The Ultimate Secret of Success for Professional Services Firms

Steven Harper published The Lawyer Bubble  and has gotten lots of attention. And, Weil Gotshal announced layoffs based on its conclusion that the market for high-end legal services has changed permanently.                                                             

During this same “Big Law Spring,” Charles Ellis’ book, What It Takes, appeared. Its subtitle is “Seven Secrets of Success from the World’s Greatest Professional Services Firms.” Ellis looks at a preeminent law firm, a business consulting firm, an investment firm, a medical clinic, an investment banking firm and an accounting firm.

Well, it turns out that the seven “secrets” he discloses were not secret at all; and What It Takes is not prescriptive in the style of In Search of Excellence and Good to Great. But, like those books, What It Takes looks at iconic firms and tells stories, some well-known and some not-so-well-known, that generally illustrate the seven secrets.

The iconic firms are

• McKinsey & Company
• Cravath, Swaine & Moore
• Capital Group
• Mayo Clinic
• Goldman Sachs
• Arthur Andersen & Co.

The seven secrets are

1. Mission: an inspiring purpose
2. Culture: shared values
3. Recruiting: the best people
4. Developing people: professional and personal learning
5. Client focus: clients first
6. Innovation: reinvention in the face of change
7. Leadership.

No news here. These “secrets” may be nearer the Ten Commandments than the Secret Wisdom of the Kabbalah. But Ellis’s actual stories,  sounding canonic themes, are a kind of  professional-services bible stories. Some of the stories are compelling, some not.  All are worth reading.

Near the end of the book, an ultimate principle emerges. It is broader than Harper’s indictment of Big Law and looks beyond immediate crises of supply and demand.  Every professional services firm, Ellis shows, must strike a balance between professional values and  business priorities (money).

When money comes to have greater weight than professional values, decline sets in. Overvaluing lucre contaminates mission and infects everything else.

When the dominant value is money, small choices and large are colored accordingly. In the short run, money, which is tangible, immediate and measurable, almost always seems more compelling than professional values. Exceptions to principles almost always seem manageable. But in the end, when professionals come to measure and value each other in other in terms of money –  firms come apart.

Ellis’s penultimate statement:

When the salience of professional excellence is challenged by commercialism, the “realistic” business arguments are easily made and documented, while fidelity to professional values is abstract and based on a faith that disbelievers often cannot – or say they cannot – understand.

My own firm is not ungreat. And the hardest thing we do is strike the balance between business needs and professional values.

It’s a balance.

More on Professional Models

Professional models walk the walk

Two earlier posts here have commented on the key role of models in law firms. Models – members of the firm who walk the walk – are exceptionally effective transferors of standards and values.

They demonstrate how things are done and inspire doing things that way. (“I want to be like her.”) This eliminates both the need for dry hours of training and for cumbrous stacks of hierarchy.

• So, models are efficient and inspiring.
• Where do you get them?

The earlier posts commented on “organic” models – the ones that grow up naturally.  Every lawyer (young or old) should identify and emulate the finest members of his or her firm and profession. The best certainly do that. For that reason, firms should hold up their models. And that is also one of the roles of professional associations. (I have the sense that the business of giving awards in bar organizations has gone awry, but that is another discussion.)

The natural inclination is to look to older, prominent professionals and leaders as models; and, to think of models as other people. Some time ago though, I realized with a jolt that not only should I be identifying my models, but I might be one myself – and that I should give some attention to what kind of model I am. This is not just about how old I am or how prominent, but about how my example contributes to my firm’s culture.

• So, models are not limited to other people. You are one.
• But, not just you. Every member models the firm’s values and standards.

When not-older and not-prominent members can be acknowledged and celebrated as models, they should be – in formal and informal ways. But recognition may be the least of it. How do you engender a sense among everyone that they are models for everyone else?

This is easier to achieve in smaller organizations than in larger ones.

Sources of Professional “Inspiration”

For a Bar Association program in 2003, I was asked to answer this question: “What do you find inspires your colleagues most?” (NOTE: The date on my file says “2003,” but I find that hard to believe.)

My answer, in part, was:

I think that there are two main things that guide us at our firm when we are at our best. The first is the models provided by older lawyers whom the younger ones want to emulate. I have now witnessed this working over 2 or 3 generations and I think that there is more power in the example of an admired professional than in all the vision and mission statements and ethics codes in the world.

Second, is membership in a mutually supportive community of people – a partnership – who like, respect and enjoy each other. We’re never as good as we ought to be in our firm, but sometimes we are very good and I guess that collegiality and community really are sources of “inspiration and dedication”.

The things that inspire my colleagues most, I think, are the examples of admired colleagues and the sense of community and shared purpose.

Over the (apparently, many) years since then, I have become more convinced of my answer. And, in these sources of “inspiration” (that was my interlocutor’s term, not mine) can be found the foundations and future role and functions of law firms. In the 21^st Century, law firms won’t be needed as much as they were in the 20^th Century, for shared infrastructures and practice support resources. They won’t be needed for scale or efficiencies.

But, they will be needed to develop and form true professionals. Always, the profession has been shaped by its models. In the 19^th Century, the bar itself was a cohesive community and a ready source of models. In the 20^th Century, those roles shifted to firms. In the 21^st Century, as local, state and national boundaries count for less and less; compelling models of professionalism will be needed more and more — especially as collaborating and contesting lawyers seek to connect over greater and greater distances.

There is a lot of talk just now about mentors. Yes. But do not confuse mentors with models.

You Must Create Your Own Recipe

While you can always learn helpful things from others, we have found that the recipe for excellence in a particular organization is specific to its history, external environment, and aspirations, as well as the passions and capabilities of its people.

Yes!  Consultants who say the recipe for success is specific to every firm and not an off-the-shelf formula.

In Beyond Performance: How Great Organizations Build Ultimate Competitive Advantage , Scott Keller and Colin Price argue that organizational health is the ultimate competitive advantage. “Organizational health” is an organization’s ability to align, execute, and renew itself faster than competitors can. It is about “adapting to the present and shaping the future.” Healthy organizations “create a capacity to learn and keep changing over time.”

Keller and Price say that the recipe for this kind of health is unique to every organization.

Thank goodness for management consultants who recognize that organizations are unique in their most critical aspects. This goes quadruple (and more) for law firms – and even more than that for mid-sized law firms.

It goes at two levels. First, there are so many types and kinds and models and sizes of law firms that the phrase “law firm” conveys very little information. Every evaluation of every law-practice-management prescription must begin with a strict scrutiny of whether it applies to your firm at all. And midsized firms in particular must be eternally vigilant not to swallow nostrums concocted for the big guys, or for the little guys, or just for the other guys.

Second, law firms – and I am talking about all of them, every single one – notwithstanding the foregoing. Law firms are so rooted in their particular people and cultures that all law firm management is always about “creating your own recipe”. There is no other way.

This is most especially true when you are “adapting to the present and shaping the future.”  If you force it, you are going to break it.