Vulture culture

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Tackling this subject, I admit, may simply be an excuse to achieve a long-held goal of using an Alan Parsons Project album as a post title. (Next up: finding a way to smuggle in a Supertramp reference.) But in truth, I was pointed in this direction by a couple of recent developments that revisited the well-worn topic of “law firm culture.”

The first was the most recent Citi/Hildebrandt Client Advisory, which confirmed the increasingly evident fact that for midsize and large law firms, Winter’s Here. Among the report’s contents was this warning:

“Law firms discount or ignore firm culture at their peril … the leaders of a firm whose partners pride themselves on their dedication to public service, a culture of collegiality and tolerance, and a commitment to share profits in a fair and transparent manner should acknowledge the importance of this culture to the firm’s success so far.”

I would be hard-pressed to find a sizeable law firm that demonstrably fits this description in reality, not just in its partners’ imagination. As Steven Harper points out, almost everything about large firms’ strategy and behaviour over the past several years can be described in precisely the opposite terms.

Law firm “culture” isn’t that hard to define, really. Culture is what people at the firm actually do every day. In harsher terms, it’s what people get away with. Culture is what actually happens. A law firm’s culture is the daily manifestation of its performance expectations and behavioural norms — what is encouraged and what is tolerated. So it’s not a matter of law firms “ignoring” culture — every firm has a culture, and most firms’ cultures are remarkably and depressingly similar. It’s a matter of recognizing that the culture that a law firm develops and sustains has an impact on productivity, retention and morale — in many cases, a catastrophic one.

“Collegiality” deserves a closer look, because almost every law firm insists that it maintains a “collegial” atmosphere. Stephen Mayson accurately points out that at most law firms, this is nonsense, driven by a misunderstanding of what “collegial” means:

Typically, partners are confusing collegiality with friendliness and sociability. Collegiate organisations make decisions in the long-term best interests of the firm, they are collaborative, and no individual is more important than the firm. What I hear described, though – most often in firms that claim to be collegiate – is an environment where personal and local interests are usually pursued in preference to the firm’s objectives. Work-hogging, and a refusal to cross-sell, are prevalent, fed by a personal billing and client origination culture. These firms are often low-trust partnerships, where it is not unusual for high billers to hold the firm to ransom or to throw their toys out of the pram when it looks as though they might not get their own way. This is collegiality?

It is not. But it is the culture of the typical law firm — the behaviours that are encouraged or tolerated.

The second development arose from my attendance at the Feeney Lecture at the University of Ottawa Law School, delivered this year by Mitch Kowalski on the subject of the changing legal marketplace. I was struck by the consistent and even predictable reactions from panellists and audience members to Mitch’s portrait of the legal profession’s future, which included a prominent role for “non-lawyer” owners and service providers.

Among the objections was the classic concern that law firms run by “shareholders” or in a “corporate manner” would see their standards and professionalism fatally compromised, and that — wait for it — the “collegial” nature and professional “culture” of law firms would be lost. See the foregoing paragraphs, especially Stephen Mayson’s diagnosis, and tell me precisely what it is that’s at risk here. Tell me how equity partners are any different, for all practical purposes, from non-lawyer equity shareholders. Tell me how the “de-equitization” of “underperforming” partners now being carried out by hundreds of lawyer-owned law firms across North America and Europe is an exemplar of professionalism and collegiality.

I would like to suggest that our positive (if not vibrantly self-admiring) vision of “law firm culture” belongs more to the realm of myth than to reality. There is nothing about an enterprise owned, operated and populated by lawyers that makes it markedly better than any other enterprise, and quite a bit that makes it noticeably worse.  The sooner we shake off our misconceptions in this regard, the sooner we can address, in an honest and grown-up way, what will happen when lawyers are no longer the only (or even the dominant) decision-makers in private legal enterprise. Miguel Pereira and Fergus Payne argue persuasively that law firms possessing an “ABS culture” will be focused primarily on financial performance — a state of affairs that is, in reality, no different than how today’s lawyer-owned law firms approach things. We’d be well-advised to remove the plank from our own eye before hunting for specks in anyone else’s.

Culture is important to law firms, but not in the way lawyers think. We cite “culture” as a bulwark against the unprofessional and uncollegial forces of the corporate, non-lawyer world, as a filter that differentiates us from the crowd. In reality, it seems to me, the tendencies we think we’re locking out with “culture” are often the very things we’re actually locking in.

Jordan Furlong delivers dynamic and thought-provoking presentations to law firms and legal organizations throughout North America on how to survive and profit from the extraordinary changes underway in the legal services marketplace. He is a partner with Edge International and a senior consultant with Stem Legal Web Enterprises.

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6 Responses to “Vulture culture”

  1. Karen Dunn Skinner

    We had the chance to guest lecture to Mitch’s class at Ottawa U a few days after the Feeney Lecture. You can see our take on the class in the comments to Mitch’s recent post on Slaw, and our own blog (http://bit.ly/WdCpZ7). The students were genuinely excited to get out and change the world of traditional firms. They haven’t yet absorbed the “culture” that you describe so well…yet. But many will. Here’s your Supertramp reference:

    When I was young, it seemed that life was so wonderful, a miracle, it was beautiful, magical
    And all the birds in the trees, well they’d be singing so happily, joyfully, playfully, watching me
    But then they send me away to teach me how to be sensible, logical, responsible, practical
    And they showed me a world where I could be so dependable, clinical, intellectual, cynical

    Great post.

    Karen.

  2. Graham | Rokman Laing

    At the tender age of 36, the Supertramp reference is totally lost on me sorry ;-P

    But anyways, great article once again. You are right. To the lawyer, the non-lawyer world is corrupt, unethical and driven only by financial greed that of course does exist in the ‘professional’ world. A world with a non-conflicting duty to protect ‘client’ interests at their core. A world that is not interested in profit, only a duty to serve. A world that doesnt want to be swallowed up by the larger economy. A world that wants to be alone and independent. A world that makes the simple look complex.

    But beneath lurks the dark murky depths of PEP. The ‘eat what you kill’ LLP business structure which demands ‘profit’ is immediately taken out of the business year after year. The cold ill-structured operation with which cross sell, sharing and collaboration is hardly in abundance. The words ‘billing’ and ‘fee’ peppered with every sentence.

    Its only an illusion to those who are ‘locked in’.

  3. Jeff Carr

    Right on point — as always. Whether “vulture” or “cannibal” the characterization of the culture at many law firms as is an interesting metphorical debate. In either case, it’s not pleasant for the outside customers or for those in the dung heap below those at the top.

    You’ve laid out, once again, why change is so difficult but also why it is more likely than not to come from outside through the appliation of disruptive business models, non-traditional players and ,

  4. Joe Morford

    Culture, in the truly positive sense of the word, can exist in today’s law firm setting – but a firm needs to manage and organize itself in ways that make it real. Not paying people based on the number of hours they bill, but on what they accomplish for the firm (both long and short term), doing away with “origination credit”, paying acceptable but modest salaries with opportunities for significant bonuses, closing compensation so that people only consider (to the extent they think of it at all) what they make, as opposed to what they make compared to someone else, inviting fee arrangements that encourage our teams to focus on achieving the clients goals and getting results, not seeing how long it takes to accomplish them, requiring all who work here (even me as the Managing Partner) to both train and be trained, so as to develop skill sets that add actual value to clients, systematic visits with clients by management, not just the lawyer closest to the relationship, to learn how we can do better, and then actually implimenting suggestions for all clients, not just the one who made the suggestion, and a real focus on “relationships” – with our clients, our communities and each other… all these things as well as constantly communicating the message of what matters is making a difference, as opposed to merely making money, can (and has) created our culture here at Tucker Ellis.

    Are there ramifications to being this sort of firm, both positive and negative? Sure.

    We lose out on some laterals who have skill sets and attitudes we at least initially think would add to what we are seeking to accomplish because we do not guarantee high pay levels or have a lot of fancy titles, but instead merely promise to help people build their careers and as far as compensation goes only assure people we will bonus them to a proper place if all goes as planned. The flip side is we avoid the pretenders and get the real deal people who are pretty certain that in our sort of team oriented system they will actually accomplish the goals we agree upon.

    Time needs expended by our managers to actually talk to people – Partners, Counsel, Associates, Paralegals and Staff – so all know how they are doing and what is expected of them next, both in the immediate, medium and longer term. This sort of individualized, subjective world we live in takes more time to manage than simply filling out forms on what is next for every 4th year lawyer or doing a math problem at year end to compensate people based nearly exclusively on the number of hours they billed. The flip side is it is worth it – as we actually know each other and can nurture and grow our remarkable talent through their professional lives in ways that mesh with where they are right now in their lives overall. The result is our turnover is stunningly low across the board – lawyers and staff alike.

    The lack of any billable hour requirements can frustrate more junior lawyers looking for a hard and fast goal, so this takes some getting used to. In time and with repeated messaging and fair treatment at compensation time folks – we think – come to understand. A nice side benefit here for the 35-40% of our revenue still earned on the billable hour system is we do not see garbage on our bills – expecially the last three months of the calendar year when people (if we are honest about it) can tend to write down anything to try to “hit their bogey”.

    Getting clients to see that this is not just marketing but is real, and that this sort of alignment of our systems with what should be their goals can actually can benefit them, can be hard and frustrating – for many say they do this and that but in reality they don’t. We, on the other hand, have earned over 60% of our revenue the past several years under fee arrangements other than billing by the hour – and we have accomplished this in a firm with over 210 total timekeepers (roughly 160 lawyers and 50 paralegals) and Hallways in 5 cities across the US.

    We welcome more to try this sort of firm out. It is admittedly frustrating at times to see glowing financial reports from other firms we know do not see the world as we do but are at core focused on nothing beyond where the numbers will be on December 31, (fill in the blank year). We invite clients to see that when no one is in the backroom lobbying for “billing credit” if you want me on that project you can actually get a truly great team of constantly trained professionals bringing the best people to the task at hand on your matter. People who know their personal pay is not tied to seeing how long they can take to get your problem solved, but to getting it solved in a way and at a cost to you that makes you want to try us out again the next time an issue arises in whatever specialty is needed.

    We are not perfect, but work each day to get a bit better than we were the day before. We are not the firm for every lawyer or staff member, but we are the perfect firm for people interested in building an institution that is, as we like to say “different and (hopefully) better” than those that currently exist.

    Our decisions on what to do and how to do it are framed in one fairly simple statement we remind ourselves of all the time:

    “Our desire is for all who encounter us to have a better experience than they would with any other law firm. We measure our success on the continuing demand for our services. We have and shall maintain a special culture of excellence, client service, teamwork, diversity and loyalty to our clients, our communities and each other – and believe that together we can vastly improve the manner in which legal services are provided.”

    At our firm, Tucker Ellis, we don’t need “non-lawyer owners”. We need all who chose to work with us to feel like owners, regardless of their title, and for the actual owners to be the “right lawyers” – who seek to improve their own professional lives, and the professional lives of all whom they touch in their work days.

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