Question:
I am a partner in a 30 lawyers insurance defense firm in Phoenix, Arizona. We have 7 equity partners, 10 non-equity partners, and 13 associates. We represent insureds through insurance companies that are our clients and pay our bills. We also represent self-insured companies as well. Our firm is in second generation. The original founding partners have all retired and they are the ones that brought in all of the clients and managed and ran the firm. The firm was primarily run by a strong managing partner. Since the founding partners retired we have been struggling in managing the firm, getting new clients, and finding and retaining lawyers and staff. Now all seven partners are involved in managing the firm and while we are all good lawyers we are not good managers or leaders. The firm has lost clients and lost lawyers and we are struggling. All our partners want is to work in their own silos and work on their files and cases. They consider firm management “non-billable” and not deserving of their time. Do you have any thoughts?
Response:
Law firms are finding that developing effective leadership skills can be a very difficult task. Dealing with leadership is a very emotional issue for most law firms due to the independent nature of most lawyers and the general unwillingness of firm lawyers to put aside their personal interests for the good of the firm. In fact, in many cases existing law firm partnership structures and compensation systems reinforce this tendency. What is needed is a balance between partner autonomy and partner accountability. Leaders will either have to be recruited externally (i.e. lateral partners) or skills will need to be developed internally.
The firm can begin by conducting a self-assessment using the following 10 point checklist:
- Only the best should lead and be placed in key leadership positions. Does the firm have its most capable people in leadership positions?
- Does the firm have partners or other lawyers with leadership skills or potential leadership skills? How many?
- How many lawyer leader positions are there in the firm that require leadership skills? How many lawyers have these skills?
- Does the firm’s compensation system reward management and leadership activities?
- Does the firm’s compensation system have a team reward component and are non-billable firm investment activities respected and rewarded?
- Does the firm’s culture support a team orientated practice or an individual type practice?
- Does the firm’s governance structure provide for administrative, management, and leadership roles and responsibilities?
- Does the firm have an in-house leadership training and development program?
- Does the firm invest and budget funds for leadership development?
- Is the firm willing to make the commitment?
While professional non-lawyer executive directors, administrators, and office managers can provide some relief, the equity partners must still develop appropriate leadership skills and perform upper-level leadership roles. In some firms these skills are simply latent and need to be identified and appropriately reinforced. In other firms such skills are nowhere to be found. Such firms will have to either recruit partners with requisite skills from the outside or develop leadership skills internally. This will take time and will require dedication, focus, patience, and hard work.
This author believes that improvements in law firm leadership will only come about as a result of improved leadership selection and action orientated leadership development programs. Attorneys must begin to shift their attention from a transaction orientation to a firm-first client orientation. Attorneys must begin to make investments in non-billable time and consider such as investments for the future. Attorneys must begin to formulate a balance between accountability and autonomy and begin to embrace change. Only then will an environment be created that supports leadership development that fosters an organization that can facilitate ongoing new client acquisition and retention in the future.
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John W. Olmstead, MBA, Ph.D, CMC
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