Law firm leadership for a changing world

  • September 14, 2011
  • Michael Dempster

It’s a busy July afternoon and Patrick Lamb is threading his way through Los Angeles traffic to LAX.

Traffic’s good, he reports over his cellphone. And business is even better. The Chicago-based litigation lawyer has just finished the first of two depositions he’ll make on the West Coast, and his voice is charged with enthusiasm.

Lamb has been feeling the energy every day since January 2008 when he and seven partners launched Valorem Law Group — and banished the billable-hour business model. Their intent? To create more value for clients.

“This is more fun, a much more vigorous, much more engaging approach and makes all the difference in the world from the drudgery of the same-old, same-old,” Lamb says. “There’s real personal satisfaction of doing a good job, and costing clients less.”

Valorem is an example of the kind of change industry watchers believe is needed to meet the demands of today’s digital age. Globalization, information technology, new client demands and the cultural values of new associates are seen as pressure points for senior leaders.

Amid much debate, the question is: Are new leadership trends and innovations emerging? Others retort: if the system isn’t broke, why fix it?

Vancouver’s Leonard Brody, an entrepreneur, venture capitalist and president at Clarity Digital Group LLC, sees little industry change, and believes it’s a tactical error. Any industry can be blindsided and knocked off its perch in the information age, Brody says. Traditional law firms have operated as private clubs with the same structure for decades, which may be their eventual undoing.

“What happens when people say, ‘I don’t want to belong to the club?’ That’s the crisis that will come,” he says. “I think there are many young lawyers who want it to change. They don’t want to be the slave to billable hours . . . Part of the practice of being a lawyer is quite tortuous.”

The billable-hour system, Brody adds, should have been abandoned 15 years ago. On the one hand, clients are dissatisfied having to go through a bill with a fine-toothed comb. On the other, lawyers undersell themselves because they’re operating like factory workers.

“Lawyers say their time is worth ‘X’ amount per hour, no matter what value they provide,” he explains. “So if they do a deal and make an extra $30-million for the client, there’s no upside . . . I think that’s an unsophisticated way of doing business.”

Jordan Furlong, an Ottawa-based partner with Edge International, consults with law firms on strategic and tactical issues. He says while pockets of innovation do exist in the law profession, relatively few have charted new ways of doing business.

Change may come. The 2008 economic meltdown temporarily derailed retirement plans for some boomer-aged lawyers, who soon may be in a position to move on.

“Leaders are, or will be dealing with many senior partners who will leave soon and they have less interest in the medium- and long-term interest of the firm,” Furlong explains.

“This is at a time when they should be doing everything they can to mentor, bring along and train the next  generation of rainmakers ... and they’re not doing it.”

Jim Fries, a partner with Cenera, a Calgary-based human resources and business consulting firm, agrees many leaders have their hands full.

Law firms he works with are concerned about recruiting and retaining young people, providing more equitable compensation across their organizations and clarifying workplace policies.

“The challenges for leaders is how to create a more collaborative work environment where you have this mix of traditional and more kind of Gen X and Y cultures,” Fries says. “I think managing change and helping people understand and appreciate the different cultural values is a challenge. It’s nothing new. I don’t see it stopping.”

If leaders won’t find solutions, won’t change, others will, believes Patrick Lamb.

Lamb helped create Valorem out of frustration with the inertia he found in larger firms. Even before the 2008 economic crisis, the inside counsel world was pushing back against annual hikes to hourly rates, he says.

When he asked fellow partners what they would do when they couldn’t raise hourly rates any more, not one had an answer — or even wanted to have the discussion.

“I decided I’d rather be at the front edge of change,” he added, “rather than get run over by it.”

Valorem takes a simple approach: Conduct detailed discussions with clients early in the relationship and then set an appropriate budget and strategy. Build collaboration among the partners. Use business skills and tools like project management, innovative software and brainstorming.

Valorem has increased its profits every year, while retaining and adding to its client base. While new business didn’t stampede through the front door immediately, the process has proved its worth.

A public speaker and busy blogger, Lamb espouses the joy of working more closely with clients and sharing ideas with partners who, acting together, provide a greater service.

“I’ve been practising for more than 25 years,” he says. “And my worst day since we started Valorem is better than my best day (anywhere else).”

This article is published in the October/November 2011 issue of National Magazine.