The fundamental task of law firm leaders is to help everyone in the firm work together. Lawyers and staff who physically share the same office environment should share an outlook that shapes the development of common goals and agreement on how to achieve them. Lack of such an outlook inevitably can be traced to lack of leadership in the firm, no matter how big or small the firm is.
Building Shared Values
Consider the situation of a lawyer who had turned to me for coaching assistance. This lawyer was not a partner in her firm, and was driven to distraction by one partner who was arrogant and a bully. The other partners, however, were nice enough, and my coaching client was not certain she disliked the bad partner enough to leave the firm and go through the expense and hassle of starting her own practice or otherwise looking for a new firm.
I explained that there are really three threshold levels, in ascending order, that should shape the decision to leave a firm:
- Threshold One – Personality: Do you like the people you work with?
- Threshold Two – Economics: Are you earning enough money to make staying worthwhile?
- Threshold Three – Values: Does the firm take a shared approach to compensation and clients, or is it every lawyer for himself/herself?
For my coaching client, getting past threshold one was difficult because, with one exception, the other partners were “nice people.” Yet, upon further analysis, these nice people had created a problematic environment. They continued to tolerate the abusive partner, and they (as the other partners) made no effort to involve others in the life or management of the firm.
The economics of the firm so far as billing and client development were such that, even if my coaching client made a proposal to become a partner and it was accepted, she likely would still be able to make more money at another firm. And because all non-partners were excluded from how the firm was operated, there was no shared value system at all.
Creating a Team
Law firm leaders, like leaders in any organization, must connect effectively with every member of the organization in order to create an effective team. Team members share the same work ethic, values and belief in the work done for clients.
Failure of leadership to create such shared values will cause inefficiencies, create disharmony within the firm and result in poor client relations – the stuff of malpractice actions and disciplinary complaints, and ultimately the potential dissolution of the firm.
A sure way to create conflict within a firm is for leaders to allow the impression that people are being treated unfairly. Some lawyer-managers do this intentionally, saying things they don’t believe to law firm members and staff and thinking this can “pull the wool over their eyes.”
Law firm leaders who ask or expect others in the firm to perform to a certain standard that the leaders themselves don’t observe are playing with fire. It has been observed that you can’t fool all of the people all of the time. When people realize they are being fooled, their reaction is often anger—and an angry law firm is one doomed to failure. It’s far better for leaders to be open and honest about what the firm needs to achieve, and to work as a team with shared resources and goals.
Structuring the Hierarchy
Granted, the leaders in a law firm have unique organizational challenges that are not present in other organizations, given the nature of the governance structure in many law firms. In larger law firms today, one finds management efforts being split. There may be a COO (usually a non-lawyer), a CEO-Managing Partner (and Chair of the Management Committee), and then sometimes a Chairman of the Board (usually a former CEO-Managing Partner).
If the Chairman of the Board is an “emeritus” position or a position with specifically designated responsibilities, this division can work well. However, if there is the expectation that the CEO is the primary leader while there is another ego-bound lawyer acting in a leadership role as Chairman who conflicts with the CEO, the firm can only have chaos and difficulty. Clear lines of leadership are inseparable from effective functioning of the firm.
Many lawyers who have leadership positions in their law firms, whether there are only a few lawyers or many hundreds, still have billable hours. Often this is because they don't get paid for also taking on the management role. How to compensate lawyers for this when the primary focus of the firm is on billable time is a major issue.
Contrast that with the situation in the corporate world. Most CEOs had some kind of operational position before they took the job, but gave up operating responsibilities long before they reached the leadership pinnacle.
Senior corporate severance packages (golden parachutes) are large, and negotiated before entering employment. The severance packages of law firm leaders are minimal and rare; the managing partner must resume practice after his/her term ends, with compensation at risk unless client relationships were maintained or rejuvenated. Such factors illustrate why law firm leadership is often viewed as a thankless position that lawyers often shun.
Defining Administrative Responsibilities
In many firms, of course, there arepaid administrators who are responsible for some leadership activity, such as oversight of accounting, human resources and similar functions. Often such a person will report to a senior lawyer in the firm – such as the CEO or Managing Partner – but the reporting relationship is less than ideal.
Many lawyers/law firms as employers act on the premise that all non-lawyer administrators, including such senior managers as the Executive Director or COO, are servants to the law, and that diminishes the senior administrator’s effectiveness. There should be two prerequisites defining the senior administrator’s role in order for the firm to get the most benefits:
- A written statement defining the administrator’s lines of reporting and communication, and the method for evaluating the administrator’s effectiveness. If there are organizational criteria for success (profits per partner, revenue growth, number of clients), it must be clear which ones are considered to be within the administrator’s control, and which ones are not.
- A clear understanding of organizational roles and responsibilities. Typically this should mean that the senior administrator is responsible for profits, organization and efficiency, while senior lawyers – the individual Managing Partner or CEO, or the collective Executive or Management Committee – are responsible for the strategy and future growth of the firm.
There is also an ethical dimension to how much or little leadership responsibility lawyers can cede to their administrators, as well as how much responsibility the leaders of a firm must accept for other members.
The commentaries on Chapter XVII of the CBA Code of Professional Conduct emphasize that lawyers “must assume complete professional responsibility” for all matters entrusted to them, or that they entrust to others within their firm.
Some U.S. jurisdictions extend this responsibility further, holding that partners and other lawyers with managerial authority in a law firm must take reasonable measures to ensure that all lawyers in the firm conform to the Rules of Professional Conduct – and that lawyers who have managerial responsibility within a firm are personally responsible when other lawyers in the firm violate the Rules.
If firm leaders still have a major focus on rainmaking and their own billable hours, they may not be paying proper attention to catch the errors of others. And that creates governance problems that are at the heart of disciplinary actions and malpractice lawsuits.
This is certainly the case with outsourced legal services. Chapter XVII of the CBA Code of Professional Conduct notes that “a legal assistant should be permitted to act only under the supervision of a lawyer,” leaving the burden of ensuring adequate supervision to lawyers themselves.
Managing the legal process and overseeing the quality of the work product of others is the reality of the legal profession. This is outsourcing. In such circumstances, whether the "outsource" is someone in the law office, someone overseas or someone located in between, the lawyer who assigns their work is still responsible for setting the strategy of the matter, the quality of the resulting work product, and the management of the entire process. That to no small extent imposes the responsibilities of leadership on every lawyer who delegates a matter.
Adhering to Professional Standards
It should be apparent from these selected issues that law firm leadership is in fact a different undertaking, because it involves so many aspects that are unique to a lawyer’s role. There are organizational fundamentals, ethical responsibilities, partnership needs, and client service requirements that are all unique to the law firm setting. That’s why the leadership structure of any law firm should be considered carefully and changed to meet today’s sophisticated needs while still adhering to all professional standards.
No longer can a large law firm, which likely is spread out across the country or even the world, follow the relaxed country club model of firms from decades past, where active leadership was a hit-or-miss proposition.
Every law firm must have clearly defined roles of leadership – for lawyer managers and for professional administrators. Failure to operate in this way merely creates problems for lawyers and staff, which ultimately means unhappy clients. Real law firm leaders, whatever their responsibilities or titles, should never let matters reach that point. The future of your firm depends on it.
Edward Poll (edpoll@lawbiz.com) is a certified management consultant and coach in Los Angeles who coaches attorneys and law firms on how to deliver their services more profitably. He is the author of Attorney and Law Firm Guide to the Business of Law: Planning and Operating for Survival and Growth, 2nd ed. (ABA, 2002), Collecting Your Fee: Getting Paid from Intake to Invoice (ABA, 2003) and, most recently, Selling Your Law Practice: The Profitable Exit Strategy (LawBiz, 2005).