"Some of My Best Friends are Women": Why The New List of Women-Friendly Firms is Irrelevant at Best

I think I might just scream if I read another vapid blog post in praise of the new list of 50 "woman-friendly" law firms (find the link yourself; if you can't, how in the heck did you find this site?). What rushes to one's mind upon reading the results, however, is that it becomes glaringly obvious that precious little of note is actually being said. Bottom line: Some firms have a (very) few more women than others. Some firms have better benefits that more often impact women than men. Some firms apparently have better marketing departments.

I mean, honestly, look at the numbers. The identified "top-50" have partner cadres comprised of about 10 and 20% women. You might notice that these numbers do not square with the near-ubiquitous parity of the two genders among the associate ranks. (Sorry, non-gender-specific individuals are not numerous enough to be ranked). So what precisely are we praising here?

Are firms to be commended for still having women vastly underrepresented among the partnership ranks? For that matter, is it particularly note-worthy that large firms have better benefits than others that happen to benefit women or "flex-time" types of both genders? Is it particularly praiseworthy that the more sophisticated firms are doing everything their poor imaginations can come up with to retain talent at any cost no matter what their genitalia? Given the consensus, among lawyers at least, that women are the complete equals of men in intellect and the near absence of fear left among male lawyers of female leaders, then I would have to say "no". These numbers are not newsworthy. At least not as intended.

What precisely then is this list supposed to tell us? Frankly, I don't think it tells us anything that we don't already know. Neither do I think the list does, will or should have any impact on female lawyers' decisions as to the best law firms to work for.

Let's face it, the real pioneering work for women in law firms has already been done (although many thanks to those women who did that work!). The next frontier for law firms is not whether or not women are practice group leaders, managing partners or anything else--the next frontier is not about gender.

As a recruiter, I can tell you that there is no resistance whatever in firms for women leaders. Rather, firms are screaming at me for more women. I just can't find them.

Of course, women are still self-selecting out of practice for lots of reasons. Not the least of these is the still-present assumption among women and men both that women get stuck doing mommy duty (and of course there's that little biological thing). Now, I do believe that there is plenty of work to be done in firms in accommodating a variety of lifestyles, and the part-time/flex-time/smooshy-time movement has a place in law firms. But I certainly don't give firms any credit for being no further along the curve than, let's say, your average corporate structure. Frankly, lots of men bail out of law for the same reasons that women do (at least this one did); it just doesn't get noticed.

Mostly though, firms just want you 28 hours per day, no matter what you look like. I just don't see how we can still call that a gender issue.

And I have to say, the race and sexual preference barriers have also been largely destroyed, at least in major markets. When the president of the bar association for the capital of the nation is an openly gay African-American (Melvin White, pictured), you know that we are in a whole new world.

That brings me back to the list. I'm afraid you aren't going to get me to jump up and down because a few law firms have a few more percentage points of female partners than others and that a few have gone to better consultants than others to adopt better benefits packages more favorable to women. This is news?

When you can find me 50 firms of 50 or more attorneys that have 50% women partners and 50% female practice group leaders, I'll deign to golf clap.

Immediately thereafter, I'll start asking you real questions, like about your firm's plan for growing its China and India practices and how many MBAs and non-lawyer strategists you have on staff.

The dialogue has moved on, folks. Tell me I'm wrong.

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update:

Does anyone have a high-resolution photo of Melvin White?

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Embrace “Dasein”: Heidegger, Corporate Existentialism and the New Millennium.

I would have to say that lawyers are, as a group, unconscious philosophers. Whether we recognize it or not, we carry out the scholastic tradition begun in late Antiquity and brought to flower in the much-maligned 12th Century of the Common Era. After all, lawyers read, reflect, critique, add and subtract to a living corpus of thought (the law), do so with an eye toward logic and tradition, and necessarily presuppose an ordered universe (or at least a universe emerging from chaos). Just like our hair-shirted forebears.

Lawyers as Rationalists

If this is true, then lawyers are, essentially, believers in “the rationalist” approach to seeing that world. That is, we read about, understand and view the world through the prism of analysis, reason and structure. We are thus “rationalist” philosophers who essentially see ourselves as separate from that which we observe.

Artificial Divide

In philosophical terms, lawyers have thus unavoidably divided the “subject” from the “object”; the viewed from the viewer. In other words, we see ourselves, as did Descartes, as ultimate realities in our own minds distinct from the phenomena of the world. We fundamentally and temperamentally agree with cogito ergo sum, which is to say that our fundamental, irreducible reality is the fact of our own thoughts, our own consciousness; all the rest can be done away with, and is ultimately unproven: fundamentally, then, it is not real. Therein lies the rub.

Really, Really Real

It is this very philosophical position (conscious or otherwise) that is hindering, I believe, the wholesale adoption of the management reforms, the global growth, the creativity in creating new legal products and new client partnership dynamics that are necessary to take the practice of law through the inescapable changes that new market realities demand. We cannot as a group re-conceive of our practice, our profession and our industry in new ways because the market “realities” are not “real enough.”

Managing-Partner Existential Angst

Any law firm leader worth her salt has seen legion articles, been to numerous conferences and had countless sleepless nights contemplating the challenges that face our industry. Most of these changes are bound up in the new reality of a one-world global market for legal services (as there is a one-world global market for everything else!). But the problem is, as just about everyone will agree, is that law firms will not or will not do so in the short term. They are stuck.

Fighting the Hypo

Specifically, and by way of example, lawyers, law firms, and even many of their consultants, are attempting to stick their collective heads in the sand about the massive capital investments that will be required to stay competitive in the coming two decades. Many lawyers still hold up the straw man of “law as profession” versus “law as business”, as if there were any vitality in making the two mutually exclusive. Some believe that facilitating larger firms is irrelevant because larger firms only correlate weakly with increased PPP, or that the capital infusions that could be made possible by law firm IPOs are unnecessary because no one will know what to do with the cash, or yet again that the globalization of firms is not necessary because firms can get along fine with just associating with a series of foreign “friendship” partners. I suppose reasonable minds can disagree on these issues—but that doesn’t make the other reasonable minds right, I’m afraid.

Breaking Free

What is the catalyst, then, that will allow law firms, and thus a critical mass of individual lawyers, to embrace the incredibly vital, exhilarating and terrifying opportunities presented by 21st-Century practice, and thus finally discard 19th-Century models of behavior like the old wineskins that they are? No amount of sermonizing will apparently make a difference. No amount of stating and re-stating the opportunities makes much of a dent on some of these Teflon minds. No reiteration of the economics involved can convince many that the market realities are realities that actually affect them, which in turn means THEY MUST ACTUALLY CHANGE.

Dasein: The Great Marriage of Phenomenon and Perception

What then? It goes back to fundamental beliefs, aka, philosophy. It is the very nature of the implicit philosophical bent of the “lawyer mind” that is keeping us as a profession from embracing all that is available to us. That rationalist bent that I described briefly above is to blame. It is that belief that we can analyze apart from the reality that gave rise to the analysis that hinders us. The antidote? Some good old-fashioned existentialism. We need to make the tectonic shift away from “cogito ergo sum” to “Dasein”, “being-in-the-world”, and “being there.” If you need a full refresher on existentialism, dust off your college-days copy of Heidegger’s “Being and Time.”

Briefly, this new paradigm sees the UNITY between phenomenon and thought. It advocates a perspective that there is no artificial disconnect between the world as it is, and how we perceive it. In short, Dasein is a construct that imbues our thought processes with an understanding of temporality: all things are moving, all things are passing, and we must be a dynamic part of that movement.

Get With the Program: Irrationality Is Part of the Equation

The upshot, the “bottom line” (horrid phrase) of all this is just this: we cannot sit back and wait for our logic to dot all “i”s and cross all “t”s. Rather, we must embrace the chaotic nature of human existence. We must be willing to engage with the world as it is: a fluid state of “absurdity” and non-rationality that the true geniuses among us truly grasp. And it is those geniuses that create new products, envision new needs, create new modes and means of interacting with consumers, and how consumers interact with their world. In short, we must allow our analysis to “be good enough.” We cannot wait for an historical precedent to validate our hunches—we must act on them!

Corporate Existentialism: Corporate Identity

And to get at those hunches, we must be “existential” as organizations. That means that as an organization (a particular law firm) we must determine who we are first and foremost (our strategic advantages in terms of product and service) and then extrapolate what we have been and what we WANT to be into that ever-changing milieu of the global—the universal—market.

If we can do that, if we can embrace that shift, we can get fully into the deep water, the center of the channel of our client’s world—and thereby also, not only become better capitalists and managers, but become better lawyers.

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Salary Compression, Lock-Step & Adding Value

I was intrigued to hear that Pennsylvania firm Fox, Rothschild has refused to raise first-year salaries to the new $140K market-rate. Of course it was their rationale that piqued my interest. Their refusal is based, ostensibly, on the rather boldly-obvious reasons that: 1) they didn't want to further impact their clients on rates; and 2) that the partners "had no stomach for the increase." No doubt. You've gotta give them credit for honesty.

Why Whine?

It is true that clients cannot be thrilled with the industry-wide raise in salaries. Still, clients as a group have been complete lambs about massive rate increases over the past ten years (well, basically) so I really don't see the point of drawing the line at how the most junior associates are compensated.

It is also perfectly clear that higher first-year salaries do not mean that all big-law lawyers are suddenly richer. Rather, of course, it means greater compression in the ranks: the difference between what a first-year and what a sixth-year makes tends to shrink for all but the very wealthiest firms (and it is pretty impacted even there).

Heresy

Where I differ with many on the issue is that I do not think this is a terribly bad thing, nor do I think that it impacts retention. Regardless, I think it is unavoidable. The real question is what the implications are for the practice.

The Rub

And the implications are these; the industry as a whole is moving toward a dawning realization that the value-added of any particular piece of hum-drum legal work (research, drafting, even arguing) carries with it only so much value. In short, legal work, or certain types of legal work, will be and are becoming commoditized. An expensive commodity, albeit, but a commodity nonetheless.

Not that firms will not pay more for higher-quality work (there will always be $400 per hour associates at white-shoe big-law and $120 per hour associates at small defense shops). Overall, however, we are moving away from a paradigm that values time-in-service. I don't think clients should be complaining necessarily that they are paying too much for first-year work (they always chew this down in terms of hours-cutting anyway). What they should be thinking is "why should I pay x% more for the fourth-year version of this?"

New Billing Schema

I'll cut to the chase. We are moving toward billing schema that value project billing over hourly calculations and we are moving toward ever-increasing squeezing of associate compensation at the top. The true (and basically only) dividing line in compensation will be between partner and associate. Thus, associate salaries will approach (although likely never reach) a single, austere plateau of hegemony.

The real, and only, interest will be in partner compensation. And by "partner" I mean to emphasize the "project manager" aspect of legal work versus those performing lawyerly tasks. Moreover, partners are going to stop wearing all three hats simultaneously (1: shareholder; 2: manager; 3: worker), and begin wearing just one or two at a time.

Parting of the Ways for Partnership qua Partnership

Thus, partnership itself will become more rigidly differentiated. Once we adopt the Clementi reforms, we will have (hat number 1) non-working and even non-lawyer "shareholders" who can't or need not practice (IOW income based merely on equity position will become a reality one way or another). Once partner compensation becomes more universally tied to aggregate, "team" performance, we will see partners begin to let go of billing for their own analysis and spend the bulk of their time keeping their fee-earning troops motivated and in line (in short: truly managing as a primary function) (IOW, hat number two). Finally, we will see a distinct minority or partners who continue to bill out their own time as high-level strategists (hat number 3), but their compensation will be far beneath that of their colleagues, except for a rock-star few.

Thus, the triumvirate of phenomena: increased salaries for junior associates, compression of associate salaries overall, and the realization that the true value-added kicker in terms of chargeable rates wil be the management of legal work, rather than the 'mere' performing it.

To all the Fox, Rothschilds out there: rather than worry about the impact on your clients of higher compensation for your junior associates, worry more about attraction of talent in the first instance and how your overall billing scheme fits into the new, coming paradigms.

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Associates: They "Know Your Name"- "The Odds Will Betray You!" (or "How To Navigate the Interview Process Unscathed")

Casino Royale is my favorite action movie of 2007. The new James Bond is smart, fast, strong, ruthless-and a hacker. He jaw-droppingly pierces the veil that surrounds the pompous and pampered but no less hard-boiled "M," breaks into her penthouse condo, steals her cyber-identity, and uses his ill-gotten gains to catch the bad guys. What a guy!

Perversely, movies like this give the lie to the notion of cyber-security. It doesn't take a James Bond-or even an MI6 dropout-to ferret out secrets...your secrets. If you think you have craftily hidden something during an interview or hiring process, I'm afraid the odds say you are wrong--dead wrong. The odds will betray you. You associates need to read the below to get some perspective. You partners and law firm managers should scan this as well--you need to get a read on what your potential associate hires are facing.

Angels Fall from Blinding Heights.

Okay. What you need to understand first and foremost is that you are your own worst enemy. Most fibs about background are unearthed by the culprit.

I once had a candidate who flubbed an otherwise-terrific interview at a fabulous firm because she lied about completing a CLE class, of all things! The firm couldn't have cared one whit whether she went to that darn class, but it did care very much whether everything on her resume was correct-100% correct. How did she get found out? She made a slip of the tongue in the interview. The inconsistency was as plain as day.

This is common-common!-folks. Take it from a professional recruiter who does this for a living. Moreover, your grandma was right; it is easier to tell the truth than to conceal a lie (even if it's only a "fib" or a "slight gloss on the unvarnished truth"). You can never anticipate all the ways in which misinformation can come up. Don't bother. Don't fall off the "blinding heights" of the moral high ground.

No One Else Here Will Save You.

Now it's time to really understand what your employer's background check will, and will not, uncover. In the legal arena background checks are actually quite limited. Generally, due diligence (other than review of documents you yourself submit) will only consist of the following:

• verifying your admission to practice law with the appropriate state bar(s);
• sending you through a gauntlet of interviews with between three and as many as 12 attorneys in the firm (nice, that!);
• a heart-to-heart with your recruiter, if you are using one;
• perhaps a criminal background check (not even standard); \
• a call to one of your references (who must be a lawyer at a law firm, by the way-preferably, and sometimes exclusively, a partner).
  

Of course, law firms feel pretty safe knowing that (at least if you were admitted in California) you've gone through the fairly rigorous background check that the state bar put you through as you exited law school. But any nasty little secrets beyond that point won't have been caught. Neither will firms have conducted credit checks (which, actually, they really should do).

The bottom line is that the formal process is not terribly daunting, assuming you can handle your own references (which a surprising number of people do not adequately prepare). On the other hand, you can do quite a bit to ensure that the process goes smoothly.

A Spin of the Wheel.

The biggest wild card in the entire process is your reference. It is amazing what indiscretions will be allowed to slip into that one phone call between your reference and the hiring firm.

First of all, these folks will not be contacted until after the firm has already, or already nearly, decided to extend an offer. They just don't take the time beforehand.

Sometimes even well-meaning references will inadvertently say negative things, usually in the form of left-handed compliments such as "Johnnie has done really well, considering his rocky start." Priceless. Here is what you must do when selecting and preparing a reference:

• Call your reference ahead of time to ask if s/he will serve. (Yes, I know this is basic. But people fail to do this all the time. You must first ask the reference if s/he will be so kind as to serve as one.)
• Ask your reference if s/he can give you an "unqualified reference." I put that little two-word phrase in quotes for a reason: use it and no other. What this does is put the reference on notice that s/he must not say stupid, backward, irrelevant, or in any other way less-than-stellar things about you. Usually a reference, when asked this in a point-blank fashion, will say "yes," even if there is some tiny little part of his or her mind that thinks you have chinks in your armor. There is social pressure to acquiesce to requests. This will also ferret out the posers. When confronted with such a request, a few references may back out. They won't say, "Darn, I could give you a lukewarm reference, but 'unqualified' is too strong a word." They will say something like, "Well, our policy is that I really can't give out references. Maybe I'll have to get in touch with HR." No thanks. Don't bother. They are telling you that they won't do such a thing. Find someone else. Fast.
• Don't ask over and over. Asking once is sufficient. Once you know that your prospective firm is actually going to call a reference (meaning it's actually asked for one-because you should never volunteer references at the outset), leave your reference a friendly message informing him or her that so-and-so from blah-blah law firm will be calling to ask for a reference. "Just a heads-up!" That's plenty. People do not like being asked more than once. (If you have kids, you are smiling right now.) Plus, asking again just gives your reference an opportunity to back out. You don't need that.
  

When The Storm Arrives, Will You Be Seen With Me?

While most layers are not adept hackers, they can, amazing, read, and browse the internet. That means they know how to use "Google." Astonishingly, they even know that lots of attorneys (in some silly fit of willful ignorance) put their weirdest secrets on "Facebook" (by the way, do you think recruiters don't know you do that? get real).

The Coldest Blood Runs Through Our Veins.

Remember that law firms are businesses first, second, and last. They have procedures for a reason. They don't deviate much. If you as a candidate give them any excuse not to hire you, they won't. There are quite simply too many fish in the sea--even during a strong market (which we now have in California, at least). This means that you must be honest about verifiable facts and you must prepare your references to ensure everyone is "on message."

However, there are things that you do not need to tell your prospective employer--and that you shouldn't. These include various subjective reasons you left your last firm. As far as I am concerned, there is really only one acceptable reason that you left your last firm: the firm or practice, while it initially made perfect sense, later changed and was no longer fulfilling your professional goals.

If you please, read that sentence one more time...it implies a lot. That statement implies you are a sure-footed, right-thinking, rational professional. You have overarching goals, you evaluate options based upon them, and you constantly update your analyses to ensure that you are always on path.

For a few good and solid-sounding reasons, your last firm was no longer on path. If you need to dig around to figure out some great-sounding reasons, call a professional recruiter. He or she can help you dig down to your own true professional goals and figure out what really went wrong.

What you cannot and should not tell your next employer are reasons for leaving that have nothing to do with your professional plan. Moving because your girlfriend got a whim to live somewhere sexier is not a reason. Neither is wanting to be closer to Mommy and Daddy. Neither is wanting a fresh start because you ended up alienating every single lawyer in your past firm. No. A thousand times, no. Read my lips: it is all about the work.

Once you get inside the firm, of course, it's a whole other game. I'll leave you with my favorite part of the lyrics (snippets of which I presume you figured out have been used above as headers):

If you come inside things will not be the same /
When you return to the night /
And if you think you've won /
You never saw me change /
The game that we all been playing!

ttfn.

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Gödel, Escher, Bach: Out of the Refuse of Meaninglessness and Despair, Build Your Own Golden Braid

Law School was an epiphany for me. I experienced a secret, shameful joy at finally realizing what I had suspected all along in my then-young life: our language, seemingly so solid, so understandable, is built on shifting sands of fluid assumptions that no one can pin down. It was a blessed relief to finally accept that nothing I had ever known had any substance: words, after all, have etymologies (histories), but no definitions. For some, however, the tearing down of their paradigms was a crushing blow.

Blame Socrates

Don’t give me that: you and I know full well that our torts professors were hard pressed to put meat on the bones, as it were, when discussing “proximate cause,” “cause in fact,” “reasonableness” or anything else. This is why the Geneva-convention-violating mental torture that is the first-year of law school is called “the Socratic method.”

Yes, it was the sartorially-challenged, pig-faced philosopher of the preceding era that finally woke us up as an intellectual community to the fact that no one can sufficiently define a damn thing. What is “honor” anyway? What is “evil”? What is “good”? All of these words carry huge stores of collective imagination, but they are perniciously resistant to specificity. In short, our words appear to have real meaning and specific references, but in reality they are little more than shorthand for clap-trap piles of images, emotions and memories—no one can agree on what they really mean.

Ditto The Practice of Law

The same is true for our professional lives. We are paid by our clients to navigate the waters of the treacherous, labyrinthine locks of the legal system. We are charged with explaining a conceptual framework that is ever-changing, with its own vocabulary, and one that more closely reflects the paucity of meaning that our language necessarily carries with it than the layman is comfortable, or capable, of understanding. Not only this, but we must also navigate the troubled waters of building a practice.

Yes, And Our Business-Building Too

And the practice itself is fraught with difficulties. We are asked to create a synergistic vibe that will suck in business, fees and adulation, and pour out pristine written product and oral gymnastics. We must market, write, cajole, woo, manage, politic, strategize, hypothesize, inspire and command.

There is a reason why there is an entire industry of gurus whose function it is to explain again and again and always in new ways, what precisely all these tasks really are, how they are to be performed, how they are to be understood, and how they are to be communicated. In short, not only our legal vocabulary, not only our procedures, not only our practice, but our entire professional lives are themselves edifices built upon, and with, stones that in turn have no meaning, or meanings that we can barely understand, much less agree upon.

And yes, folks, that is a good thing.

The Golden Braid

Twenty-five years ago I had the pleasure and challenge of reading Douglas Hofstadter’s Gödel, Escher, Bach: An Eternal Golden Braid. Published in 1980, it was the darling of the intelligentsia for several years. It is an intriguing book alternately as clear as crystal, and murky as mud. I’m afraid it is also at times as “turgid and confused” as J.S. Bach’s music was accused of being centuries earlier. For me as a 9th-grader at the time, it was exhilarating.

The book’s title names three pre-eminent geniuses: J. S. Bach, M.C. Escher (you remember, he drew the photo at top, famous for depicting the physically impossible), and Kurt Gödel (the famous 20th-century logician). The book is worth the cover price (still in print) just for the exposition on the work of these three subtle minds.

But the point of the book is far more ambitious than a mere recitation of the virtues of three dead white guys. Rather, Hofstadter tries to communicate in fable, analogy, statistics and dense prose, that it is possible—nay, unavoidable—that our most treasured beliefs, ideas and constructs are based upon building blocks that cannot be defined, that are self-referential, in short, are “loops in logic.”

We Just Can't Help it.

By means of these three giants of thought, Hofstadter helps us to see the power, beauty and vitality of living freely and fully in the world of ideas: there we are unfettered by the need to nail down every hole in reason. The world as humans perceive it does not consist in unalterable truths, but rather in powerful ideas full of rich and ineffable meaning, built upon perhaps shameful, ugly and sweaty lapses in logic and un-pin-down-able truths.

The upshot? Life and sanity are to be based, quite probably, on constant movement. Bach’s music only makes sense when listened to as intended; upon analysis and examination, it is hopeless confused. Escher’s drawings are to be enjoyed for the mind-bending quality, not torn apart pixel by pixel. And last, the world of logic as illuminated by Gödel is a process, but based upon un-provable hypotheses.

The Moral of the Story:

The injunction: go with it. Take the meaning you have in experiencing the whole, and fret not about the messy underbelly of the details. Learn by doing.

For me as someone who has lived in and now serves the legal profession, this is a very pivotal idea. As I mentioned above, attorneys are faced with a life’s work based on explaining the unexplainable, and with creating a practice based on activities that no one can actually pin down the secret of success to. All that remains is to move forward, to run with your current opaque understanding, and find meaning and even joy in the race.

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Keep Associates and Keep them Happy: Start Grading Partners on the Curve

It is axiomatic that associates are tired, frustrated and ready to walk at a moment's notice. Many commentators have warned that the sky is going to fall on the profession if we can't as a group figure out how to make lives for lawyers more bearable (read here and here and here). And yet, of course, the world keeps right on spinning and lawyers keep right on billing. I think there is no danger that the "legal market" as such is going to implode, but it is true that many firms are losing profits needlessly and that many poorly-managed law firms find themselves either facing extinction, absorption or reduced greatly in prestige. To bring it closer to home, just how much is your firm spending for every instance of associate turnover? That's what I thought. What to do?


Well, there have been many well-meaning folks who have tried to preach the gospel of basing partner compensation on soft factors (you know, time spent mentoring, 'team-player' attitude, pro bono work). Trouble is, the only way to make these work is to have highly arcane and individualized compensation structures that tend to breed discontent and rightly so: if you are going to infuse a rational process with subjective standards, you are going to get irrational results and decreased loyalty and morale.

Moreover, everybody knows about (and I constantly harp on) the need for law firms to incorporate some of the more modern and humane management principles long-ago adopted (or at least embraced) by the business world. Where is the nexus?

I'll tell you, and this should be easy for a law-school-survivor to figure out: start grading partners on the curve.

Now I'll tell you right now I do NOT mean these "360-degree" reviews where associates colleagues and practice group leaders alike get to weigh in with more subjective talking points. (Those are fine for identifying the "screamers" but I don't think they are an adequate tool for judging productivity). Rather, we need to start making equity partner compensation based solely (or very largely) on the gross revenues and profitability of his/her team.

Here's my analysis:

1) We need partners to be motivated to do whatever it takes to retain their associates and non-equity partners (of counsels, etc.). We all know that simply raising associate salaries in lock-step or otherwise will help (and lock-step is better), but does not fix the problem. The "whatever it takes" part means actually spending time with individual lawyers in the firm mentoring them, helping them improve their work, motivating them, socializing with them. There is no substitute for this work. And I'll tell you that every single new lawyer wants this and says so--the rest just want it but don't bother saying it anymore, even to themselves.

2) To do this, equity partners must go back to the days of high associate/partner ratios. To be clear, that means more bodies per equity partner. Any decent economist--and lots of economists with JDs and a law firm practice behind them--will tell you this. So why does it not happen? Well, the partners on the ground say it is because their clients want to see only senior people working on their cases given how high rates are. I think this is bunkum. Clients will be happy if you give them high value for money. Giving them high value for money in part means paying high dollar for high-value (strategic) work (partner work) and less money for grunt work (research, run-of-the-mill hearings, drafting contracts). No, the real reason partners are hoarding work is that they are desperate to cover the tracks of their inability to lead associates and build a team. That, and the fact that law firms aren't universally compensating them for their aggregate billings, or it is difficult to assign things appropriately.

3) People will work harder, longer, and better when they feel part of a group that gives them esteem. Building teams means that people actually have to work together. This means that they don't operate as free-lancers ready to take whatever comes along. Thus, associates' time should be monopolized and assigned to a single equity partner. I can tell you that associates will grumble far less about working weekends when they know: a) their partners actually notice they are there; b) their partners are actually invested and investing in their professional development; c) they know their partners and know that the one's future is all tied up in the other's. The much-vaunted benefits of associates working for every tom, dick and jane in the firm are over-rated: this is just more "non-learning", but with more people involved in the confusion, and with loyalty and connections diluted.

4) Further, equity partners must be compensated solely upon the effectiveness(revenues and profitability) of their individual teams. This is going to force partners to spend more time hunting down that work, yes. And it is going to force partners to spend the time keeping their team motivated. In short, it will help partners actually take the time to educate themselves about management principles, rather than just review memos and to their junior partners' and associates' work for them.

5) Partners must be "graded" (compensated) relative to each other. We need to break out of the miasma of accepting "ok" profits and force equity partners to innovate in terms of emotional-intelligence (human management) skills. To do that, we are going to have to continually compensate partners relative to each other in terms of team revenues. And I don't care if one group has different rate sensitivities, etc., etc. The presidents of small divisions at huge multi-nationals do not get compensation the same as large ones. Get over it. The point is that partners will work toward high compensation as a group. To do that, we must force them to spend the time and thought-resources strategizing how to maximize their team's overall productivity. They cannot be spending 75% of their time doing traditional billable work. That is insane. If they know that the financing of that Jamaican beach-house is tied to how effectively they can actually manage their subordinates attorneys, and that there is NO WAY that they can personally bill themselves out sufficiently to do it--they will actually start thinking about building their teams.

Conclusion

If we want law firms to enjoy greater stability, better profits, world-class management, high retention rates and overall a higher-quality service to their clients, they are going to have to start treating equity partners as VP-level business managers. Practice-group leaders and regional managing partners are going to have to start acting like company presidents, and managing partners as CEOs. Team-building is essential. Mark my words, firms that refuse to adopt practices that will reward partners--on a rational and consistent basis--for overall productivity will fall in prestige, size and profitability relative to those that do.

Have a great rest of your Monday!

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Corporate America Goes to Kindergarten: Why Being "Nice" Could Get You To the Next Level. Really.

Now I usually do not get all dewy-eyed about the virtues of "nice"ness; in fact, I usually hate the word (just what is "nice" anyway?). But the verdict is in: nice makes might. Or so says Marshall Goldsmith, counselor and coach to the high and mighty in the corporate world. That's right. Big CEOs with bigger private jets are paying six figures to hear what I'm about to tell you, and what you maybe could figure out for yourself if you really thought about it, and what you ought to have learned at your mother's knee: that leadership involves putting the golden rule into practice: listen, temper your ego, and resist the urge to demonstrate your wonderfulness at every turn. Of course, you have to be Marshall Goldsmith to get paid to say this stuff. But don't get me wrong, far be it from me to diss anybody's gig (glass houses and all that--I'm a headhunter, remember?). Anyway, I think he's got a point worth saying.

Goldsmith's book, with the snappy, most-modern, haiku-like title "What Got You Here Won't Get Your There" (hey, at $24.00 a bargain over his usual fee!) lists 20 lessons for staying at the top, and then getting to the "tippy-top" (what else should I call it?). Never fear! My read of Goldsmith boils them down down to just five. You can read all 20 on your own time. Here we go:

1) Get over yourself. Stop trying to INCESSANTLY prove how wonderful, brilliant and sexy you are (that's what blogging is for). Subordinates, superiors and laterals alike really could use a break. Yes, yes, we must learn to promote ourselves, but that doesn't mean that every single conversation needs your last word, not every memo needs your little extra edits, not every proposal needs your revisions. Be judicious, in other words, with your glow: not letting the other children play and shine once in a while destroys morale and makes you look like the Machiavellian narcissist you really are (not that there's anything wrong with that).

2) Don't be such a jerk. Yeah, this needs to be said. As Goldsmith so succinctly puts it, the question is NOT "It is true?" but "is it worth it?" Interesting.

3) Try being positive. Um, this is more pleasant for everyone. It is amazing the capacity for humans (sorry, in my experience, especially lawyers) to believe that their negative take on all things is actually interesting, impressive or otherwise tolerable. It is not. Your secretary knows this, but s/he is paid not to say it. Thus, try to make affirmative statements. It won't break your face.

4) Grow up. Mature adults do not blame others for their failures, act appropriately by not playing favorites and not sucking up and actually apologize when they err. Amazing, but true. They also realize that supreme "self-actualization" is the sister-city of megalomania.

5) The past is the past. Get over it and move on.

I somehow get the feeling that if I had written the book, it might not have played so well. Regardless, the important thing is that after all my railing against the lack of management sophistication in the law firm world (here and here ), it turns out the regular corporate guys are similarly challenged in the "act like a grown up" department. Just like us.

The upshot of all this is that these seemingly innocuous tips really can, and really have, made an impact on the careers of high-powered managers. Apparently you can go far by running rough-shod over others, but when you get to the upper levels of management, it suddenly matters to actually exhibit real leadership skills. Just like in kindergarten.

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Law Firm IPOs--The Great Equalizer?

The only law firm economics specialist I know of is Bruce MacEwen. His opinion of the utility of the much-mentioned but little discussed Clementi (non-lawyer ownership, read: corporate-style reforms, is that the large established firms don't need them: don't need the capital, don't have any trouble expanding when and where they want to, don't need more money for infrastructure. Pause. I find this difficult to believe, but then, I'm not an economist.

On the flip side, regional and "consumer-oriented" (read: personal injury and other mainly contingency-fee firms) do need all these things. And an IPO can give it to them. I'm sure that none of the AmLaw 100 firms are worried about PI firms getting more cash--the two groups move in askew lines. However, on the margins, I see this as a huge tipping point.

What about the smaller national firms, or the larger regional firms--isn't capitalization a large issue for them? Couldn't an additional tidy eight-figure sum mean the difference between expansion and retraction for them? Thus, I see the possibility of law firm IPOs as simply the next logical step in the "arms-race" for market dominance and, for that matter, market survival. As the philosophers say (at least the ones I like) and as the savvy money managers say (I now read the Accentureand Wharton on-line resources, too) life/survival is all about growth. If law firm IPOs are going to mean the ability of a large swathe of firms to expand--and potentially "take it to the next level" in terms of national or regional expansion--this is going to have real impact on growth and for that matter retention on the part of ALL firms--large and small.

I think whether or not IPOs could have an immediate impact on the big-law types, such firms are going to be hard pressed to forego the possibility once the kinks get worked out (yes, and after the rules get re-written). If they do forego, we are going to see the IPO used as an offensive weapon to create far more competition for partner attraction at the just-below-first-tier. And that potential for greater competition and thus playing-field-leveler, is a good thing.

To boot, it doesn't appear that a law-firm IPO would necessarily have much negative impact on a partnership in terms of productivity, focus, etc. If we take the words of the MP of the first law firm to do it, it is as easy as falling of a horse. Read MacEwen's interview here.

The bell has been rung.

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"This world is the will to power--and nothing besides!"--Clementi, Psycho-Babble and the Need for Transformative Leadership

Ad Arguendo's new tag line is "the blog of law and leadership". I came up with that after agonizing over how to work through a new post on the "Clementi" effect that is creeping up on us (if you don't know what I am talking about, heaven help you and click here). I was trying to figure out what I could usefully add to the conversation that might be more articulate than: wake up! this is happening! US firms are going to be caught with their pants down while their European counterparts use new-found billions to outflank them in infrastructure and new platforms! I still think that pretty much sums it up--but that isn't what I was going to write about today.

Psycho-Babble Quip of the Day

No, my rant of the day is a little more abstract. Yes, more. As a good little disciple of Bruce MacEwen, I dutifully rushed over to his blog this morning to see what might have fallen from his lips. As usual, it is spot on. If I may, I'll clear up a little of the underbrush.

What law firms need, right now--today--is a new paradigm of growth, a new paradigm of what it means to practice, a new paradigm for exploiting resources. And that paradigmatic shift is: synergy, openness, responsiveness, dynamism, quest for dominance.

Nietzsche said it well when he opined on what "life" is (paraphrasing): an instinct for growth, for power. To date, lawyers have been quite sweetly (bless them) thinking in terms only of an individual practice group here, a new platform there. They have not (as a group) been strategizing how each can dominate a particular market, how they can become the greatest and largest in a particular niche, or better, how they can revolutionize a practice qualitatively, how they can reinvent what the attorney-client relationship means in a particular industry. In short, they are small thinkers, not big thinkers. They have failed to grasp that strategic thinking means a constant evaluation of what one has, what one has done, what one wants to do, and an open eye to the possibilities great and small.

Tactics versus Strategy

Said another way, there is a lack of understanding between the "tactical" and the "strategic." As a former soldier, I understand it well. "Tactical" and "tactical proficiency" mean knowing how to do one's job--knowing how to move on the ground when trying to reach an objective, knowing how one's enemy on the ground was likely to move and figuring out how to respond. This is the extent of most law firms' thinking: they are good lawyers and strive to be better and exploit the markets that come to them.

You Know it When You See it

But there is the second way of thinking--strategic thinking. This is one of those "you know it when you see it" kind of things. Strategic thinking is what those scary wonks in the basement of the Pentagon are doing--thinking three wars ahead, figuring out how to use weapons that haven't been invented yet, making scenarios to fight enemies that have not come into ascendancy. On a level a little closer to home: they are listening in not only to their current "targets" but every target they can think of. The strategic mind is one that is always listening, always seeking new information, and always integrating the new information into what is already known, striving to expose the mind to everything, in all areas, in short, to see the world, humanity and everything in an all-embracing vision of ultimate complexity.

Breaking it Down

Huh? I can tell you, that is what genius is all about. That is what Steve Jobs and the other wonder-wizards of our age are doing. They are taking it all in and they are thinking of entire new products, entirely new needs, completely tangential paradigms. In short, they are not just just making better beans, they are inventing new crops, reinventing how to farm them, reinventing how to eat them, reinventing what "food" is.

WHAT DOES THIS MEAN FOR THE PRACTICE OF LAW?

It means actually "seeing" what is hidden right in the open. Just for starters: All of our nation's former enemies are now economic partners and competitors. The world exists in a free-form exchange of capital unfettered by political necessities. Smaller nations, nations with few resources, and seemingly little savvy, can leap-frog over the powers that be. Plus, all of our "conventions" of practice (like no non-lawyer ownership of firms) exist only in our minds--they can be changed in a trice. That means that despite the growing hegemonic dominance of American law firms across the globe, anyone can change the rules. Law firms need to hire bigger brains, craftier brains, non-legal brains, to help them join the 21st-century in terms of management savvy.

Be That One

If you think for one minute that the world is going to wait for us to deign to grow up as an industry, take the reins that our head start have placed in our hands and then dutifully fall in line behind us, think again.

Think strategically. If you can do this, you will be ahead of 999 in a 1000 souls. Be that one.

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"Mission" Trumps "Marketing"--Law Firms & Lawyers Need To Get to the Heart of Things Before Making Their Splash

Ubiquitous Marketing.
Clearly the premier law firms are getting on the marketing bandwagon. They now have professional marketeers, image consultants, not to say bone-rattlers and entrail-readers. Plus, I as a headhunter for partners and associates alike encourage individual lawyers to be continually branding themselves in their markets and communities, even if they plan to stay put--one always needs more visibility.

Garbled Messages
On the other hand, one must take care not to get lost in the shuffle--the "message" can begin to run rough-shod over the reality. I see firm websites that tout image, ethos and even practice areas that don't fit, aren't believable, and just don't plain fly with the history, present tense, or even honest aspirations of the firm. It pays to do one's homework first.

Process over Product
One useful way of getting at what "message" to put out there is to take full stock of what the firm (and/or individual lawyer) already is, already values, already believes. This sort of taking stock is the conceptual framework for a professional plan. The term "professional plan" is thrown about quite a bit, and it is something of a misnomer as it describes only the end-result of the true point of having one--and that is the exercise of putting it together.

A Better Paradigm
The huge caveat is that the first part of creating such a plan is the most important, and that is the identification of the values, skills, assumptions and drivers that already exist. The goal is not to rush to conclusion, but to embrace the questions for a while, kicking around the ideas for long-enough, and coming to some honest appraisals of where the firm stands already. Really, a better paradigm than "professional plan" might be a "personal constitution."

"Constitution"--Drill Down then Work Up
We as Americans find this a potent analogy. Our constitution is all about stating core beliefs (e.g., freedom of speech is essential), irreducible assumptions (e.g., all men are created equal), and cultural/sociological/practical realities (e.g., long-standing practice and enshrinement of the separation of powers). Something similar has to happen when firms get together to decide how to better exploit their markets and take advantage of opportunities--or just get a better PPEP. This gut-level and very hard homework is essential to success in that endeavor.

Grass Roots Stronger than Ivory Towers
And another thing: A firm "constitution" cannot be something that a committee cooks up with lots of cool PC soundbites and marketing glitz. It cannot be created out of whole cloth and then shoved down the throats of the rank and file. Rather, it must reflect and honest history, an open appraisal of current realities, and be the product of a gestalt, a process, of continual discovery and renewal of the firm's goals and strengths.

Full Circle
A parting shot: don't think these issues are just "airy-fairy" 21st Century post-modern psycho-babble--these issues have been thrashed around for centuries. Political philosopher Joseph-Marie, Comte de Maistre (a fairly notorious anti-democratic figure writing in the aftermath of the French revolution) scoffed at the notions of written constitutions--and for the same reasons. He feared that "constitutions" (at the time a new-fangled thing) would invariably be irrelevant as the true body of law of the land was contained in the hegemonic assumptions held dear in the hearts and traditions of the people as a whole--and could not be contained on a mere "bit of paper." I fear many firms' strategic plans are similarly not worth the "parchment" they are written on--but they could be.

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Fire At Will! Lessons from Jack Welch

My wife and I both love biographies--the only difference is that she actually takes the time to read them. I just go on about them. At any rate, one biography that I got roped into actually reading was that by Jack Welch, GE uber-CEO and dynamo (Straight from the Gut). I can tell you--the guy is a son-of-a-gun. But you knew that.

One theme that comes up--let us say, about 37 times in the book--is Jack's unabashed and ruthless relish in firing people. It seems nearly every step of the ladder up to the corner office (hell, the corporate jet) was littered with bodies--and lots of them.

Not that there's anything wrong with that.

Indeed, Jack had the right idea and I'll tell you why. Jack believed that the best way to get the best organization imaginable is to get the best people in place. Whenever he took on a new division or project, he always went in with the idea that he would do WHATEVER it took to get the best brains, the toughest minds, the biggest muscle he could find to trounce the competition.

On the other hand, lots of these 'firings' were mutual. Jack would go in with his usual two-fisted approach to management. He would insist on seeing the books--all the books. He would ask rapid-fire questions about details, about big picture, about everything. And he actually expected answers. Lots of people just couldn't hack it--they left. Plus, even if folks had difficulty performing, Jack would come to a mutually agreed-upon plan and give the guy a couple of quarters to start MAKING PROGRESS toward the goal. If there was no progress, the guy was out.

I hope I don't have to remind you just how successful GE has been under his leadership. Read the book or go find a stock analyst. The point is that Jack's ebullient and frankly hard-ass approach to management got him tremendous results. AND IT BUILT A STRONGER COMPANY TO BOOT.

Law firms can't afford to take quite approach; talent is so scarce and firms don't have the economic or contractual or other incentives to keep an organization strongly together. Mostly though, I think they just don't have the guts. It might not be fair to say so, as those who are successful as attorneys perhaps do not have the temperament (generally speaking) to take such forthright and direct action. I can tell you, though, that once law firm finally make the mental switch to corporate leadership versus old-styled "partnership" co-leadership, the heads will start rolling far more quickly.

Your best bet in anticipation of this perhaps startling but inexorable trend? Start pushing yourself now to be twice as good as you were last year. Maybe if you bust a gut, or two, you'll stand a chance in the new world. Welcome, folks, to the real 21st Century.

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Followers As Leaders: The Juxtaposition of Swarm Theory, US-Style Corporate Management and Cutting-Edge Law Firm Practice

Executive Summary:

There is a tremendous new opportunity for law firms, if they can get their collective brains around it. After reading MacEwens’ review of Wharton’s new “serial-monogamy” CEO model, and Bilinsky’s re-dux ("Bees Rule") of cutting edge “swarm” management theory, I’ve come up with a nascent idea for a new law firm management model that could very well ring in a new golden age in the field, to wit:

A co-leadership model that incorporates the best elements of 1) hard-charging corporate-America-style CEO mentality, with (2) the cool, consensus-building model of (the again) American-styled corporate board of directors, but yet strengthened by (3) the traditional law firm model where senior “sales” managers (practicing partners) decide the direction of the firm.


Let’s review the facts . . .

 The pressure on Managing Partners (MPs) to demonstrate the management savvy of corporate America is growing. MPs now know that they basically do not have the skills to run huge multi-national law firms by virtue of great law school grades and an IV league school. They need real, high-quality training (Wharton or Harvard MBA, anyone?). Suffice it to say that there is a skills gap in upper law firm management. I note legion sites, ads, non-profits, etc.: all of these want to help educate MPs in the doing of their work in light of this new expectation. Firms themselves are starting to put their money where their mouth is. Believe me, it is slow going.

 The legal industry in the US is going through tectonic shifts: it is adjusting to the conflation of US markets—to the realities of pressures put upon them by their corporate clients to serve all of their needs everywhere, and thereby increase footprints not only across regions but across continents and the globe.

 As the legal industry wakes up from its (frankly) embryonic sleep-before-a first-awakening, firms are all over the place. Not only are firms in various states of development by virtue of their start-dates, but they are also in different states of being vis-à-vis their ability and desire to acclimate to global corporate needs. Further, there is a huge variation in the way in which firms differentiate themselves by virtue of the fact that this industry does not yet follow a single path—the world is too new to law firms (frankly) and there is no path to tread. Firms are basically making virgin tracks in uncut prairies of opportunity.

 Therefore, firms are going through numerous transitions simultaneously and also in very quick succession. The upshot is that firm’s strategic needs/foci change quickly, and more importantly, change radically (and for good reasons).

 Thus, the pressure on firm leadership, MPs, to pull rabbits out of hats a la bigwig corporate CEOs is breaking upon the scene and growing. The role of the MP and of law firm leadership generally is far more important that it ever has been before.

 Compounding this pressure is that partners have traditionally not been trained in management, have not truly managed large enterprises, and do not necessarily have the temperaments and skills to do this work. They are shooting in the dark with unknown, sometimes still half-formed weapons, made by hand, with no guidelines, with no clear targets, and often with their partners using their own weapons all pointed at or near each other.

 Moreover, it is a sociological “fact” (to the extent they exist) that individual managers can only bend so far. It is the rare bird that can operate under two totally different sets of expectations, and pull off successes. This is because most people are not sufficiently developed to contain more than one framework of attitudes toward their work. Moreover, few can act outside their natural tendency. To quote "father" (Abraham) Maslow “to him who has only a hammer in the tool kit, every problem looks like a nail." Thus, there is a need for highly-productive and effective working groups to adopt more "hive-minded", decentralized approaches to problems that don't mindlessly trust a monolithic leader to get them out of trouble (click here for more on that one).

 This is the rub: we need strong managers, but we need precisely the right one—and who that person is may be different 18 months from now, and 2 years or even 12 months after that.

The Solution—Followers As Leaders: Co-Leadership and a Friendly Revolving Door at the Top

Thus, here are the rough components of what I propose:

 In agreement with David Nadler (CEO and consultant extraordinaire) (and in disagreement with MacEwen) we need to accept and embrace the idea that law firm Managing Partners need to be called upon to perform specific “tasks” or help firms through specific transitions, and no more. There should be no expectation that a particular MP is or ought to be fit for all phases in a law-firm’s growth. Two- to three-year stints should be plenty long in this model. For this reason, we should redisgnate MPs as CEO’s—this might help undo the traditional prestige end “terminus-point” mentality that the term MP implies. The point: a firm CEO is a co-leader, called upon for a particular task, and expecting to turn the reins over to another partner (or outsider as necessary) based on the needs of the firm.

 Institute a corporate culture of strong consensus-style law firm governance. Basically, firms need strong “boards of directors” whose job it is to identify issues, strategies, challenges, etc., and determine which particular opportunity needs most to be addressed. This, combined with the selection of a law firm MP (CEO), should be their only function. The other duties currently carried out by such boards should remain in the hands of “managing committees”, etc., that can deal with particular issues that arise along the way. The point is that a sub-set of strong leaders (or just really great thinkers) should be tasked with the job of looking out at the markets they serve at the 30,000 foot level.


 Further, firms need to instill a corporate culture of accountability. This, I think, it is a better way of instilling institutional pride and loyalty than simply a “teamwork” or “networking” model. We need to recognize that partners (well, rainmakers) only remain in firms to the extent they perceive strategic advantage from remaining there (that, an entropy or nostalgia—two notoriously weak motivators). Thus, to truly bind a firm together—while simultaneously recognizing that firms are, remain, and will continue to be, institutions in constant flux (in other words, constantly gaining and shedding weight)—firms need to instill a new mantra: accountability and ownership. To the extent that we can get every partner in a law firm realizing that the entire firm is, in a real way, up to their individual creativity and input, we will see a releasing, I believe, of the floodgates of creativity that are often bottled up by inertia and lack of a perceived outlet for the same.

Not So Hard

The great thing about this model is that it is a perfect unity between what firms are used to (consensus-style leadership involving work-a-day partners) and the more-effective business-style model of professional managers, clear lines of authority and specific tasking. This is a cinch, because firms historically were accustomed to co-leadership. Their dismay in the face of the need to incorporate more professionalism and savvy in marketing, strategic planning and implementation, can be met through the selective addition of non-law CFO’s, COO’s, perhaps one-day even CEOs.

We are on the brink of a true awakening of the potential of law firms as vibrant world-players, world corporate entities. All that remains, frankly, is a work around the anachronistic taboo of public offerings for law firms in this country. When that happens, the sky will indeed by the limit.

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The Ferengi and True Intellectual Capital Management: Exploitation Begins At Home

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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Partners: Have Your Book Ready--And Your "Synergy" Spiel Too

A short note on partner metrics. I always enjoy reading MacEwen's thoughts on law and economics, but I have to say I have a bone to pick with him on his post back in May about partner metrics.

He opines there, quite rightly, that firms are looking for alot more than just the "size of the book". They also want someone who is going to add something to their practice in terms of substantive practice that expands their reach. It is not enough to just bring immediate profits (as bringing over a partner is always risky--the clients aren't obligated to play along, after all). Rather, partners must be able to give a strong story for how they will be able to mesh with the firm's over-all strategic plan. Of course, this assumes they have one.

Which brings me to my point. MacEwen goes a little off the ranch (sorry, Bruce) by saying that book is "irrelevant". It is not irrelevant, should not be irrelevant, cannot be irrelevant. Here's why:


1) Competition among firms to attract and RETAIN talent is too stiff to allow firms the luxury of not thinking about IMMEDIATE benefit. There are (conceivably) scores of attorneys that could fit into a firm culture, that can make a pitch for "fit", a pitch for "synergy", a pitch for "expanding capacity" of the target firm. Yawn. What firms cannot afford NOT to ask is "how much synergy have you already demonstrated you can create, buster?" I mean, if PPEP isn't the law-firm version of quarterly profits for the DOW JONES blue chip companies, then what is it? Firms can't afford forays and excursions and investing in maybe's. They need to keep the numbers up, all the time, every year, without fail. If they don't, they lose people (well, they lose them anyway, but they lose more!).

2) Frankly, just as I opined in my piece on the "irradiation of grades", Bruce has identified a whole new vista of criteria for judging talent, but not to the exclusion of tried-and-true metrics. I think the best criterion for potential for bringing long-term growth and profit to a firm is the track record of an individual in so bringing it. The days for "not talking about size of book" are so over, if there ever was such a time.

3) Thus, it is the same (new) old story: the pond is shrinking, standards are up, more is more. If you want to be recruited to a new platform, you must not only be able to sing and dance and have a substantive practice that will strategically expand a target firm's reach, but you must also have a demonstrated book.

4) Even if Bruce is right and book SHOULD be ignored, I can tell you that it most assuredly is not being ignored, nor does it look like it will be anytime soon. I mean, in my markets (San Francisco and Los Angeles), book inflation is going through the roof. One million in immediately transferable book is now a FLOOR, people. Three years ago it was a golden ticket. Firms don't want to say it, but they can barely pull their eyes away from their blackberrys for a book of less than $1.2 mil. Synergy be damned. Firms (largely) already know what they want: more of the same, in more places. They aren't even going to talk to you unless they already know they need what you've got.

Book is bank!

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Swarm Theory and The Practice of Law

Wow. And here I just filed a post about nothing happening during these 'dog days' of summer in the blawgosphere, and I tumbled upon a great post by new blogger David Bilinsky of Thoughtful Legal Management. David reviews a National Geographic article about bees, swarm theory, and the implications for business (and other human) management. Fascinating stuff. David also mentioned a recent Cornell University study that speaks to the issue.

Birds and Bees

I'm not sure I can do justice to the entire concept of "swarm" theory, and frankly even the descriptions from the scientists sound fuzzy to me. At any rate, the idea is that in certain creatures (like bees and pigeons) that band together in large groups for safety, no one individual creature is really minding the store. Or, rather, the colony or hive or collective unit functions almost as a single organism by virtue of the interaction of all the creatures making independent judgments, and all communicating with those nearest. For example, in a bee hive, the "queen" in no way rules the hives. She does not direct activity. Rather, the bees each have a palette of a very few observation/reaction series, but are able to communicate these to each other. The effect is that the bees sort of 'follow each other' to where the honey is (ok, I seem to remember there is something about a "bee dance" and no I don't know how that fits in).

Maybe an easier example is a flock of birds. There is no leader telling a flock of one hundred pigeons to take off simultaneously from the pavement when my four-year-old runs up to it. Rather, each bird has a little tiny sensor and little tiny glycocalyxes in its brain cells that allows it to understand that: 1) that short, sticky human is a threat; and 2) if my buddy flies off, by God I'm flying off too. The result is a cool aerial effect.

Taking Advantage of "Dumb" AI

Alright. The next leg of this little thought-journey is that scientists, programmers and business management types are now using a sort of swarm theory approach to solving big problems. The idea is to give the computer a bunch of parameters, and ask if to look at the problem from every conceivable angle, and it eventually can turn up with some very surprising, non-intuitive, even cost-saving results. I'm not sure I grasp how this is different from any other kind of computing, but apparently it is. (That's for somebody else's blog to figure out).

Easier for me to understand is the sort of "hive-mind"-like effect of the world wide web (of course). Whole lots of people making eentsy-weentsy observations, that maybe in the aggregate can get us all as a nation, a world, smarter and better able to react (well, you know, except for the billions of people not reading, listening to news or blogging, but you get the idea).

Business Applications

Here is where it really gets exciting, but even murkier. Social scientists apparently think they can put some of this "swarm-mind" ("hive-mind", whatever) mentality to work in smaller working groups. The hallmarks of this kind of approach are: "decentralized control, response to local cues, and simple rules of thumb."

Apparently, the ideal "swarm"-type thinking "manager" attempts to go in to a situation with no preconceived notions of how a problem is to be handled. S/he goes into the proverbial meeting with blinders on, lets everyone talk it to death, try to see if from all angles and then even engage in secret ballots. To make this work (and sorry, I think I started going sideways there for a minute) the idea is to try to have some basic criteria or simple rules of thumb about how a particular business (or other activity) works, and then try a non-hierarchical approach to solving it. Kinda' smooshy, I know, but I think there is some merit there--at least food for thought, for future research if nothing else.

Okay, What About Law Firms?

My initial thought is that since the legal industry is usually 10-20 years behind business best-practices, that there is a really, REALLY long time-horizon before this stuff gets spouted at ABA seminars. But maybe not. Maybe our own technologies are allowing a sort of bottom-up or side-to-side decision-making already. I mean, lawyers today already stay ubiquitously attached to their blackberrys, the web, the blogosphere, their clients' intranets. Plus, they are working in more and more disparate groups across disciplines and continents. Maybe law firms can sort of leap-frog over the some of the steps (sort of like Thailand not bothering to install telephone land-lines and going directly cellular). It is something to think about. On the other hand, I don't see the legal mind as an essential collaborative process. Rather, the legal imagination is usually conceived of as rather a solo job, with lots of pretend collaboration (usually involving lots of yelling, sneering, badgering or smug side-long glances--especially the smug, side-long glances--you know who you are!).

The Testosterone Factor

On the other hand, humans are not bees and we're not birds either. We are mammals and we do organize ourselves in a more hierarchical (read: social dominance cycle) sort of way. Thus, there is probably an inherent resistance to true de-centralization in smaller groups. Plus, we as "civilized" humans haven't done too bad for ourselves over the past 14 millenia, so we oughtn't be too quick to chuck a working strategy too quickly. At any rate, there is no such thing in a human interaction as "no leader" like in a pigeon or bee model. We do have leaders, even in teams of two or three. On the other hand, taking advantage of new social technologies is also a hallmark of our wonderful species. I'm interested to see what happens next.

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