for my talk, I dug out the amicus brief filed by 278 employers in U.S. v. Windsor, the case recently argued before the U.S. Supreme Court challenging the constitutionality of the Defense of Marriage Act.  I wanted to see who those employers were.  I was amazed.

Were they wild-eyed, hyper-liberal, San Francisco-based entities that don’t represent mainstream American industry?  Oh, there may be a few, but those 278 amici included such conservative stalwarts as:

  • Bain & Company, Mitt Romney’s old firm
  • Huge banks like Bankers Trust, Citigroup, Goldman Sachs, and Morgan Stanley
  • Insurance bastions such as Aetna, Liberty Mutual and New York Life
  • Industrial giants like Alcoa, CBS, JetBlue, Intel, Johnson & Johnson, Marriott, Mars, Pfizer, Walt Disney and Xerox

And 34 law firms signed on as well.  While some were either quite small or advocates for GLBT issues, many of the firms you know or have dealt with:

  • Baker & McKenzie, the global mega-firm with more than 4000 attorneys
  • New York powerhouses like Hughes, Hubbard & Reed, Shearman & Sterling, Skadden Arps, and Wilkie Farr
  • Old line Boston firms like Choate, Hall & Stewart, Nixon Peabody and Ropes & Gray
  • Coastal giants like Fenwick & West and Venable
  • Management-side labor and employment giants such as Seyfarth Shaw and Littler Mendelson

So what does this tell you?  It tells me that resistance to GLBT issues is not a focal point that is emerging.  That happened a few years ago, so today with such conservative law firm and industrial support, the majority of American society is past it. 

After all, you probably have a GLBT lawyer in your firm, even if you don’t know it.  And if not, some of your colleagues have a child or sibling who is gay or lesbian.  Just ask Senator Rob Portman.

And certainly, your clients include gays and lesbians.  But if they look at your law firm and only see straight men and women, how long will it be before they start shopping for the comfort of a more diverse law firm to meet their legal needs?

Posted in Diversity, GLBT | Leave a comment

In the best interests of the firm…

                There is more significance to Husch Blackwell’s 6% revenue increase during 2012 than first meets the eye.  Am Law Daily, Jan. 16, 2013.   While many other national and regional firms’ long-term sustainability is threatened because some partners are allowed to put their personal interests ahead of their firms’, Husch Blackwell clearly has moved to the more enlightened paradigm by which the firm’s interests come first.  And as the 2012 figures demonstrate, not only is the firm’s long-term viability strengthened, but the partners ultimately end up with more in their pockets as well.

                Like scores of other firms, Husch Blackwell’s history since the recession began in late 2008 was rocky.  In March 2009 the firm cut 17 lawyers and 45 staff  (AboveTheLaw.com, March 12, 2009), another 10 lawyers four months later  (Law360.com, July 16, 2009), and 20 more attorneys including some non-equity partners in the fall of 2010  (AboveTheLaw.com, Oct. 1, 2010; Am Law Daily, Oct. 5, 2010).  Gross revenues dropped 3.5% in 2010 and declined another 4.7% in 2011.  The trend was clear:  fewer lawyers and fewer dollars.

                In August, 2011, the firm partnership selected a new Chairman and a new CEO/Managing Partner to begin seven months later on April 1, 2012.  Husch Blackwell press release.  Apparently they followed Mr. Rogers’ old adage to take the time and do it right.  Under the new leadership in 2012, total revenues climbed $16,000,000 or 6%, while the total number of lawyers went down only 1%.  Although the firm ascribed some of its additional income to higher billing rates for “more sophisticated work” (apparently M&A and litigation), the math tells you that there must be more to this revenue leap, especially when the number of partners with their higher billing rates declined 3.6% during 2012. 

                Although Husch Blackwell has about 9% fewer lawyers today than when the layoffs began in 2009, the firm continued to bring in both laterals and new law school graduates throughout the same time period.  Hence, the total number of lawyer departures was much greater than the 9% figure suggests.  And during the same time, the number of equity partners went down by more than 17%.  Clearly, the firm changed its mix by encouraging, inviting or just telling its least valuable attorneys to practice elsewhere.  The firm also must have become more strategic about the types of legal work it sought, and found ways for its people to become more efficient and productive.  As a result, what Husch Blackwell has now is a lean, mean revenue-generating machine.  If you practiced there today, you’d have every reason to think the firm’s future looks pretty good.

                Take a minute to think through how that firm must have changed its mix of attorneys.  I have no inside information, but it seems clear to me that the leaders must have begun by determining which of its attorneys were the least valuable to the firm—whether they defined “value” as total billings, rainmaking, quality of legal work, managing a practice group, recruiting or developing talent, or most likely, some combination of “Build the Business” and “Build the Firm” factors.  Presumably, they then compared each lawyer’s assessed “value” with his/her compensation.  Utilizing the old but often ignored standard, “Does this lawyer deliver significantly more value to the firm than s/he costs?” the leadership must have made some very difficult choices about which equity partners should be reclassified and which lawyers simply needed to leave. 

                Next, Husch Blackwell’s leaders must have held some very honest and straightforward discussions with those individuals about what the firm had decided.  Can you imagine walking into the office of an old friend, a colleague whom you had helped out and who helped you with your clients over the years, someone whose spouse or partner you had gotten to know through firm functions, perhaps someone who had been at the firm longer than you, and telling him or her that their future with the firm was either ending or becoming less than it was? 

                I can promise you two things.  First, with some careful thought and sensitivity, those tough talks can be done effectively while preserving the individual’s dignity.  Second, if a firm is not having those talks with lawyers who don’t deliver significantly more value than their compensation, the firm is damaging its long-term financial viability.  While bringing in laterals with books of business may provide some temporary financial “cover” that can mask this drainage, it does not solve the underlying problem—all it does is add more water to a vessel that leaks.  And one day, there will be a Day of Reckoning.  Belly of the Beast, Feb., 15, 2012.  Besides, why should a potential lateral dilute the value of what s/he can deliver by joining a firm where a fraction of his/her effort would be diverted to compensating lawyers who take more than they give?

                Six months after he became Husch Blackwell’s Chairman, Maurice Watson was asked by a reporter, “What have you learned about the firm that you didn’t already know?”  His answer was telling:

Our lawyers and partners are looking for some direction about where we ought to be going as a law firm in times that some view as perilous.  At the same time, I think there’s a tendency among lawyers at times of stress and uncertainty to hunker down and be conservative.

It is almost innate to do the opposite of what you ought to do.  When stocks go up you ought to sell, and when they go down you ought to buy.  You want to follow the herd because that’s going to provide you some protection.  In fact, it will ensure that you get trampled.  Kansas City Business Journal, Oct. 12, 2012. 

Will your law firm be trampled?  Or are you willing to make the hard decisions to act in the best interests of your firm and fix what’s causing your revenue to leak?  As I said, the process may be difficult but with careful thought and sensitivity, you can do this in a way that is effective while preserving the dignity of your colleagues.       

Posted in Belly of the Beast, Husch Blackwell, Laterals, Maurice Watson, Revenues, Sustainability, Value | Leave a comment

Quality Control Can Kill Two Birds

When Seyfarth Shaw hired me fresh out of law school, one of the first rules I learned was that all written work had to be proofread by a secretary who did not type it.  As a partner explained, “Everything leaving this office reflects on the firm, so to ensure 100% quality, we have a second person proof it because people often fail to catch the mistakes in their own work.”

But most law firms do not follow that approach to control the quality of their underlying legal work.  Typically, firms rely upon a partner or a trusted senior associate to review everything significant.  That means lawyers are essentially checking their own work, even when an associate drafts a document at the direction of the partner who ends up checking it.   Because any quality control system is only as strong as its weakest link, ask yourself, “Are all of my partners uniformly excellent lawyers?”  We all know the answer is “no.”

That means it’s just a matter of time before courts, clients or adversaries will end up with documents that lack the quality of content your firm must deliver in order to preserve let alone strengthen its reputation and its future viability.  Most likely, your firm already has encountered quality problems.  Think about Warren Buffet’s old adage, “It takes 20 years to build a reputation and 5 minutes to ruin it.”

If that makes you anxious, then the thought of you suggesting that your firm start having everyone’s work checked by a different partner may send you screaming for the Xanax or Cymbalta.   So how can your firm protect itself and meet your clients’ growing demands for an effective quality control system?

Step 1 is to reorient your Practice Groups to function as Quality Control Centers.  It’s already well-established that half the law firms’ practice groups underperform and those that are deemed “satisfactory” can do better.  Altman Weil’s Practice Group Performance Survey (2012).  So why not turn your firms’ Practice Groups into Centers of Excellence, keepers of the cutting edge of law and practice in their area?  Fostering a hotbed of collegial competition within the firm, Practice Groups should help lawyers stay ahead of the curve in their areas, sharing knowledge and perspective with one another, and thereby building your firm’s overall capability.

Then have all new work run past one of the appropriate Practice Groups’ recognized masters to ensure it is conceptually and strategically designed well from the onset.  After all, getting work right from the beginning will save time and money for both your firm and your clients by preventing major revisions and rework.  Then designate a few senior experts from each Practice Group to serve as Quality Reviewers, operating as the “second set of eyes” before key pleadings or instruments leave the office.

These two quality checks not only would be billable time, but most clients would welcome the investment.  “Companies simply have fewer dollars to spend on legal matters and therefore are less tolerant of poor outcomes and lost trials.”  See “Quality Control is Next,” my Oct. 14, 2012 blog entry.

Consumers who experience too many quality defects in the new car they just bought will switch car companies next time.  Your clients will do the same if the quality of your firm’s legal work disappoints them.  We all hate having someone else check our work.  But isn’t it worse to lose your firm’s reputation because your ego prevented one of your partners from sitting down with you and saying before-the-fact, “You know, I would have approached this a little differently.  Can I suggest you consider doing it this way?”  Which would you and your partners hate more:  having a colleague catch something before it goes out the door or having a judge or adversary pummel you with it later?

I’ll have more ideas about effective Quality Control in future blog postings.  Meanwhile, this should give you something to chew on other than Zoloft.

Posted in Practice Groups, Quality, Quality control, Reputation | Tagged , , , | Leave a comment

Quality Control is Next

When I auditioned law firms that wanted Procter & Gamble’s business, I always asked, “How does your firm manage quality?”  However, I never received a satisfying response.  The economy is changing that, and smart firms should be developing systems for managing quality now so they can stay ahead of the curve.

Although their demands for alternative fee arrangements gave clients some budget predictability, the continued weakness in the economy is pressuring them to go farther.  Law firms’ improved efficiencies resulting from project management and other methods certainly help address some of their concerns, but companies simply have fewer dollars to spend on legal matters and therefore are less tolerant of poor outcomes and lost trials.  The economy is making your clients more sophisticated in their demands for greater value from the dollars they spend on legal fees.

But law firm efficiency is so “2011.”  Clients now want to be sure they get high quality for the services they buy from you.  And as just reported October 1 in The American Lawyer, poor quality and service are major reasons why clients fire their law firms.  ow.ly/e9xfV

Whether your clients are health care providers, manufacturers, school systems, or restaurants, they are accountable for their work product.  Since they have methods in place to manage the quality of their work, expect them to impose similar accountability on you.  (Remember how your clients’ purchasing departments got involved with law firms a few years ago by demanding RFP’s and negotiating fee arrangements?  That’s when clients started treating you like their other vendors.  They’re not done yet.)

To manage quality, law firms have to develop systems that go well beyond the hoary fallbacks of just hiring great lawyers and following their malpractice carriers’ requirements.  There are as many ways to manage quality as there are to run a law practice, but every good system needs two elements:  methodically building quality into your work processes and checking output for quality.  While every firm I know does the latter, the big opportunity here is on the front end.  Having systems in place to make sure the work is done right (or at least done better) the first time reduces wasteful revisions and rework, saving time and money for both you and your clients.

So what do I recommend?  I have a number of ideas that I will share in future blog entries.  They will be methods you can show your current and prospective clients to address their concerns about how your firm manages the quality of the services they pay for.  These methods won’t necessarily be easy, but they’ll deliver more value than they cost.  And they’ll help your firm compete better for the decreasing client dollars out there.

The key element in all quality control methods is your people.  Watch this space for my next blog entry, or subscribe to my blog on the left side of this page.  Or just call me, and let’s talk.

Posted in Quality, Quality control, Value | Tagged , , , , , | Leave a comment