You gotta' love the "Ferengi". You don't remember them? One of the more memorable "alien" species on the now-defunct "Star-Trek Voyager" series (maybe they were on DS9, too, but I never liked that one). Anyway, the Ferengi. They were the greatest capitalists in the galaxy (at least in our quadrant). Not only were they skilled capitalists, but they had created an entire all-consuming philosophy centered around maximizing wealth. They were shameless. (God! I love those guys!)
Anyway, the Ferengi also had 600-some-odd maxims of capitalism (the "Rules of Acquisition"). One of them was: "Exploitation begins at home." I will take a pass on all the implications of this in the new paradigm of quasi-stay-at-home-daddies-turned-headhunters. Suffice it to say that the Ferengi had no problem taking stock of, managing, planning for, and retaining, everyone in their household. Everyone in the home was considered a part of the economic strength of the family. Which leads to the nice, soft underbelly of the overtly cold and calculating species--they really, really believed in family.
Contrast this to law firms. If the Ferengi considered family a business and business a family, early 21st Century law firms resemble little more than a confederation of squabbling city-states. Little cohesion. Little coordination. Little collective memory of past victories. Little awareness of current wins. Almost no thought given to making sure that those that do well stay inside the 'circle of life' (oops! I mixed a metaphor there--a hazard of watching Disney movies).
My point! I'm trying to make a graphic portrayal of the depths to which modern law firms have descended in terms of unity, team spirit and good old fashioned "us against them" attitude. Really! I can't think of another way to function. Remember those oft-cited "good-old-days" of "mastership", "apprenticeship" and its corollary, five-year partnership tracks? I didn't think so, those days died in about 1961.
Bottom line? With the "greying" of our workforce, the imminent mass retirement of our best law firm management, the inability of a majority of law firm partners to see beyond their own personal P&L, to say nothing of firm-wide success, firms are going to continue to see lower-than-par profits. Wake up, law firm managers! Your biggest challenge and your great opportunity is in front of you--take active steps to retain your talent, grow inter-locking rings of cooperation and team enterprise, and do your damnedest to make creative arrangements to hang on to that talent that is walking off the courtroom floor for the greenway. No, I don't know how to do that, but you can pay for that expertise. I'll bet you my next placement fee (just kidding) that it is a hellava lot cheaper to pay a consultant to figure this stuff out for your organization than to suffer continued losses in productivity and retention (don't you remember that $250K price-tag some firms are paying for EACH new associate?).
Anyway, over a series of many future posts, I hope to explore the potential for law firms to really maximize their intellectual capital. The big accounting and consulting firms are taking radical steps and giving plenty of thought and energy behind campaigns to retain what they can of an expected 12-15% turnover, a greying and retiring leadership, and overall a massive coming crunch in lost productivity due to a lack of sufficient talent. Click here to read a great article in The Economist re the same.
The bottom line, managing partners, is that the next 20 years are a gold mine of opportunity to position your firms to take advantage of the lead you have before the Chinese, South Asians, Russians, Southern Europeans, and everybody else finally catch up to the "West" in terms of quality of education and financial and management savvy.
The biggest challenge will be "acceptable" profits in the near-to-medium term. The bummer for those who really want to see excellence in this profession is that lots of law firms will be able to sustain "big" 1.0 to 1.5 million per year PPEP, when they could be ramping it up to 2.0 and 3.0 simply by putting into place more sophisticated management tools. This is a boon for management consultants, by the way (too bad I'm not one of those).
The reason this is bad is that it is going to allow the industry as a whole to sit on its laurels while international competition heats up and closes the gap. If we can to stay, as a profession, at the lead of the planetary game, we must take the Ferengi maxim to heart: exploitation begins at home!
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