Tag Archives: organizations

Law firms: consider the pilot fish and the shark

pilotoceanic_whitetipFor all the well-known reasons, aggregate demand for legal services delivered by traditional law firms is flat. That has been pretty well documented. (In fact, enough already.)

So, the firms that are succeeding are the ones taking business from others (they are taking business from other law firms and taking it from alternative legal services providers, as well).

Here are three opportunities for midsize firms in this jungle:

Midsize firms can take business from big firms when clients elect to hire smaller firms where (i) the service is equivalent or better, (ii) costs are lower, and (iii) firm principals are more directly engaged in direct client service.

Midsize firms can take business from small firms where the midsize firm can bring broader and deeper capabilities.

Midsize firms can take business from anyone, anywhere, any time a midsize firm can provide experience-honed legal judgment delivered person-to-person by empathetic, seasoned professionals.

But “taking business” from others need not be all tooth-and-claw. Think instead pilot-fish-and-shark.

Artful midsize firms can build lasting, mutually beneficial relationships with other firms — large and small — law firm and alternative provider —  by networking, collaborating, complementing.

Midsize firms are uniquely apt for networking.

Advertisements

Berkshire Hathaway’s Munger speaking to lawyers, law firms

munger-modal-ebookgraphic-210x210Charlie Munger, the celebrated vice-chairman at Berkshire Hathaway, has gotten the status of guru, especially among writers about investing.

Many do not recall that he is a lawyer and founded one of the most admirable American law firms, Munger, Tolles & Olson LLP; or that he was persuaded to quit practicing law by Warren Buffet. Munger says quitting was one of the best things he did. Aspects of law practice such as measuring out your life in time sheets, did not suit him. Munger has thought and spoken well about the profession —from both perspectivews – as lawyer and as quit-lawyer .

Shane Parrish at Farnum Street, an exceptionally good blog, is a leader among Munger admirers. He recently called attention to the commencement address Munger gave at USC Law School in 2007. Parrish says the speech contains so many of Munger’s core ideas that it represents “Munger’s Operating System” for life.

Maybe so. That address is a string of jewels about career development for lawyers and regarding law firm management.

Here are four nuggets lifted from there. There are more at Parrish’s piece; and more yet in the address itself. But, start with these.

Lifelong learning

[Y]ou’re hooked for lifetime learning, and without lifetime learning you people are not going to do very well. You are not going to get very far in life based on what you already know. You’re going to advance in life by what you’re going to learn after you leave here…if civilization can progress only when it invents the method of invention, you can progress only when you learn the method of learning

Reliability

If you’re unreliable it doesn’t matter what your virtues are, you’re going to crater immediately. So doing what you have faithfully engaged to do should be an automatic part of your conduct. You want to avoid sloth and unreliability.

Work that excites you

Another thing that I found is an intense interest of the subject is indispensable if you are really going to excel. I could force myself to be fairly good in a lot of things, but I couldn’t be really good in anything where I didn’t have an intense interest. So to some extent, you’re going to have to follow me. If at all feasible you want to drift into doing something in which you really have a natural interest

Trust

The last idea that I want to give you as you go out into a profession that frequently puts a lot of procedure and a lot of precautions and a lot of mumbo jumbo into what it does, this is not the highest form which civilization can reach. The highest form which civilization can reach is a seamless web of deserved trust. Not much procedure, just totally reliable people correctly trusting one another. That’s the way an operating room works at the Mayo Clinic.

If a bunch of lawyers were to introduce a lot of process, the patients would all die. So never forget when you’re a lawyer that you may be rewarded for selling this stuff but you don’t have to buy it. In your own life what you want is a seamless web of deserved trust. And if your proposed marriage contract has 47 pages, my suggestion is do not enter.

That last one is the key to operating a law firm. True law firms are professional associations whose members share professional values out of which grow a kind of trust that cannot be achieved by policies, rules or procedures.

Trust among law partners creates real law firms. The rest are “legal services organizations”.

Job description for the midlaw managing partner

He was writing about something else altogether, and suddenly, there it was. Somehow, he had written the best job description I know for the managing partner of a traditional, mid-size business law firm in the 21st Century. He said,

Organizations are complex systems, in which cause-and-effect is nonlinear, path-dependent (history matters), and often unknowable in prospect. Deciding what to do (or not do), and how and when to do (or not do) “it,” is a matter of judgment and experience, as managers try to accomplish short-term objectives while keeping their longer run options open.

David K. Hurst, Why Business Books Still Speak Volumesstrategy+business, S+B Blogs (November 17, 2015).

RabJust now, law firm management starts from that place (that is, from the place of nonlinear, path-dependent unknowability). The same may also be true for other kinds of organizations (maybe all of them, as the author says), but just now it is more true of law firms than almost anybody else. Indeed, to the extent that this proposition is not true of a law or legal process organization, then – to that extent – I say it is not a law firm. Instead, it is probably best characterized as a “legal services organization.”

Firms in which cause-and-effect is linear and for which management outcomes are predictable, likely are process managers, and likely to be replaced one day by machines. Members of those firms are likely not seasoned and rounded “attorneys and counselors.”

The task of the manager of a law firm is to understand the path upon which the firm is dependent; to find the opportunities that path has created in the present; and, to identify new domains of uncertainty, ambiguity and complexity, toward which to boldly go. Yes, keeping options open.

More grandly, the same writer says, “we all need narratives.”

Data is not the same as knowledge; information is not, in and of itself, insight. As humans, we need narrative “centers of gravity” to make sense of our experience.

* * *

Although the advent of big data calls for a good deal of calculation, it also demands more judgment — “big” judgment, which will require more and better-disciplined analogies to help us synthesize our experiences and grasp their meaning.

Such is the nature of strategic planning for non-linear, path-dependent professional services organizations. The process is sometimes described as “herding cats.”

 

 

NC Lawyers Weekly interview of MidLaw scrivener, Part I

MidLaw’s mild mannered scrivener was interviewed by the North Carolina Lawyers Weekly last week. This was in the broader context of the recent announcement that scrivener is stepping down as managing partner of the venerable Brooks Pierce McLendon Humphrey & Leonard, after 15 years in that role.Rabbit

The interview was in the vein of, “Over the course of your long career, Elder Winslow, you must have seen many changes in the practice of law. Is that not so?”

And that set the tone for the responses.

Heath Hamacher fashioned a fine article out of his questions and my answers. It’s in the current issue of Lawyers Weekly. Sort of an old-guy-speaks piece.

MidLaw is setting out the original questions and answers. in two installments. The questions below address changes in the legal profession. A later installment will be biographical ones.

LW:   What problems exist today that did not exist when you began practicing law?

MIDLAW:   Since I began practicing law, American society and the world economy have grown and expanded and become exponentially more complex. At this moment, we are in a time of huge social and economic change. All that growth and complexity and change depend critically on the law and legal system evolving to match it. Needs for legal services have grown wildly.

Our system for delivery of legal services has not kept pace.  North Carolina’s court system is underfunded. People with average to low wealth have limited access to legal services. And, our traditional system of “full service” law firms in the partnership form, responds very imperfectly to the needs before us.

LW:   What will it take to fix these problems?

MIDLAW:   We need to reinvent our system for delivering legal services, which we are well along the way to doing. We are behind the curve, but we are catching up.

New institutions, alternative services providers and new practice settings are developing almost daily. And, many organizations now have sophisticated legal departments that have evolved into really impressive contexts for professional practice.

At the core of this, we need to rethink law firms in fundamental ways – both to ensure that firms respond better to clients’ needs, and also to be sure that law firms continue to be fun and fulfilling settings for practitioners. And some firms are going there.

North Carolina probably needs to reinvent the courts system from top to bottom. Anyway, the courts need more resources.

Low wealth people must get better access to legal services. Our society is so complex. The most mundane aspects of life are bound by laws and rules. But as many as half our citizens can’t afford the expense of untangling legal snarls when they occur, or planning to avoid them. I think this is going to require radical new ways of delivering legal services. And, again, more money.

LW:   What is your biggest concern right now regarding the practice of law and what needs to be improved?

MIDLAW:   My biggest concern right now is the plight of new lawyers. So many new graduates don’t find jobs. Whether they get jobs or not, our traditional systems for bringing new lawyers into the practice and enculturating them into the community of lawyers, aren’t working the way they used to. The profession is segmenting. Lawyers have less and less in common, and less basis for trusting each other. That is clogging the system, and it makes the practice of law less gratifying for lawyers.

LW:   The practice of law has clearly changed since you began practicing. Have you seen positive changes? If so, what are they?

MIDLAW:   In your earlier questions, you asked me about problems so I gave you problems. But please understand: I believe that positive changes abound. Our law firm had a planning retreat last weekend; and our partner, Jim Williams, who is far, far older than I am, said the same thing. He said, “Now is the best time there has ever been to practice law.” He is absolutely right.

Let me list some positive changes (there are so many):

  1. The bar is much more sophisticated than in the past, and are therefore able to be of immediate assistance to clients who need top-notch, sophisticated solutions.
  2. Access to the law and legal resources for lawyers is improved infinitely. Virtually all lawyers have access to virtually all the law virtually all the time – much of it at vastly reduced expense.
  3. Resources for continuing education and professional improvement have gone from essentially none (I remember the NC Bar Association’s first CLE courses), to constant and limitless. That has made a big difference in the quality of the law practice.
  4. All of the alternative dispute resolution processes – mediation, arbitration, etc. – have been great improvements over what we did before, settling on the courthouse steps, etc.
  5. Non-legal resources for lawyers have come into being. Lawyers may have been among the last professions to regularly access to things like self-improvement and quality-of-life resources and training; psychological, wellness and substance abuse counselling and help; and life transition services.
  6. Our tools of the trade are miracles: word processing, scanning, emailing and cell phones. Once, there was carbon paper and whiteout. Once, law firms in New York would charter airplanes to deliver papers to us to get them filed on time.
  7. We are in a time when the world needs lawyers more than ever before. What we do matters.
  8. Millennials sound to me like they may have values and attributes that suit them better to be lawyers than any generation since the 19th Century.

LW:   You said that North Carolina is one of the finest places in the world and needs well-educated lawyers to lead and make it the best. Tell me about that.

MIDLAW:   North Carolina has always been a tapestry of small towns with distinctive, vibrant and interesting local cultures. Local people lead and define their local communities. Lawyers are key contributors to the infrastructure of communities. They are well educated critical thinkers; their training is values-based; and they are uniquely able to articulate community mores. Of course, lawyers are critical to commerce and to the system of justice; and lawyers are connectors. The good ones are peacemakers.

[To be continued in a future post. Return next week to MidLaw & Divers Items, to learn fascinating details of the scrivener’s personal life elicited by Lawyers Weekly reporter Heath Hamacher. Or, as Lawyers Weekly may prefer, get the current issue of that organ to see the entire interview, “edited for length and clarity”.]

10 practice management challenges for mid-size law firms


netword of lagunasOn those rare occasions when I am not optimistic about the prospects of mid-size law firms, I am very pessimistic. Oh yes, mid-size firms are the best setting for practicing law. And many of the current challenges to the legal profession play to mid-size firms’ strengths. And some legal subject areas are positively booming. But except for that, things look daunting.

So this title to a recent Dr. George Beaton blog post – “10 reasons BigLaw managing partners are not sleeping very well” – braced me for a jolt. Challenges to BigLaw most often are not so different from the challenges to MidLaw.

But then I examined Beaton’s 10 reasons. One by one, I liked MidLaw’s chances.

1. Client power.  Large corporations now have alternatives to hiring law firms. They can bring work in-house, or use alternative legal services providers, or exercise their formidable bargaining power for large engagements. Those are challenges that must vex the large law firms. MidLaw on the other hand, can appeal both to the largest clients and also to smaller clients. They can be closely engaged with clients in the management of their legal function. And, if a law firm is not fixated on having every bit of a client’s work, mid-size firms and their clients can find the balance where legal services are rationally allocated among alternatives, and law firms are sized and structured to do the work they are best suited to do (which is not all of it).

2. New competitors.  Alternative legal services providers are taking work that law firms once did. Good! New, alternative providers have found opportunities because law firms were doing work that they were not best suited for. Now, alternative providers are taking the routine, repeatable work. They are making the big investments in technology. Mid-size firms need not staff up or make the investments needed to provide those services. This is an opportunity. Stay smaller, learn to work with (and, to use) the alternative providers, to focus on what lawyers do best, and to build the kinds of firms and professional cultures around the smaller bases that this makes possible.

3. Big Four accounting firms taking legal work.  It was never about occupational licenses. From MidLaw’s perspective, what’s the difference between BigLaw and BigFour? There is also competition from smaller accounting firms, but the point’s the same. What’s the difference between competition from other law firms and competition from accounting firms? Accounting firms (all sizes) remain great sources of referrals for MidLaw firms. Monitor those referrals. They are a good indicator of where your sweet spot may be. If you elect to compete for the same work accounting firms do, then understand how you can do that work better-cheaper-faster than the competition.

4. Technology is a challenge for everyone.  Mid-size firms may be better positioned to navigate new technology than others. The place between the largest firms and the smallest looks like a good place to be. Mid-size firms are the most attractive marketing niche for many technology providers who are designing products to suit. Be nimble.

5. Firm brands are becoming more important than individual lawyer brands.  Beaton says this is inexorable. I’d say the pace is still gradual. Beaton says,

This trend is being driven by the interactions of clients’ buying patterns, technology, globalisation, and talent. Building a distinctive brand is more about culture and discipline than anything else. Custom and practice legacies and inertia are the enemies of brand-building.

These are good insights. Mid-size firms are well suited to nurture distinctive cultures, but they are deathly subject to “practice legacies and inertia.” And then there is “discipline.” Be intentional about who you are.

6. Globalization.  Twenty-five years ago, what was called “international law” was the almost-exclusive domain of large firms in large U.S. cities. That has changed as technology, global commerce and cross-border legal practice have evolved. Various forms of networking rival the advantages (without the formidable disadvantages) of multinational law firms. Globalization is now a MidLaw opportunity. Reach for it.

7. Attracting and holding talent.  Here is the greatest advantage of mid-sized firms: they are (can be, anyway) more fun. Beaton outlines the challenges for BigLaw (“the universal allure of life-time partnership in a BigLaw firm is no more”). The challenges Beaton identifies are also challenges for mid-size firms. But mid-size firms look better suited to meet them. Mid-size firms are better able to forge personal and professional connections among their members. Be intentional about it.

8. Change management.  Beaton says the ability to change is now mission-critical for law firms. You bet. Change will be a challenge from now on – everywhere, for everyone, in every endeavor, at all times. And there is quite a lot of change facing legal services organizations just now. Law firms have held it back for so long, but not any more. Mid-size firms, as smaller organizations, have the possibility of greater agility. But they can also fail much more tidily and efficiently than larger firms. Not every mid-size firm is agile.

9. Partnership structure.  The partnership form clearly does not suit large national and multi-national  law firms. Partnership impedes change and capital formation in organizations composed of large numbers of professionals who do not know and cannot trust each other. For mid-size firms though, partnership can still animate culture. Partnership still looks like the natural structure for professional services colleagues in non-hierarchical organizations that are bound by ties of personal loyalty. But continuing and increasing attention to nurturing connections among members is critical; and capital is more and more an issue, even for smaller firms.

10. Equity management.  Equity management encompasses: remuneration, risk management, right-sizing, binding members to the firm, and the possibility of building capital values for partners and perhaps outside investors. These are issues for mid-size firms as well as the great big ones, albeit in different ways.

This is a good set of law firm management issues to target. Dr. Beaton’s observations about their applications to large law firms are posted at his blog together with links to other materials, issue by issue.

 

 

Law firms, law schools lumber — Elon Law, not so much

elephant-picture

3:AM MAGAZINE Whatever it is, we’re against it

Criticism happens quick.

Criticism in tweets and blogs and articles comes really quickly. (“The legal profession is doomed.“) Changes in law firms and law schools, not like that.

Law firms and law schools are changing right now, albeit perhaps in lumbering ways.

Yet, even though “it’s surprising how long things take, [it’s] shocking how fast they happen.”

That’s the feeling I had when I read this article about Elon Law School’s success with its new approach to legal education. Elon Law has made some big changes. They appear to be working. Where did that come from?

We’re not like every other law school,” law school Dean Luke Bierman said in an interview last week. “We want a different kind of law student — a pioneer, someone with a pioneering spirit who can come into a new program and succeed.

The legal profession was pronounced “doomed” a short while back. Now, maybe not. There is something new at Elon Law.

On organizing law firms around professional values

pellicansCompetence, autonomy and connectedness.

These factors were recently correlated with a sense of well-being and life satisfaction among lawyers. They far exceed money, status or prestige.

In plain terms, lawyers who feel a sense of competence, a sense of autonomy and a sense of connection with others are the contented ones. These factors, the study also found, are less often experienced in large law firms than they are in public service jobs. But note well: the satisfaction achieved in public service is not said to come from the greater nobility of the work, or from reflection on a life well spent. Rather, it’s because public service lawyers are more likely than big firm lawyers to experience a sense of personal competence and autonomy and meaningful connections with others.

Surely, achieving those modest conditions are within the grasp of virtually anyone with a law license – big firm or small, private or public. It’s not about the job; it’s a matter of how the practice environment is structured.

In fact, it might be argued that law practice, certainly “classical law practice,” is the natural home of competence, autonomy and connectedness. Those factors align remarkably closely with the traditional culture of the legal profession. And, now-days the emerging culture of all knowledge work, not just legal work, (think Google) seems to be aspiring to the same principles.

Traditional legal ethics. The heart of legal ethics has always been in the lawyer’s duties of competence, independence and loyalty. It’s not much of a stretch to see competence-autonomy-connectedness as equivalent to those ancient ethical precepts. This is where lawyers began.

Maybe in some ways, large, leveraged and departmentalized law firms have moved away from this core. Large organizations inevitably limit autonomy and may dilute personal connections with clients and colleagues, and they concentrate individuals on narrower and narrower circles of competence. Even so, few law firms, large or small, do not claim competence (they call it excellence), some form of autonomy, and professional connections (collegiality) among the foundations of their culture.

birds-group-photography-cropKnowledge workers.  Even as lawyers may have moved away some from this original core, organizations of knowledge workers are moving rapidly toward cultures that prize flat or non-hierarchical structures,  a sense of community and, of course, excellence.

My best guess is that business organizations of the future will look more and more like what law practice might have looked like in the 19th Century. (OK. Please allow a bit of latitude here, but you get the point.)

Technology. Technology is abetting this. The thrust of 21st Century technology is to “commoditize” knowledge, to equalize the capabilities of small organizations with larger ones, and to create new capabilities for networking and for social connections – in every instance promoting individual competence, autonomy and community.

Millennials. Is it a cause or is it an effect? In 2013, Millennials made up a third of the population of the United States. They constitute a majority of the work force.  And, they are often characterized by attributes that line up with these same factors. Legal employers are commonly admonished to provide work cultures that meet Millennials’ expectations of professional development and recognition of individual achievements, while anticipating their independence from institutions coupled nonetheless with a desire to work as part of a community or team broader than themselves.

So, it’s simple enough. The pillars of professional satisfaction are competence, autonomy, and connectedness. Traditionally, these values have been at the exact center of the professional lives of American lawyers. And now American business culture generally is creating new forms of organizations founded on these same things.

So – as law firms find themselves being reshaped by technology, by non-lawyer service providers, by the expanding role of legal departments, and by limited-service law firms, a key to recruiting and retaining talent will be to create future firms in which professionals can build their careers around competence (professional development centered in meaningful experience), autonomy (participation in a non-hierarchical business organization) and connectedness (collegiality, shared values, and close connections to clients).

Achieving this in law firms that handle larger, complex matters is harder than it looks, but it is imminently doable.

Core lawyer function not special knowledge, but managing hard problems – Mauboussin: a thinker about that

migrating canada geese

Farnum Street recently called attention to Michael Mauboussin‘s observation that the capability of IT-enabled networks, which can harness the wisdom of crowds, reduces the scope for experts to add value.

A much narrower but related point has been made here at MidLaw in the context of law firms. The growing ability of smaller firms to network with each other and harness combined wisdom, diminishes the advantage of larger firms. Much of the value that large firms bring can be replicated by networking; and technology is rapidly enabling better networking. This does not eliminate the need for law firms, but it reduces the need for so many large firms, and it affirms the growing opportunity of mid-sized firms.

Mauboussin extends this thinking beyond the observation that problem-solving is no longer something that must always be handed over to subject matter experts. He suggests methodologies for solving problems, including solving problems with networks that include experts.

This is important learning for lawyers. Subject matter expertise is not what’s at the core of lawyering. Problem-solving is. Lawyers are not so much possessors of key knowledge as they are professionals who know how to confront and manage hard problems. Mauboussin provides useful thinking about how to think about thinking about these problems.

Knowing when and how to hand things off to subject matter experts and then how to use what you get from them, is an important part of solving problems. As computering advances, this kind of competence will be a larger part of lawyering.

Equality & excellence; conflict & creativity @ Guilford College

Guilford College Art Gallery

Guilford College Art Gallery

Connecticut-based governing-board consultant and author, Dr. Martha Summerville, observes that tension between values stimulates creativity. She is commenting on an earlier post here questioning how Guilford College can hold both excellence and equality at the same time as fundamental values. Is this tension (between excellence and equality) and the resulting creativity, at the heart of what sets Guilford College apart?

Martha is a Guilford graduate and trustee. Tensions like this, she says, can stimulate creativity, but they can also generate conflict. This puts me in mind of long time Guilford trustee Martin Eakes’ frequent comment that, in group deliberations, creativity is the product of conflict. Martin loves to see conflict in board deliberations.

Guilford College and its board have some of all that. Simultaneous commitments to equality and to excellence are at the center of it. And I believe that the source is in the essential Quaker insights there is that of God in every person; and revelation is continuing.

How much tension is that?

Millennials as lawyers, a delicate and touchy topic

The Millennials, we are told, move frequently from job to job, seemingly at a pace that, for lawyers, would obstruct professional development and frustrate the efforts of legal employers seeking to recover investments in professional development. This is a challenge.Baby-Owls-l (1)

And then there are the Millennials themselves. Yes, Millennials as a group can be characterized along various dimensions. They are said to optimistic, team-oriented, and tech savvy. And, they are achievement-driven, pressured to succeed and distrusting of organizations. The lists go on.

But for all the things that can be said about Millennials as a group, what is true of the group may tell you nothing about any individual member of the crowd.

In the weeks since Brooks Pierce’s terrific discussion of generational differences, led by Wake Forest University’s Rogan Kersh, I have sat with Millennials who affirmed the broad characterizations of their kind and urged that our law firm structure itself to manage them accordingly – and I have sat with others who, even as they accept the general insights about their generation, at the same time vigorously (and very credibly) deny that the same conclusions apply to themselves as individuals. They even resent the assumption that they can be lumped in that way.

This learning about generations, and Millennials in particular, must be applied with caution and a delicate touch.