ABS in Canada? Closer than you might think

This post was originally published as two articles in the October 25 and November 1, 2013 issues of Canada’s The Lawyers Weekly newspaper. Reproduced here with thanks.

Unless you’ve been making a special effort not to notice them, you’re probably aware of Alternative Business Structures (ABS), the most radical of several developments introduced in England & Wales by the Legal Services Act 2007. An ABS license permits ownership of a law firm, or of any enterprise delivering legal services, by people who are not lawyers. It’s exactly as paradigm-shifting as it sounds.

In the 18 months since ABS status has been made available, more than 200 ABS licenses have been issued in Great Britain by regulatory bodies such as the Solicitors Regulation Authority and the Council for Licensed Conveyancers. Most of these licenses went to existing law firms or into enterprises in the personal injury and road accident sectors, but not all. Here are a few ABS highlights worth considering:

  • Slater & Gordon is the Australian personal injury firm that became the world’s first publicly traded law firm more than a decade ago. S&G has gone on an acquisition spree since gaining its ABS license last August, most recently with its acquisition of Manchester-based Pannone, The firm now counts 460 staff in 12 locations throughout the U.K., and its CEO has confirmed that the firm is eyeing the broader consumer law market.
  • Riverview Law is a corporate law firm that charges fixed fees for all its services. While its original focus was small and medium-sized enterprises, it has drawn interest from large companies as well. Riverview is owned by holding company LawVest, which has applied to become an ABS and is itself owned in part by global giant law firm DLA Piper. Riverview already counts 100 lawyers and plans to double in size over the next several months.
  • The Co-Operative is a nationwide consumer goods and services company that sells groceries, financial services, insurance, travel and funeral services, among other things. Last year, the Co-Op obtained an ABS to convert its existing Co-Op Legal Services division into a full-fledged legal services provider in the areas of family law, real estate, wills, personal injury, and employment law. Its website offers a toll-free number to phone for locations in the caller’s area.

Among the other entities that have received, have applied for, or are known to have interest in an ABS license are legal expenses insurer ULR Additions, venture capitalists Smedvig Capital, the Direct Line Insurance Group, private equity firm Duke Street, legal textbook company Jordans, logistics company Stobarts, outsourcing giant Capita plc, and a couple of accounting firms you may have heard of: KPMG and Ernst & Young.

Many of the new ABS providers have gotten off to strong starts. But not all of them have, and there’ve already been some high-profile stumbles and even failures. Conveyancing ABS In-Deed Online closed down in June just two years after its debut, its demise perhaps spurred in part by an overly hasty stock-market listing after it premiered.

For its part, Co-Op Legal Services reported a £3.4m loss in the first half of 2013 after breaking even in 2012, part of an overall terrible year to date for the parent company. (In fairness, Co-Op Legal did record an increase in revenue over that period, and it plans to stay the course.) And although it’s not an ABS, small-firm franchise provider Quality Solicitors is backing away from its plan to operate legal information kiosks in WH Smith bookstores around Britain. [do_widget id=”text-8″ title=false]

So far, then, the ABS market is playing out much as you’d expect in a startup industry: many diverse players, several early successes, a few notable shortfalls. The important thing, to my mind, is that the early predictions of disaster — non-lawyer shareholders driving unscrupulous behaviour, senior law firm partners selling out their equity shares to private investors, the collapse of professionalism — have not come to pass. Nor do they appear to be on the horizon.

Now, this may be all very interesting to a Canadian reader, but surely, it’s also academic? Whatever the merits of England & Wales’s great experiment in legal services delivery, Canadian lawyers can rest assured that nothing this radical will jump the pond and land in the colonies anytime soon. Right?

Well, maybe not. Four separate provinces are looking closely at potential reform of their legal services regulatory regimes, reviews that include consideration of alternative business structures and the delivery of legal services by entities other than lawyers. Many Canadian lawyers are at least aware of the changes taking place in Great Britain; fewer are aware that we may be closer to similar developments here in Canada than they realize.

Ontario is at the vanguard of this process, of course, having become in 2007 the first jurisdiction anywhere in North America to recognize and regulate non-lawyer providers of legal services (independent paralegals). There are now more than 5,000 paralegals licensed to provide legal services in Ontario.

In the fall of 2012, the Law Society of Upper Canada set up an Alternative Business Structures Working Group, whose mandate includes studying new developments in alternative legal service delivery worldwide, developing criteria to assess these developments, and identifying any legal service delivery models and regulatory changes that the law society should be considering. The ABS Working Group has already heard from many people with an interest in these matters (including yours truly), and it published an interim report in June 2013.

That report recommended continuing study of the issue and engagement with the professions on the subject of (a) limited non-licensee ownership of law firms and (b) a review of existing rules regarding business structures (including the absolute ban on fee-sharing and referral fees with non-licensees). Any recommendations made by the Working Group would be subject to Convocation’s approval. The Group’s final report is slated for spring 2014. (Read this Storify collection of tweets from last month’s LSUC ABS conference, too.)

In British Columbia, the law society has already investigated ABSs, publishing its own report in October 2011, shortly before ABS licenses became available in England & Wales. That report stated that although there was much talk about the promise of innovation and access to justice arising from ABSs, it was too early to tell whether other jurisdictions should follow Britain’s lead in radically liberalizing their legal services regulatory regimes.

But the report did not close the door on ABSs, recommending further study as more evidence came to light. Indeed, this past June, the Law Society of British Columbia’s annual Bencher Retreat was devoted to the topic: “The business of law in the 21st century: Do we risk losing (or can we maintain) our professional values?” Guest speakers (including yours truly again) and benchers spoke at length about emerging issues such as ABSs, access to justice, and the impact of technology on legal service delivery.

In Nova Scotia, at its most recent annual meeting in July, the Barristers’ Society Council approved a project plan called “Transforming regulation and governance in the public interest” (PDF), and began discussing goals relating to another strategic priority, “Enhancing access to legal services and the justice system for all Nova Scotians.” An executive summary of the latter report (PDF) stated that “[n]ew and innovative models for the delivery of legal services would be an essential component of any access to justice strategy.”  This article describes Nova Scotia’s plans in more detail. [do_widget id=”text-7″ title=false]

And in Manitoba, the Law Society has established a committee of local innovators (both those who are lawyers and those who are not) with an intriguing mandate: assume there is no law society, and design a structure and system to regulate legal services. For instance: Should lawyers have a monopoly on legal services, or should they be simply one competitor among many? The innovators will also examine ABSs, law firm regulation, and the controversial issue of recertification (requiring lawyers to demonstrate competence every several years). This committee will report in March 2014, with implementation of its recommendations planned for that fall.

(Separately, it should be noted, Manitoba is also collaborating with Saskatchewan, Alberta and B.C. about a common approach to ABSs.)

As you can see, the issues that these four law societies are investigating go beyond the relatively narrow topic of ABSs. They’re really looking into whether and to what extent legal services regulation in this country requires a serious reconsideration, and maybe even a major overhaul. These concerns, in turn, are prompted by the very real crisis in access to legal services in Canada, and by a sense that we may need to fundamentally rethink how we define “the best interests of the public” in the 21st century.

Having had the opportunity to address Benchers in Ontario and B.C. on these issues, I’m encouraged by what I’ve seen and heard. Each of these four law societies (and, I’m sure, others across Canada) recognize that we’re entering a crucial period in the evolution of the legal market, and that traditional models of legal services regulation cannot and will not pass through this period unchanged. Our law societies are asking the right questions, and I’m optimistic that they’ll come up with good answers.

So this would be the worst possible time for lawyers to again circle the wagons, as we’ve done so often in the past, demanding the continued ring-fencing of our traditional protected territory. Forces far beyond the control of lawyers are now driving this market. I would like to see us work with these forces, not strive pointlessly against them, towards the twin goals of improving access to legal services and enhancing lawyers’ professional values.

Will we see alternative business structures approved in at least one Canadian jurisdiction within the next five years? I’d rate that as a strong possibility. But for us to even get close to that point, we’ll have to engage in an thorough and overdue reconsideration of the purpose lawyers serve in Canada’s legal market.

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.  

Reinventing the associate

Last week’s post, “The decline of the associate and the rise of the law firm employee,” wasn’t just my longest Law21 title on record. It also triggered a detailed response from Toby Brown of 3 Geeks, to which I left a lengthy comment and which in turn inspired a further comment from Susan Hackett of Legal Executive Leadership. Toby converted both of these comments to posts, and I’d invite you to read all three consecutively to get the full exchange of views.

My plan this week is to follow up my original post with two more: one (today’s) that will explore more deeply the past and future role of the “law firm associate,” and the other that will study the whole issue of “lawyer training.”

I don’t really have strong feelings one way or another about Greenberg Traurig’s new “residency” program, largely because (as I noted in my original post) we don’t have nearly enough data about what the program actually involves. If it manages to strike a healthy balance among the needs of the firm, the interests of clients, and the well-being of lawyer employees, then I’m all for it. We’ll have to wait to see how it unfolds in practice. For the moment, I’m  more interested in the implications of introducing another new employment category (“residents”) for novice lawyers in law firms. It raises the whole question of what we mean by “associates,” and why they exist.

For most of law firm history, lawyers who were not equity-owning partners had only one title (“associate”). Associate status represented two things: full-time salaried employment and potential future admission to equity partnership. In theory, associates are lawyers who are learning their craft and honing their skills for the chance someday to become partners — and that does still accurately describe a small percentage of each firm’s associate class. In practice, however, most associates are short-term, leveraged assets whose purpose is to bill hours that fuel the firm’s profits, and who will leave the firm (voluntarily or otherwise) well before the brass ring of partnership comes into view. [do_widget id=”text-7″ title=false]

Many firms have begun to explicitly acknowledge this reality and to call this larger group of associates “staff lawyers” or something similar to indicate their status. Greenberg introduced the title of “practice group attorney” at the same time as it announced its “residency” program. Other firms refer to such lawyers with the unwieldy term “non-partner-track associates.” More senior members of this group, over the past several years, have been classified as “non-equity partners,” highly experienced associates whose time for partnership consideration has come, but about whom there are doubts (on one side or the other) that admission to partnership is a good idea. And now we have the “resident,” a short-term position for newly admitted lawyers that pays less, bills less, and gets “trained” more than a normal associate role.

So, for those keeping score at home, here are some of the ways in which law firms are now describing lawyers who aren’t partners:

  • Associate
  • Resident
  • Staff Lawyer
  • Practice Group Attorney
  • Non-Partner-Track Associate
  • Non-Equity Partner

That’s a whole lot of terms meant to express one basic idea: “You’re not an equity partner.” And for every title on that list other than the first one, there’s an additional component: ”…and you’re not going to become one, either.”

Toby argues that this is no bad thing: all of a law firm’s associates should not presumptively be considered its future partners, not least because few lawyers are truly cut out for the demands and responsibilities of ownership. I think that is certainly correct. But as I mentioned above, the title of “associate” has always carried with it the potential of ascendancy to partnership. Not every associate will become a partner someday; but any associate could become one. That’s the promise and the allure that gives “associate” an extra shine. And it’s exactly this shine, I think, that law firms are trying to remove these days.

Law firms are developing an allergy to equity partners. “Under-performing” partners are being removed from firm mastheads in every jurisdiction, while partner tracks grow longer and “non-equity partner” holding pens become more crowded. Altman Weil’s “Law Firms in Transition” survey explicitly advises law firms: “Make equity partnership very difficult to achieve.” The reason is simple: the revenue pie is shrinking, and the slices are becoming thinner than many partners want. The easiest short-term solution is to remove as many place settings as possible, adding new seats only for lateral recruits who can bring more pie of their own.

So it’s very much in law firms’ interests to lower the expectations of their associate lawyers about their chances of partnership. What many firms would prefer now is new classes of lawyer employees who don’t have all the baggage of “associateship.” These firms want salaried lawyers who work competently and bill profitably, but who neither desire nor expect equity partnership offers. All the rejigging and reclassifying of lawyers who used to be called “associates,” but who increasingly are called anything but that, is in service of this outcome.

The timing for this effort is excellent, because the traditional law firm associate model no longer works very well anyway.

  • New associates cannot be paid handsomely to be trained on clients’ dime as they once were, but firms don’t want to absorb the costs of training on top of the salaries they’re paying, and they’re afraid of cutting salaries because of the potential hit to their reputations in the market.
  • Experienced associates do good work and can still be billed at high rates, but the work they would normally be doing has been grabbed by partners desperate for billings, and the opportunities to gain experience early in an associate’s career are drying up anyway.
  • Senior associates have successfully run the gauntlet and “won the tournament”, but even these few winners increasingly outnumber the available internal routes to equity ownership, leaving them in a restless state of non-equity limbo.

In short, both a driving need and an unprecedented opportunity to replace or reinvent the law firm associate have arisen — and as it happens, they’ve arisen right in the middle of an historic surplus of unemployed lawyers.

In the result, for the next several years (and maybe longer), law firms figure to employ or engage the services of lawyers on much more advantageous terms than in the past. Whether located within the four walls of the law firm or in an outsourced capacity, most lawyers who work for law firms will do so at lower rates, with less job security, on shorter time frames, with less expectation of long-term equity rewards. The idea of “graduating” from associate to partner, from employee to owner, as part of a natural process of law firm development and advancement will lose its traction in many firms. If you no longer want to develop many partners, then you don’t really need many associates.  [do_widget id=”text-8″ title=false]

Is this good, bad, or indifferent? Insofar as firms are recognizing the growing obsolescence of the traditional associate model and are taking steps to rework it or replace it, I think it’s good: that model worked very well in the 20th century but seems a poor fit for the 21st. Agile, flexible workforces are coming to every industry, and the law will not be an exception. But describing this as a strategic shift may be giving law firms too much credit: in most cases, the driving force behind these moves is to reduce personnel costs and compress the ownership pool in order to increase partner profits on a short-term basis.

And it’s the short-termism that worries me. Law firms are meant to be multi-generational entities that grow through a natural cycle of development. You invest in new lawyers at a cost today because you confidently expect your investment to pay off years down the road; you accept short-term losses in exchange for long-term profits as part of a big-picture view of the firm. Law firms everywhere are currently gripped by a fever that drives the opposite behaviour: you accept long-term losses in exchange for short-term profits, because you won’t be around for the long term and you don’t really care what happens when it arrives. This, unfortunately, describes more senior lawyers in more law firms than I care to count, and it’s positioning these firms for a very dangerous future.

The traditional associate model needs to be replaced by something better. But it can’t be better just for law firm partners, or even just for partners and clients, and just for this year’s financial results. It has to be better for everyone, on a sustainable, sensible, long-term basis. If the associate model is replaced by a system that simply strip-mines our legal talent resources for maximum profit for the balance of this decade, leaving the cleanup and rebuild to the next generation, then as both a business and as a profession, we’re going to be in a lot of trouble. More on that in my next post.

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.  

The decline of the associate and the rise of the law firm employee

Earlier this month, Greenberg Traurig became the latest large US firm to take a new approach to its legal talent. Rather than firing secretaries or de-equitizing partners, however, as is all the rage elsewhere, Greenberg proposed something different and potentially groundbreaking: the introduction of a “residency” program for new associates. Here’s how the Am Law Daily describes it:

Join the firm as an associate, but only if you’re willing to spend a third of your time training rather than churning out billable work. The catch? Those who sign on will be paid considerably less than the typical starting associate, will bill at a much lower hourly rate—and may wind up only sticking with the firm for a year.

The offer is the basis of what Greenberg is billing as a new residency program that is being rolled out across its 29 U.S. offices. Firm leaders envision the program as a way of recruiting talented associates it wouldn’t have hired during the traditional on-campus interview process for one reason or another. It will also allow the firm to assign junior lawyers to client matters without billing their work at the usual cringe-inducing hourly rates.

Greenberg is simultaneously creating a new non-shareholder-track position, practice group attorney, that is akin to similar jobs created by Kilpatrick Townsend & Stockton; Orrick, Herrington & Sutcliffe; and others that have moved beyond the up-or-out structure typically employed by large law firms. …

[C]lients have been eager to use the junior lawyers, who cost less than a typical associate, and have allowed them to sit in on meetings and calls—at no cost to the client—as part of their training. The rest of the training, MacCullough says, comes via online courses with the Practising Law Institute, the professional development courses the firm offers all associates, and extra “hands-on learning” with partners without concern about billing for the time.

This initiative emerged from Greenberg Traurig’s Fort Lauderdale office, where new graduates are offered the chance to be “fellows” who resemble associates, but are paid less, bill less, and spend more time training. This innovation has now spread firm-wide. “Once the initial one-year period ends,” the Am Law Daily reports, “residents will either become a regular-track associate, take on the new practice group attorney title, or leave the firm.” (This reminds me of the old college football coach’s admonition against the passing game: “Only three things can happen when you throw the football, and two of them are bad.”) [do_widget id=”text-7″ title=false]

Response to Greenberg’s program has been generally positive, and I can understand why. Anything that offers even partial employment opportunities to new law graduates these days has to be considered a good thing. The “residency” approach contains echoes of the “apprenticeship” programs that firms like Drinker Biddle, Strasburger, Ford & Harrison, Frost Brown Todd, and Howrey pioneered about 3-4 years ago and that I thought might herald a whole new approach to associate training. (They haven’t.) And Greenberg’s residents bear a close resemblance to Canada’s articling students, whose one-year apprenticeship in a law firm is a widely admired (although increasingly flawed) way to introduce new lawyers to practice.

Yet something still seems off. By crafting the position of “practice group attorney,” Greenberg has joined many firms in creating a class of associates who aren’t going to be partners; by introducing “residents,” Greenberg appears to be creating a class of lawyers who, most likely, aren’t even going to be associates. What’s not clear is why either of these new groups of lawyers are inside the firm at all. If what you’re looking for are low-cost, non-essential generators of legal work, why not talk to Axiom or The Posse List or any LPO with offices in Mumbai, Manila, or Minneapolis? Why introduce and maintain yet another costly group of lawyers who aren’t here for the long term?

One possible reason is that the whole point of the residents is to eventually replace the associates altogether. Lower salaries? Essential for continued partner profitability, and more reflective of actual associate value. Lower billing rates? Clients aren’t paying the higher rates anyway, so you might as well find a rate that they will pay. Lower billing targets? There isn’t enough work available for partners to make their targets, let alone new lawyers. As the article makes clear, these are really the only differences between a “resident” and an “associate.” Which of these two classes do you think the firm will want to sustain?

The law firm associate market is way overdue for a serious compensation correction: $160,000 starting salaries were and are ridiculous, relative to both the availability and value of new associates. New lawyers can’t and shouldn’t be expected to bill 1,900 legitimate hours a year, and a system that required them to do so was impractical and unwise at best, improper and unethical at worst. Something had to replace that system, and this may be the replacement.

Greenberg’s model is obviously still in its formative stages, and there’s not much point in exploring it further with such limited data. But it’s possible that it might be part of the next stage, maybe the final stage, in the decline of the law firm associate and the rise of the lawyer employee.

Go back several decades to the emergence of the Cravath model, which originally viewed a small class of salaried associates as future partners who could nonetheless generate profits through leveraged work along the way. The distortion of that model, over time, led to much larger and more profitable associate classes, of which only a few members would make partner — but all the same, the firm and its clients still treated those associates as professionals with potential long-term value. We’re now on the verge of entire associate classes whose only purpose and value is to generate leveraged work. They are not meant to be future partners: they are temporary employees meant to sustain the practices of current partners for as long as those partners need them. [do_widget id=”text-8″ title=false]

You might object that that’s not a good long-term stratagem. But a lot of law firms these days aren’t being managed for the long term, and there’s nothing more long-term than associate development: the investment of serious time and money in hopes of producing future partners. Many firms are employing fewer new lawyers than ever, and they have little incentive to invest heavily in the long-term development of the ones they do. They don’t need more equity partners — many firms are busily culling their own ranks — and if they do, they’ll get experienced, plug-and-play veterans with books of business via lateral acquisitions in the free-agent market. (Where laterally trained partners will come from in future, if firms no longer commit to investing in new classes of associates today, is not firms’ leading concern at the moment.)

It’s therefore possible that the era of the “law firm associate” — the partner in training — is now coming to an end, as I suggested back in 2009. Replacing it might be the era of the “lawyer employee” — here today, gone tomorrow, with a completely different set of expectations on each side about the nature of the relationship. It’s true that at several firms, the transition I mentioned above has long since taken place: most associates are essentially revenue generators. But the title of “associate” has a lengthy history and carries powerful expectations: “associateship” has been the precursor to “partnership,” just as adolescence has been the precursor to adulthood. Take away the title of “associate” and replace it with something smaller and poorer — “intern,” “resident,” “employee” — and the impact is profound.

This must surely be an attractive route for many law firms eager to reduce salary costs, minimize training expenses, and boost partner profits. But there’s a risk to the law firm that trades associates for employees straight-up, that diverts resources from internal development to external acquisition: it might permanently lose its capacity to develop any lawyers at all.

The ability to onboard a new lawyer, bring her into the firm’s cultural and structural orbit, develop her capacity to produce higher value over the course of time — this is an organizational skill, no different than any other a firm might possess. A firm that ceases to take internal development seriously will see that skill atrophy: it will become a muscle rarely exercised, with predictable results. PD professionals may leave the firm for better environments elsewhere; partners may lose whatever remaining interest they might have had in bringing along new lawyers; potential recruits may regard the firm as a dead end. These outcomes might not matter to the firm today. I guarantee that they’ll matter down the road.

Once a law firm switches off its lawyer development engine, it’s not easy to rev it back up again — and if you intend for your firm to be operating more than five years from now, it’s an engine you will desperately need to work at some point. That’s the tradeoff, whether they realize it or not, that some law firms now seem poised to make.

There’s another risk to this development, by the way — a threat to the continuing development of the legal profession itself. But that’s for another post.

[Here’s the next instalment in this series: “Reinventing the associate.”]

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.  

Law firm innovation: From idea to implementation

I was honoured to deliver a 20-minute TED-style presentation last week at the 2013 Futures Conference, produced by the College of Law Practice Management and hosted by the University of Chicago-Kent Law School. I was hardly the main attraction — Ann Lee Gibson and Bill Henderson gave tremendous presentations, and people are still talking about Stephen Mayson‘s extraordinary keynote address. If you want to view any or all of these sessions, they’re available online (Stephen’s is especially recommended, despite its length). if you’d like to hear my thoughts and you’re short on time, please feel free to view the video.

But if you’re interested, I also prepared a companion article for the presentation, which I’ve reproduced below. As the title of this post suggests, the object of both my presentation and paper was to get us talking about actual, practical ways to make innovation happen inside a law firm. Please share your thoughts and your own recommendations for achieving this daunting task in the comments below.

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The great actor lay on his deathbed, and his friends gathered close to him. His best friend, holding his hand, leaned in and murmured, “You poor man. Dying is so hard.”

The actor’s eyes shot open and he glared at his friend. “Dying is easy,” he snorted. “Comedy is hard.”

In much the same vein, we can freely admit that the idea of innovation is easy — it’s the work of a moment to imagine any number of ways in which law firm operations could be improved. Implementation — the successful, sustainable execution of the innovation — that’s what’s hard. And the law firm landscape is littered with the remains of many failed innovations that couldn’t cross the bridge from idea to implementation. So how can it be managed?

To my mind, there are five steps in this process — and I’m sorry to report that each step is more difficult and challenging than the previous one. But it seems to me that the successful implementation of a legal innovation requires most if not all of these elements, in roughly this order. This is no small challenge — in fact, as we’ll see at the conclusion of this article, it’s literally an existential challenge for law firms today. But it can be done. And right now, in this environment, it has to get done.

1. Facts. Start with data. Evidence. Verifiable information. Business intelligence. We have a truckload of myths about lawyers and the legal profession, and we have no shortage of opinions and assertions masquerading as law firm strategies. What we need are facts. Specifically, you need facts about your law firm, data about your business. Most law firms know astonishingly little about themselves beyond what they spent, what they billed, and what they made last year. We need to know our firms inside out financially and structurally, both retrospectively and prospectively.[do_widget id=”text-8″ title=false]

Here’s an easy example: “What’s your cost of doing business?” What do you spend, what resources do you consume, to run your business and deliver your services? What did it cost you to serve this particular client or provide this particular service last year? What will it cost next year? We are barreling towards a legal services market where fixed prices for products and services will dominate. But without precise knowledge of your costs, and without a workflow process that ensures those costs are sustainable and predictable, you cannot name a fixed price that will generate a profit.

Here’s a harder one: “What do you actually sell?” I don’t mean that in the abstract sense of “value to clients” and so forth, although that’s obviously important. I mean: what, precisely, is your inventory? What do your clients actually give you money to accomplish? What are your deliverables? Not just: “Conducted a merger: $500,000.” What were the specific elements? Who or what did them? How long did they take? How much did they cost? Break down everything you do. No other business with the annual turnover of a law firm is so ignorant of its own inventory.

You need facts in order to properly diagnose your firm, to choose the right activities and make the right decisions for its future. But more importantly, you need them to get the attention of your partners. Show them that you have evidence for what you’re saying and doing. We’ve had more than enough faith-based decision-making in law firms. It’s past time to start making reality-based decisions instead.

2. A Catalyst. You need some sort of outside intervention, something to introduce a sense of urgent change. Law firms are not, shall we say, naturally given to proactive self-improvement. Most are what you might call “steady state”: self-contained environments, sealed off from outside influences. It takes a lot of pressure to break that steady state. Fortunately (for our present purpose only), you can have your pick of high-pressure catalysts right now. Falling revenue. Declining profits. Loss of a key client, partner, or practice group — choose one or more.

If you can’t find a catalyst, consider making one: Invite senior representatives of your five biggest clients, and the relationship partner in charge of each one, to a discussion panel in your office. Ask the clients to talk about the pressures they’re under, or the three things your firm could do that would make them break off the relationship, or three things they would handsomely reward your firm for doing. Bring the crisis home to the partners with the most to lose.

3. A Process: If you hope to actually accomplish something big and disruptive in a law firm, you need to have a clear, detailed process in place. How to do this? I say, start with a basic legal project management (LPM) template. Fire up those Gantt charts and lay out the following: “This is the goal. These are the steps. These are the milestones. This is the timeframe. This is the budget. These are the people. These are the performance expectations. These are when the expectations will be tested. This is the nature of the commitment we’re all making to this project.”

And then follow up, all the way through to the end. You don’t launch an innovative change process in a law firm the same way you launch a ship. You don’t smash the champagne bottle on the hull, call out “Bon Voyage,” and look forward to its arrival on the other side of the ocean. You walk it through, every step of the way, and see it safely through the storms. And that brings us to the next tough step:

4. Leadership. I don’t necessarily mean leadership from the top, the managing partner or CEO, although you certainly do need that. In my experience, though, these are usually the most forward-thinking, change-amenable people in the firm.

I’m talking more about the formal or titular leaders, the practice area heads and industry group chairs, as well as the informal ones, the heavyweights with the biggest books of business. In many firms, those people are not actual managers with leadership skills, and they have the most vested interests in the status quo. When they see change buzzing in from any direction, their first instinct is to grab a very big flyswatter.

What do you do in that situation? If and as possible, get those people out of formal leadership positions any way you can, and replace them with people who possess actual leadership skills and/or are on board with the change process. Buy the incumbents off with a bonus for retiring the leadership position, or give them a fancy title, “Strategic Counsel” or “Chair Emeritus” or some such. Lawyers love titles. I’d like to also suggest inspiring them to join the cause and help lead the change process, but I’m afraid my view of the average law firm partner is too jaded to allow for that.

There’s a larger issue here, however. Projects that ask lawyers to do something new, that require non-billable effort, and that will change the way they do their jobs, have a very high mortality rate in law firms. The reason is simple: non-performance by lawyers of requested or assigned duties is common, and few if any consequences flow from that non-performance. True law firm leadership is evidenced by both a willingness to place oneself at the collision point between what the firm needs and what its individual partners want, and an ability to survive that collision. And that brings us to our final ingredient: [do_widget id=”text-7″ title=false]

5. Courage. Here’s the crucible. If you seriously want to get an innovation from idea to implementation in your law firm — no matter the size of the innovation, no matter the size of the firm — you must have courage. You must be ready and willing to absorb criticism, complaints, threats, and tantrums, and you need to be equipped to deal with them swiftly.

If you want to lead a law firm innovation, I recommend this thought experiment: fast-forward to the day, several months down the road, when the process is starting to really dig in and true change looks like it might actually happen. One of your key rainmakers walks into your office, closes the door, and says, “Let me make something clear. You can have all the fun and games you want. You can introduce as many little innovations as you like. But not in my department. Not in my practice. Try to push me on this, and tomorrow I’ll walk right across the street to our biggest rival, and I’ll take my top five clients with me, and the first you’ll hear about it is when you get their press release announcing the move.”

What do you do? Well, if you’re like most people in that situation, then it’s quite likely that — let’s put this delicately — you’ll cave. “I understand,” you’ll say placatingly. “I know how disruptive this is. We’ll exempt you and your department from this process.”  But I’ll tell you: if that’s going to be your response, you might as well have never even begun the process. You’ll have flushed away huge amounts of time, energy, resources and goodwill, while simultaneously poisoning the well for future innovation efforts, because you’ll have acknowledged openly that around here, innovations apply only to those without the power to evade them.

If you’re serious about innovation, and if you have the leadership and the courage on hand, here’s how I think you should — how you must — reply: “Thank you for coming to me with this. And thank you for all your valued contributions to this firm and its clients. But this is a law firm, and we’re a team. We want you on that team, but if this is how you feel, then you don’t need to wait until tomorrow. You can leave right now.”

I know that this is “unrealistic” and “impossible” and other terms people use to describe something they don’t want to do. The other partners will come screaming in, of course. “You can’t let him go. He’ll take X clients, deprive us of Y money. You’ve got to keep him here.” And you need to respond, “He’s never really been here. If he’s ready to walk out over this today, then he’ll walk out next week over something else, or next month when he gets a better offer, or when he retires next year, having mentored no one and developed no one to take over his practice. He’s going to leave someday; it might as well be on our terms.”

That’s a highly dramatic example, obviously. But implicitly or explicitly, that’s the threat (and the fear) that poses the biggest obstacle to change in many law firms. And it at least serves this purpose: if you have an idea for an innovation in your firm and you really want to see it happen, fast-forward several months after the launch, to the moment when that partner is in your office, issuing his ultimatum. If you don’t think you can stand up to that lawyer — if you or your partners lack the courage and leadership to draw that line — then I would recommend postponing any innovative efforts until you can.

But this is exactly why you need to start with facts, to make clear just what’s at stake; why you need a catalyst to demonstrate that the time is now; why you need a process to get the wheels moving and generate just this sort of crisis point. This is how you gain the commitment of leadership to put the interests of the firm ahead of the interests of its individual partners.

Because really, at this stage of the game, this isn’t just about innovation anymore. This is really about explicitly deciding a long-simmering, implicit debate over whether you’re running a farmer’s market of sole practices under one roof, or whether you’re running an actual law firm. Firms have put off dealing with this painful question for as long as they could, but the pain has only gotten worse the longer they’ve waited. The time has now come to finally deal with it.

Marshal your facts; identify your catalyst; lay out your process; call on your leadership; and summon your courage. That’s how innovations get done. It’s also how law firms survive, or don’t, in this environment.

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.  

Why lawyers don’t innovate

“How can I get my lawyers to change?” This might be the question I hear most frequently from managing partners and law firm CEOs who are trying to help their organizations innovate and adapt to the new marketplace, but who are frustrated by the fierce resistance they encounter. The conventional culprit is lawyers’ bullheaded refusal to countenance any sort of change, driven both by an inherent attachment to the status quo and by the comfortable livelihoods that many lawyers make and see no need to disturb.

But that’s only part of the story. The main problem with the question above is simple: You can’t make people change. You can’t really make people do anything, short of using a weapon, a court order, or post-hypnotic suggestion. Human behaviour is ridiculously complicated and, based on Daniel Kahneman’s work at least, driven to an alarming extent by unconscious habits and urges.

People do what they feel like doing, and most lawyers feel like doing today what they did yesterday. David Maister’s final book, Strategy And The Fat Smoker, made this point very clearly: No matter how sensible and positive a particular change might be, lawyers (like everyone else) will change only if they want to change. And very rarely do they want to do that.

So how can law firms evolve — specifically, how can they innovate and reconfigure and adapt to new circumstances — when their owners, managers and workers don’t wish to do so? Law firm innovation is clearly possible — there are plenty of examples out there to inspire us — so it can be done; but how?  [do_widget id=”text-8″ title=false]

A good place to start is a terrific article published in a recent edition of The New Yorker by Atul Gawande, the medical doctor whose book The Checklist Manifesto should be required reading for all managing partners. Gawande’s magazine article, “Slow Ideas,” explores the complex and seemingly random nature of innovation, using examples from the history of medical advancements. Surgical anaesthesia and antiseptics (Listerism) were both discovered in the 19th century, for example; but while the former caught on almost immediately, the latter struggled to gain acceptance for decades. Why? Gawande suggests a couple of reasons:

First, one combatted a visible and immediate problem (pain); the other combatted an invisible problem (germs) whose effects wouldn’t be manifest until well after the operation. Second, although both made life better for patients, only one made life better for doctors. Anesthesia changed surgery from a brutal, time-pressured assault on a shrieking patient to a quiet, considered procedure. Listerism, by contrast, required the operator to work in a shower of carbolic acid. Even low dilutions burned the surgeons’ hands. You can imagine why Lister’s crusade might have been a tough sell.

That second reason certainly resonates in the legal market. Courthouse security, to draw a parallel, is pretty airtight, because failing to ensure it would threaten judges, lawyers and litigants alike. But our failure to ensure access to justice continues to be a scourge, in no small part because although it’s terrible for members of the public, it’s not really much of a problem for lawyers at all.

But difficulties around innovation aren’t restricted to doctors and lawyers; they’re universal. It’s not that we don’t know how to make a process better, and it not that the people in charge of a process don’t want things to be better. It’s that getting people to do things differently, in order to achieve that better outcome, is incredibly hard.

Consider the three most common methods cited by Gawande that are traditionally used to change behaviour:

1. Politeness: You ask people nicely to do things differently. But only some do, and not all the time, and the whole process collapses if the kindness of others is absent or withdrawn. Asking lawyers nicely to change the way they do business does not have a long and notable record of success.

2. Force: You punish people for failing to do things differently. But if the threat of force outweighs the rewards of the job (or if people have other options), they’ll quit rather than risk the penalty. In the law firm context, lawyers threatened with penalties take their books of business across the street to rival firms.

3. Incentives: You provide money or other rewards to motivate people to do things differently. But as any managing partner will tell you, this cure is often worse than the cause. What metrics do you choose? How do you track compliance? How do you keep the system from being gamed? Worst of all, how do you actually allocate the rewards among numerous participants? Veterans of partner compensation committees know these questions all too well.

Politeness, force, and incentives constitute 99% of the methods used in law firms to try to effect change and encourage innovation. Few of these efforts succeed, and many of those successes prove to be only temporary. But there’s another, better way identified by Gawande: much simpler, much easier to understand, and much easier to train people to do. The only problem, from lawyers’ perspective, is that it requires them to do something most of them don’t like. It requires them to take enough time and care to talk with each other and build trust with each other — and through these efforts, to change “the way we do things around here.”

[N]either penalties nor incentives achieve what we’re really after: a system and a culture where X is what people do, day in and day out, even when no one is watching. “You must” rewards mere compliance. Getting to “X is what we do” means establishing X as the norm. … To create new norms, you have to understand people’s existing norms and barriers to change. You have to understand what’s getting in their way. …

Technology and incentive programs are not enough. “Diffusion is essentially a social process through which people talking to people spread an innovation,” wrote Everett Rogers, the great scholar of how new ideas are communicated and spread. Mass media can introduce a new idea to people. But, Rogers showed, people follow the lead of other people they know and trust when they decide whether to take it up. Every change requires effort, and the decision to make that effort is a social process.

This is something that salespeople understand well. I once asked a pharmaceutical rep how he persuaded doctors — who are notoriously stubborn — to adopt a new medicine. Evidence is not remotely enough, he said, however strong a case you may have. You must also apply “the rule of seven touches.” Personally “touch” the doctors seven times, and they will come to know you; if they know you, they might trust you; and, if they trust you, they will change. That’s why he stocked doctors’ closets with free drug samples in person. Then he could poke his head around the corner and ask, “So how did your daughter Debbie’s soccer game go?” Eventually, this can become, “Have you seen this study on our new drug? How about giving it a try?” As the rep had recognized, human interaction is the key force in overcoming resistance and speeding change. [Emphasis added]

People change their behaviours when encouraged to do so by someone who has earned their friendship and trust. That’s all. It’s just that simple — but in many law firms, it’s also just that difficult.

Law firms have become extremely low-trust workplaces, and the larger and more diffuse the firm, the lower the trust.

  • National and global firms are overflowing with “partners” who have never even spoken to each other, and never will.
  • The gap between the highest- and lowest-earning members of a partnership is at least 10 times in many firms, much higher in others — and those gaps grow every time a new partner is “recruited” with the promise of money siphoned from less powerful colleagues.
  • Many law firm partners (and not just in large firms)  find themselves in direct competition for business with lawyers in their own firm.
  • Many law firm partners have little to no information about the real state of their firm’s finances.
  • Even in smaller firms, lawyers fight each other for origination and billing credit in a zero-sum game where every gain is a “partner’s” loss.
  • As client business continues to shrink, the growing threat of de-equitization hangs over every seat at the partnership table, save those few within the inner circle of management — and the skulduggery employed to remove seats from some of these tables would impress a Machiavellian prince.

This cultural crisis in traditional law firms is full-blown, and I don’t see any way for it to end happily. But even in well-adjusted law firms, you’ll still find a certain reluctance among many lawyers to develop with their colleagues the kind of friendship and trust that makes possible the innovations Gawande describes. Why is this? I can think of a few reasons:  [do_widget id=”text-7″ title=false]

  • Higher productivity expectations: Lawyers at many firms are under constantly rising pressure to bill hours and justify their continued presence on the roster; this priority shoves aside more pedestrian matters such as conversations with colleagues (the non-billable kind, anyway).
  • Increased lawyer mobility: Why invest time and effort building relationships with colleagues who could be competitors tomorrow? Why open up to someone who could eventually exploit the vulnerabilities you provide them?
  • Lawyers’ personal conservatism: (In other contexts, it would be called shyness), rooted in our risk-averse nature: trust is built by extending confidence before it’s been fully earned, a leap of faith that helps grow a relationship — but lawyers have a near-pathological aversion to risk, and risk is at the heart of trust.
  • Lawyers’ antisocial tendencies: David Maister tells another story, of a law firm whose partners asked him to build a sort of automatic compensation system; when he told them that successful compensation systems were personal and were built on trust, they replied, “But we don’t want to have to trust each other; that’s why we want the system.”

So when managing partners ask me, “How can I get my lawyers to change?” I have to respond: You can’t make your lawyers do anything they don’t want to do. They’ll do something only if they decide they want to do it, and they’ll want to do it if encouraged by those they like, respect and trust. In a number of law firms, I’m sorry to report, building a culture of “like, respect and trust” among lawyers can be considerably more difficult than getting lawyers to adopt a new innovation. It requires a level of effort and openness and generosity that many lawyers these days feel they can’t afford. But I’m coming to think it’s the key to successful, long-term, sustainable law firm innovation. And it can be done.

Gawande ends his article by relating the story of a trainer in India trying to get a rural birth-delivery nurse to adopt simple yet critical steps to increase newborns’ odds of survival and good health. It took numerous visits and the slow establishment of a friendship between the two professionals before the nurse’s behaviours began to change. Gawande later interviewed the nurse.

“Why did you listen to her?” I asked. “She had only a fraction of your experience.”

In the beginning, she didn’t, the nurse admitted. “The first day she came, I felt the workload on my head was increasing.” From the second time, however, the nurse began feeling better about the visits. She even began looking forward to them.

“Why?” I asked.

All the nurse could think to say was, “She was nice.”

“She was nice?”

“She smiled a lot.”

“That was it?”

“It wasn’t like talking to someone who was trying to find mistakes,” she said. “It was like talking to a friend.”

 

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.  

Ready for the future? Your survival kit survey results

Previously on Law21 … last month, to be exact, I designed another survey for your consideration. This one was a good deal more complex than my first Law21 questionnaire, which simply asked you to prioritize 10 characteristics of a modern law firm.

This time around, we postulated a “future legal survival kit,” giving you 15 features with which to equip a future firm and asking you to assign them points according to how important you thought these elements would be. The survey was posted in the dead of summer, so I was pretty pleased to get the 73 responses that we did. I also suggested (and still recommend) that you check out Evolutionary Road, my new book published by Attorney At Work, as both a guide to help you complete the survey and as a fairly transparent, yet hopefully still effective, promotional effort.

So let’s get to the results, which I’ll follow with an analysis of each entry and my own rating of each one.

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So, the top choices of our 73 respondents (those options that received 10 points on average or more) were strong client relationships, integrity, and legal know-how. I can’t help but observe that if I had asked for the top five features of a traditional law practice in the halcyon bygone days of the profession, I would have wound up with a very similar list. This isn’t to say that Law21 readers are reactionary conservatives, which I’m pretty sure you’re not. More likely, it represents a yearning for the future profession to return to the fundamental bedrock values that we perceive underlay the successful law practices of our parents’ and even grandparents’ generations.

I can understand that desire, and I approve of it to a certain degree: there’s an emerging consensus that whatever lawyers and law firms have morphed into from the 1980s to the present day, more has been lost than gained in the transformation. But however much we may wish for a return to the old days (and they weren’t wholly fabulous, let’s keep in mind), they’re not coming back. We can’t simply revisit the past to build the future: the architecture of legal practice has to adapt.

Here’s my brief analysis of, and my own opinions on, the 15 features listed in the survey:

1. EQ.  Survey: 11.89. Me: 10

I was pleasantly surprised by how well emotional intelligence was rated, and it gives me hope that lawyers are coming to appreciate not just the importance of communication and client service, but also how these methodologies need to be infused with the virtues of attentiveness, sincerity, and personal connection. It matters that we care, and it matters that we get that fact across.  [do_widget id=”text-7″ title=false]

2. Connections.  Survey: 11.49. Me: 0

Here’s the first major diversion between me and all y’all. I can see the desirability of having strong relationships in place to help jump-start a future law practice. But to my way of thinking, this is a secondary characteristic, one that I can develop if I have many of the other listed skills and assets. My zero doesn’t suggest that I think this trait is worthless; it’s simply that I value other things more.

3. Moral Fibre.  Survey: 10.73. Me: 20

I’m reassured that you rated integrity so highly — this is an asset we don’t always think about when assembling our advantages. But for me, this is a cardinal virtue in a lawyer: not just having moral character, but having a reputation for it. In a future legal market riddled with noise and confusion, trustworthiness and personal reliability will be a tremendous competitive benefit, not to mention an inherently good thing to possess.

4. Legal Knowledge.  Survey: 10.16. Me: 0

Again, it’s not that I believe legal know-how has no value in a law practice; obviously it does. But I don’t need to personally possess this feature or have it in place, in-house, in my practice. Legal knowledge is now widespread and easily accessible, and its price keeps dropping. I can outsource this asset, retrieve it when and from whom I need it, and build up other resources instead.

5.  Innovation.  Survey: 8.63. Me: 0

We’ve now moved out of the top four and into the single-digit answers, although 8.63 is still above average (assigning equal points to all 15 choices would mean 15 awards of 6.66.) This one was a tough call for me, as it came down to a choice between Innovation and Risk-Taking, which are related but different ideas. But for reasons I’ll set out below, I went with Risk.

6. Solutions R Us.  Survey: 8.53. Me: 20

This was my first really big surprise: I felt sure that problem-solving would rank more highly. To me, this is a primary lawyer characteristic, one from which many other assets flow. People seek out lawyers when they have challenges they can’t solve: we’ve always been able to meet that need ourselves and we’d always better be ready to do so. Problem-solving lets us anticipate risks and opportunities, too.

7. Pricing Strategies.  Survey: 7.54. Me: 20

Given the array of other features on offer, I can understand how people might assign pricing a roughly average score. But to me, it’s a paramount ability, one on par with integrity and problem-solving. We cannot survive in a future legal market unless we are experts at pricing our services, which in turn implies we are experts at managing our business costs. This is the last of my three “20” scores.

8. Process Mastery.  Survey: 7.45. Me: 10

I almost gave this one a 20 as well, but the fact is that I can probably acquire skills and techniques in process management from third parties. But as a lawyer of the future, I require at least a familiarity with and appreciation for the importance of systems and procedures in running a profitable business in a legal market where many services are heading towards commoditization.

9. Techno-Wizardry.  Survey: 5.78. Me: 0

We’re now entering the final tranche, where all entries received below-average support. Technology, like process, is something with which every lawyer will require at least a nodding acquaintance and comfort. But tech expertise can be outsourced more readily, and the rapid evolution of technology tools argues against making it a core lawyer feature of a modern law practice.

10. Financial Facility. Survey: 5.46. Me: 10

I thought this one might rank more highly than it did. Thanks to self-selection bias and legal education failures, few current lawyers entered the profession with any degree of financial literacy, and many still lack much business knowledge or instinct. These lawyers already struggle to compete in a closed market against other equally challenged lawyers; how will they survive in a real market against real businesses?

11. Risk Acceptance.  Survey: 5.18. Me: 10

Why did I choose risk appetite over a flair for innovation? Because the former is, I believe, critical to both business and lawyer success: you can’t run a risk-averse business in a competitive market, and you can’t properly advise clients without recognizing and integrating the reality of risk in everyday life. Innovation is very useful, and I’d take it if I could. But it’s not as essential as risk acceptance.

12. Nice Niche.  Survey: 5.12. Me: 0

I actually do think niches will prove to be important characteristics of future law practices, especially for solo and small-firm lawyers: much of what we now call “general practice” law will be lost to private companies and computers. But I came to believe that a niche is a result of career success, not a cause, and you appear to agree with that assessment.

13. War Chest.  Survey: 5.1. Me: 0

Interestingly enough, this was the first entry I thought of when conceiving this survey, and I thought I would rank it highly. But eventually, I came to see it as a secondary, not primary feature, not least because it’s a non-renewable resource: once the money’s spent, it’s gone. There’s never been a better time to find venture funding for startups, and that applies to the law as well.

14. Recruiting Prowess.  Survey: 4.6. Me: 0

I should admit that I planted this one partly as a red herring. While I think it will be important to attract the right people with ease, this entry was added more as a test of whether people think the current frenzy for lateral hiring of partners with big books of business will continue to be a staple of law firm strategy in future. I sure don’t think it will, and happily, neither do you.

15. Famous Brand.  Survey: 4.33. Me: 0

Someone’s gotta be last. I actually thought this one would and should rank higher: reputation and prestige are like catnip for lawyers, and not without reason, because a well-known name is central to our ability to get our phones ringing. But fame and prominence are things you reap, not things you sow. If you’ve chosen among the other 14 features wisely and executed them well, this one will follow.

So there you have it: my prescription for a future legal survival kit:

20: Moral Fibre

20: Pricing Strategies

20: Solutions R Us

10: Emotional Intelligence

10: Financial Facility

10: Process Mastery

10: Risk Acceptance

Whether or not you took the survey, tell us now: do you think this is the best future survival kit? What would you have packed more of, or done without, and why?

And of course, keep in mind: this isn’t really a hypothetical scenario at all. This is the situation facing your firm, today, right now. So what will you do?

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.  

Law firm profitability metrics: Just subtract lawyers

I’ve received a lot of great feedback and commentary on my post earlier this week, “Death to Profit Per Partner,” none of it better than from my friend Toby Brown of 3 Geeks and a Law Blog. In a post at 3 Geeks this morning, Toby channeled the spirit of Weekend Update in challenging some of the premises and conclusions of my post. Here’s a sampling:

Although [Jordan] makes many arguments for why and how PPP might be a negative force, he misses the main point of why PPP or any other law firm profit metric exists. They exist to drive behavior. Firms need their partners to behave in profitable ways and need to set clear expectations of what those ways are. Without a clear expectation, firms can fully expect partners to perform in whatever way enhances their self interest, regardless of its impact of the economic health of the firm.

Giving Jordan credit, currently firms seem to only have the goal of improved profits (however they might be defined). I am in complete agreement that for firms to be successful for the long haul, they need a better goal: something like being the best and most cost effective at addressing their clients’ legal needs. Focusing on client needs does lead to success. But then we still need to define success. And ‘profitable’ needs to be part of that definition.

The fact that a given PPP number is not a true mean or median is beside the point. The real point is whether profits are healthy. PPP is actually a fiction, like most profit methodologies. However, without having profit be part of ‘success’, then a firm risks going out of business and ending its ability to be the best at addressing client legal needs.

Toby invited me to respond, and I gave it my best Jane Curtin. I recommend you click over to Toby’s post to read his entire argument and the ensuing dialogue. But here’s essentially what I had to say:

I disagree with the contention that the main point of why PPP (or any other law firm profit metric) exists is to drive behaviour. The main point of a profit metric is to measure profits. That’s what it’s there for. A law firm has many tools to shape behaviour, some of them explicit (compensation and bonus systems, for example) and some implicit (cultural expectations and peer pressures). But in almost every case, a law firm uses only one method (PPP) to tell itself and others whether and what to extent it’s healthy. The choice of profit metric does have a distant, secondary influence over behaviour (more on the relationship between the two below), but that’s not primarily why it’s there. [do_widget id=”text-7″ title=false]

It’s entirely correct to say, as Toby does, that “[f]irms need their partners to behave in profitable ways and need to set clear expectations of what those ways are.” But we diverge at the sentence following: “Without a clear expectation, firms can fully expect partners to perform in whatever way enhances their self interest, regardless of its impact of the economic health of the firm.” I would argue that in fact, that’s exactly the situation we have now: partners do act in their self-interest, aggressively so, and firms’ current choice of PPP as their profitability metric directly encourages this.

PPP is a profitability measure based on the interests of partners, not on the interests of the firm. When it comes to PPP, the profit metric does not drive partners’ behaviour and priorities; in an unhappy twist, it’s partners’ behaviour and priorities that have driven the choice of this metric.

There’s no question that profit does need to be somewhere in our definition of the “success” of a law firm (unless you’re running a non-profit enterprise, which very few lawyers are). Whether profit is higher or lower on the list of success attributes will vary from firm to firm. But the main point of my original post was that it can’t be the sole criterion. More importantly, though: if we do use “profit,” we can’t define it as “individual partner profit,” because that will only maximize the natural human tendency to look out for oneself above all else. “Firm profitability” is the only sustainable and sensible way to frame the question of the legal enterprise’s financial success.

Now, this leads us to a critical point, as framed by Toby: “There is a need for a real debate over which profit methodologies do make sense for law firms.” I am assuredly not an economist, and I can’t speak with any authority as to what the best methods might be. But I do strongly believe this: calculating profit using volume of lawyers as a denominator is not only self-defeating, it’s also on the verge of obsolescence. This applies not just to PPP, but also to its current popular rival metric, RPL (Revenue Per Lawyer). It doesn’t matter if we’re talking about partners, associates, or both: “Lawyers” will soon be a mostly irrelevant factor in the equation.

Law firms in the future will employ far fewer lawyers, and include far fewer partners, than they have in the past. More legal work (and much more quasi-legal or fully clerical work currently billed by lawyers) will be routed to systems, software, para-professionals, temps, and LPOs. For a perfect example of this trend, look at Winn Solicitors in the UK: a hugely successful firm, £10 million in annual profits, loads of non-lawyer and para-lawyer staff, and essentially just one partner. Measured by PPP, this car accident law firm is about 10 times as profitable as Cravath or Skadden. No offence intended to Winn, but do we really think it’s 10 times better a firm?

Starting now, and increasingly in the coming years, law firms are going to make a lot more of their money through non-lawyer means. This is why it’s absurd to cling to a lawyer-centred metric like PPP. Defining law firm profitability by lawyer is like defining Wal-Mart profitability by salesclerk. The only way to know if a law firm is profitable is to look at the profits of the firm. The longer we keep our focus on individual partner profit, the more time we’ll waste measuring the wrong thing.

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.  

Death to “Profit Per Partner”

It’s time for law firms to junk “average Profit Per Partner” (PPP) as a measure of profitability and success. Past time, actually: our continued adherence to this shallow and self-centred metric is a prime contributor to the BigLaw existential crisis we’ve been reading so much about lately. By using PPP as the primary (if not the only) criterion by which to assess our law firms’ health, we perpetuate a host of self-destructive habits and impair our ability to operate our law firms in a truly profitable and professional manner.

There are two broad categories of reasons why PPP is a disastrous success metric for law firms. The first category has to do with the narrow and simplistic nature of this measure and its inherent definitions of value. The second is related to PPP’s increasingly outdated devotion to individual shareholder profits.

Let’s start by understanding exactly how primitive average profit per partner really is. First of all, it’s “average” —  adding up total firm profits, dividing by number of partners, and ending up with an amount that might well reflect no single partner’s profit at all. (Recall Bill Henderson’s dismantling of the concept of a $90,000 “average starting salary” for new law graduates, when he demonstrated the bimodal distribution of such salaries and that virtually no new lawyers actually earned $90,000 in their first year.) With the ratio between highest-earning and lowest-earning partners now more than 9 to 1 throughout the AmLaw 100, an “average” profit is almost meaningless, too easily skewed by outliers at either end.

We might improve slightly on PPP if we adjusted it to measure “median profit per partner” — at least then we’d have some confidence that a few partners are actually making that amount, and outliers wouldn’t distort the data. But even here, we run into another fundamental problem: the definition of “partner.” Law firms have tended in recent years to extend this title to lawyers, and retract it from them, based largely on their present accounting needs: we’re currently in the depths of a “de-equitization” trend, evidently based on a desire to reduce the number of seats at the table and the number of denominators in the PPP equation. This is worse than the tail simply wagging the dog — this is the tail deciding whether there’s even a dog back there or not. If a metric is going to determine your growth strategy, it had better be a damn good metric. [do_widget id=”text-7″ title=false]

But PPP is not a good metric: it drives selfish, irrational, destructive behaviour. If a firm’s PPP dips precipitously or its position in the AmLaw rankings falls more than a few slots, a veritable death watch is created for the firm, both inside its walls and in the wider market. Influential partners and rainmakers, most of whom know very little about actual firm profitability, feel compelled to jump to firms higher in the rankings — with no regard given to whether the “higher” firm will be better for them or for their clients. Morale falls within the firm, recruiting become harder, CVs start circulating — all because one simplistic metric says the firm is in trouble. Entrepreneurs would be shocked by the credulity and financial ignorance of lawyers revealed by PPP contests.

PPP is further susceptible to the widely recognized (but rarely acknowledged) fact that every set of PPP figures published for large law firms is entirely self-reported: law firms tell the market what their revenues, profits and partner counts are, and invite us to do the math. But hardly anyone steps up and questions whether the base figures themselves are accurate. Consider the brouhaha created in 2011, when some of the law firm profit numbers listed high in the AmLaw rankings varied from those in a report by the firms’ lender of choice, Citi Private Bank — and not surprisingly, the self-reported firm numbers were noticeably more robust than the bank’s figures.

Now, you might still be willing to overlook all these legitimate objections to PPP if you were convinced of one thing: that the annual profit earned by partners is a proper measure of the success of a firm, and that we should simply improve our analytics until we can measure that profit accurately. That belief rests on another basic assumption: that the ultimate and best purpose of a law firm is to generate and maximize profits for its partners. That brings me to the second, and I think even more incisive set of objections: this belief is false.

Law firm partners are the equity shareholders in their firm (and outside of England, Wales and Australia, only lawyers may be such shareholders). “Shareholder value,” in turn, has been the fundamental strategic goal of the corporate world for the last few decades: merge, diversify, fire, close, acquire, rebrand, lay off — do whatever it takes to maximize shareholder profits. This is a corporate philosophy whose time has passed. Justin Fox writes in the most recent issue of The Atlantic, in an article titled “How Shareholders Are Ruining American Business”:

This notion that shareholder interests should reign supreme did not always so deeply infuse American business. It became widely accepted only in the 1990s, and since 2000 it has come under increasing fire from business and legal scholars, and from a few others who ought to know (former General Electric CEO Jack Welch declared in 2009, “Shareholder value is the dumbest idea in the world”). But in practice … we seem utterly stuck on the idea that serving shareholders better will make companies work better. It’s so simple and intuitive. Simple, intuitive, and most probably wrong—not just for banks but for all corporations. …

[The] heyday [of shareholder value] ended with the stock-market collapse that began in 2000. The popping of the tech-stock bubble demolished the notion that stock prices are reliable gauges of corporate value. And as the economy languished, the shareholder-driven U.S. corporate model ceased to look so obviously superior to its Asian and continental-European rivals. The intellectual assault on shareholder value began, and has been gaining strength ever since. …

Multiple studies of corporations that stay successful over time—most famously the meticulously researched books of the Stanford-professor-turned-freelance-business-guru Jim Collins, such as Good to Great—have found that they tend to be driven by goals and principles other than shareholder returns. … In a complex world, you can’t know which actions will maximize returns to shareholders 15 or 20 years hence. What’s more, most shareholders don’t hold on to any stock for long, so focusing on their concerns fosters a counterproductive preoccupation with short-term stock-price swings. And it can be awfully hard to motivate employees or entice customers with the motto “We maximize shareholder value.”

You can see the many parallels between American corporations and law firms in this regard:

  • PPP as an overriding goal also rose to prominence in the late 1980s and 1990s (a period often associated with the start of a decline in professionalism);
  • Shareholder profit does not predict the health of an enterprise (Dewey & LeBoeuf was profitable until the day it crashed);
  • Rampant partner mobility and lateral hiring frenzies parallel shareholders’ increasingly short-term possession of company stock;
  • “Annual partner draws” parallel “annual shareholder earnings” and drive short-range, revenue-now behaviours;
  • Staff members and associates don’t share in the profits, so how they can be expected to support a strategy in which they have no personal claim?
  • Truly great firms are driven by goals and principles (how often have we said to ourselves, “Law used to be a respected calling, firms used to be places with a higher sense of purpose,” etc.?).

I don’t think it’s a huge stretch to say that when PPP became law firms’ fundamental measure of success, lawyers at these firms began to lose their compass, and the firms themselves began to lose their way. [do_widget id=”text-8″ title=false]

So it’s not just that PPP measures only one simplistic thing — it measures the wrong thing. There is no correlation, let alone causation, to be found between profits earned by equity partners on average and a host of other positive features that could equally reflect firm success:

  • Firm-wide profitability
  • Lawyer and staff retention rates
  • Lawyer and staff morale
  • Client loyalty
  • Client satisfaction
  • Community impact
  • Pro bono commitment
  • Prestige

That last one really goes to the heart of the issue: more lawyers now reflexively accord more prestige to a firm depending on its AmLaw ranking. But do you really think clients believe that a firm’s profitability — its ability to maximize revenue from these same clients — helps determine its prestige and desirability? And do you think clients applaud lawyers’ desire to make the maintenance and growth of that profitability their primary measure of success?

Law firms are, or should be, far more than profit machines for their equity partners, just as companies should be more than just profit machines for their shareholders. But even if you don’t believe the latter — if you think that capitalism is so base that corporations really should be nothing more than money engines — aren’t lawyers and law firms supposed to be different, and better? Isn’t this the argument we always hear against non-lawyer ownership of law firms: that “law is a profession,” that the greedy desires of businesspeople and shareholders would drive us to ruin if they were admitted to the ownership circle? If we’re so superior to mere corporate types, let’s prove it — by adopting a measure of law firm success that has more in common with today’s globalized economy than with Dickensian England.

I admire The American Lawyer and I have friends who work there (hopefully after today, too). But it’s time we called on AmLaw to abandon PPP as a measure of law firm success. The AmLaw rankings are incredibly influential within the US legal profession and have spawned imitators worldwide, and it makes sense that an independent assessment of law firms exists to guide both clients and lawyers in identifying “the best” firms. But we are in desperate need of improved criteria for determining “the best.” PPP is shallow, simplistic, and misleading; it encourages antisocial and unprofessional behaviour; and it’s out of step with modern enterprise philosophy. We can do better; we need to do better.

I have no doubt that constructing a more complex, sophisticated measurement of success among large law firms would be a difficult task — but that’s no reason not to try. If The American Lawyer again takes the lead, as it did years ago when it first developed the AmLaw 100, it could have a wide and (I believe) massively positive impact on how lawyers view themselves and how they run their law firms. If it chooses not to do so, it will only be a matter of time before someone else comes up with a rival ranking with different and better criteria that will capture the profession’s imagination.

Whether we like it or not, PPP is in its dying days. The sooner we put it out of its misery, the sooner we can start to bring new life to our law firms.

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.   

Your future legal survival kit: Another Law21 survey

I have a new survey for you to complete, similar to my previous questionnaire about building your own law firm — except that today’s quiz looks like a lot more fun. But first, some background as to what prompted this one.

Five years ago this month, I posted a short entry here at Law21 called “Core competence: 6 new skills now required of lawyers.” I identified six attributes that the legal profession has traditionally valued, the ones we’ve always assumed are the most important assets for a lawyer to possess (e.g., analytical ability, logical reasoning, persuasiveness). I then suggested that these skills, while still necessary, were no longer sufficient — that tomorrow’s lawyers will require new abilities such as financial literacy, emotional intelligence, and project management. I thought it was an interesting post, but to be honest, not much more than that.

In fact, however, “Core competence” turned out to be far and away the most popular post I’ve ever written on this site. It’s among the most frequently accessed posts every day of the year, and often this five-year-old article is the top daily entry.

The popularity of that post just underlines for me the tremendous demand, both from within the legal profession and among those who wish to join it, for information about what kind of abilities — practical, functional, and performance-based — you need to be a successful lawyer. This is a question that ought to be occupying virtually everyone with an interest in the practice of law over the next decade:

  • Current or potential law students (there are still a few out there) who want to know what attributes they’ll need to compete in a tough market with a heavy debt load;
  • Law school administrators who want to know what kinds of pragmatic, professional courses they should be offering to attract those students and impress employers;
  • Managing partners and law firm hiring directors who want to know what aptitudes should inform their recruitment, training and retention efforts;
  • Clients who want to know what characteristics they should require of both their outside counsel suppliers and their own growing ranks of inside lawyers; and
  • CLE directors who want to know what training and educational opportunities they should offer in order to maximize market interest and curriculum effectiveness.

Over the course of the last five years, however, I’ve found my own thinking on this subject has evolved. I’m still interested in skills — the ability to effectively execute important tasks will always be highly coveted — but a focus on skill that underplays other characteristics will result in a work force too heavily reliant upon technical abilities and shortchanged on the kind of dynamic talents that separate the merely good from the truly great. Not only that, but over-emphasizing skill ignores the reality that some people are simply born with innate talents that give them an advantage over others. Charisma, for example, is a talent, a remarkably effective one (especially for trial lawyers and rainmakers), but like speed, it simply can’t be taught.

So that got me thinking: if we were to expand our repertoire of potential abilities and advantages for lawyers — if we thought more broadly about what lawyers require to be successful in the coming years — then we could start to assemble a more diverse and well-rounded inventory of market-centred attributes for 21st-century lawyers. And that leads me to my new survey.

This survey, like my new book Evolutionary Road, was co-created with my friends at Attorney At Work, and it touches on the same basic issue: the future development of the legal marketplace (if you haven’t checked out the book yet, please click through to learn more). Evolutionary Road posits five stages in the transformation of the legal market and recommends ways in which firms can adapt.

But what about individual lawyers? What can they do to adjust their own inventories of market offerings? The answer to that question depends on another one: what precise individual skills, talents and resources will maximize lawyers’ odds of success in the coming years? I have my own answers to that question, but I’d like to find out yours first. So I’ve put together a survey that tries to elicit your responses, and in an innovative way.

Have you ever taken one of those survival quizzes, like Survival At Sea or The Sub-Arctic Plane Crash Survival Test? The idea is that an accident has stranded you in a harsh and desolate location, and you must choose, from among a small array of remaining supplies, the items most important to your survival. In some tests, you can only take a limited number of items with you; in others, you can take them all, but you must prioritize them in order of importance. These quizzes test, to a certain extent, your knowledge of basic wilderness survival techniques — but also, and more importantly, your ability to think creatively and cleverly about how you can use the tools and resources available to you.

Using these tests as inspiration, allow me to present: Your Future Law Survival Kit Quiz:

Evolutionary_Road_takeTheSurvey (1)

You’re stranded in a future legal market, vast and unfamiliar, and you need to launch a new legal career. Luckily, you get to start off with several skills and talents — but it’s a limited supply, and you’ll need to choose carefully. Which ones will help you most? Below you’ll find 15 resources that seem like they’d be useful, including innate abilities and valuable skills. You have 100 points to assign among these resources, according to how important you think they’ll be.

And here are the 15 attributes (listed here in alphabetical order, but randomized in the quiz):

  • Connections: Strong and productive relationships with clients in your chosen field.
  • EQ: Your emotional intelligence fosters great relationships, especially with clients.
  • Famous Brand: Start off your new career widely known and respected in your field.
  • Financial Facility: You have a business background and a great head for figures.
  • Innovation: A talent for and enthusiasm about improving upon current practices.
  • Legal Knowledge: Good old-fashioned legal know-how, the black-letter kind.
  • Moral Fibre: You’re renowned for strength of character and high levels of integrity.
  • Nice Niche: Start your career with a strong grasp of a narrow but very promising field.
  • Pricing Strategies: You know how to price your work effectively and profitably.
  • Process Mastery: A knack for developing systems, procedures and efficiencies.
  • Recruiting Prowess: You easily attract talented colleagues and collaborators.
  • Risk Acceptance: You’re not averse to risk; you’re confident about taking chances.
  • Solutions R Us: A gift for solving seemingly intractable challenges, legal and non.
  • Techno-Wizardry: Facility with programming, web design, apps and all things tech.
  • War Chest: A bank balance to help finance many (but not all) of your future needs.

Which of these would you choose to launch a legal career in the future legal market described in Evolutionary Road? How much weight would you give the attributes you choose? As with the previous test, you’re given 100 points, which you must distribute throughout the list according to which features you think will prove most important; you will almost certainly have to leave some out, and you will have to award some choices more points than others.

Here’s the link to the survey — it’s open as of today, July 22 , and will stay open until August 12 (or until I have enough responses to draw some conclusions). Please take the survey — Note: print out your choices before pressing “Done,” so that you retain a copy — and forward it to your friends and colleagues. And then check back here next month to see how your answers compared with your fellow readers — and with mine.

Available now! My first two published books: Content Marketing and Publishing Strategies for Law Firms (co-authored with Steve Matthews, published by The Ark Group) and Evolutionary Road (e-book published by Attorney At Work). Click the links to learn more and order your copies today.

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.  

Transforming Bar associations

So I’ve been busy writing again, this time about what the changing legal marketplace is doing to two longstanding members of that market: law librarians (for Thomson Reuters’ Legal Solutions column) and bar associations (for the ABA’s Bar Leader e-magazine). The latter article, co-authored with the great Fred Ury, prompted a post by Sam Glover at Lawyerist: How Can Bar Associations Stay Relevant? Sam was skeptical about our prescriptions for bar associations and suggested one of his own:

In addition to offering free forms and CLE, I think what would get me most interested in my bar association would be a return to basics: building relationships among members. This could be especially valuable for solos. I get the best forms from my colleagues, but I wish I had an easier time finding mentors when I moved into a completely new practice area. I like to learn about technology and marketing and stuff, but I always find that the people doing the most interesting things in their law practices are in the audience at CLEs, not on stage. And, perhaps most crucially, I can get CLE credit just about anywhere, but I don’t have a local softball team to join.

I left a comment on Sam’s post, which I’d like to expand upon here, since this whole question is drawing a lot of attention — and rightly so. Bar associations are facing some existential challenges right now, and I wouldn’t want to see them just disappear beneath the waves without trying to extend a hand.

Many bar associations find, when they do a sober inventory of their true assets, that they have fewer than they supposed, especially in terms of the relevance and distinctiveness of their activities and services. Almost everything they offer to lawyers can be replicated in some way by other service providers, most of which have neither the overhead costs nor the organizational slow-footedness that hamstring associations. Like law firms, these are legacy organizations with legacy costs and legacy thinking, and they find adjustment to be a very difficult process.

But what most bar associations can still boast, the one legacy holdover that’s helpful to them, is their reputation: the brand recognition and authority they can still muster among lawyers. These assets have been developed over the course of many years of service, albeit service to a very different profession in a very different market than this one. But the respect survives as brand awareness, legitimacy and trust — much as it does for many historic law firms whose name partners died a long time ago.

Legitimacy is not a standalone asset, of course: what matters is what you do with it. And if bar associations are going to survive, they need to apply that legitimacy by providing lawyers with services that have one thing in common: they are distinctive. Bar services have to differentiate themselves from similar services available elsewhere. Here are a few examples that expand upon the points Fred and I made in our article:

Forms: It’s not enough simply to stick the association’s logo on a boilerplate legal document and suppose that that will carry the day. The document has to be distinctively different and better: assembled by leading practitioners in a given subject area, subject to scrutiny by blue-ribbon oversight committees of judges and lawyers, approved by the local professional insurance provider (ideally, a bar-affiliated one). Create forms and documents like these, demonstrably and qualitatively better than what other providers sell — and then provide them for free solely to members. That has value to the lawyer and will help set the association apart.

CLE: Bar association CLEs often are no different than what private providers offer, while association annual meetings have tended to become exercises in both self-absorption and self-congratulation. But what Fred and I proposed is distinctive CLE: extremely practical and law-business-oriented programs would stand out all on their own (most CLE offerings are retrograde black-letter law-based), while (as I wrote two years ago) fresh new formats would invigorate attendees: un-conferences, speed-roundtables, micro-panel discussions for small, specialized groups, and so forth.

Relationships: Sam emphasizes this, and it’s true that building relationships among lawyers has real value. But most lawyers now have multiple channels for facilitating relationships (both old and new), and importantly, they don’t need an association to help maintain them. A good route forward here would be to affiliate relationship-building with the distinctive CLEs mentioned above: get lawyers out of their seats and walking around, talking to other lawyers about practice and business issues. Associations could also host “private study groups” that give lawyers the opportunity to interact, come to rely on each other, and build distinctive networks available nowhere else.

Advocacy: Again, as I’ve written before, “lobbying” doesn’t exactly have a inspirational ring to it, and issues activism can be highly divisive and detrimental to member retention. So I think lawyer associations should transform themselves into lawyers’ marketplace evangelists. They should adopt as their mission a sustained campaign to trumpet the unique advantages of choosing lawyers over the many other options spreading throughout the legal services market. Advocate to clients why a lawyer is better than the “non-lawyer” alternative. Nobody else is carrying out that kind of lobbying, and bar associations are perfectly placed to do so.

Associations should recognize that the residual (and in fairness, often continuing) level of recognition, trust and respect they command among members of the profession is their most outstanding asset — but it’s an asset with which to start the reinvention process, not end it. Maintain that recognition and respect, seek always to improve them, and most importantly, find ways to leverage them. But along with the process of identifying that value comes a recognition and acceptance of some tough choices about who you are as an association and what you stand for.

A bar association that tried taking the steps I outlined above would immediately run into stiff opposition, both internally and externally, from people who resist change and prefer the longstanding ways of doing things. It’s my belief that sticking with traditional services delivered in traditional ways inevitably will result in gradual, relentless attrition for the association and ultimately, a smaller organization. But making the tough choices and radical changes described above will deliver much the same result, albeit far more quickly. Either way, associations are going to experience member loss. So the questions become: (1) If you’re going to lose members anyway, don’t you want to lose them in service of being the organization you want to be? And (2): As between these two paths forward, which do you think holds more promise for renewal and revival down the road?

I addressed the National Association of Bar Executives (NABE) a few months back, and one of my messages to them was this: you need to get used to the idea of being smaller. Associations (like many other entities in the legal market, such as law schools and legal publishers) have long been accustomed to equating size with success: if you have lots of members and are always adding more, then you’re winning. I suggested to these bar leaders that they abandon the idea of growth for growth’s sake and start aiming to become focused, distinctive groups that, yes, might be smaller, but that have very high levels of satisfaction and loyalty, because they do things differently and they do them extremely well.

The legal market now and in the future is too fractured and specialized for an all-purpose, general-interest association to adequately and comprehensively serve — especially if it looks and feels like every other service provider out there. Decide what you want to be, and who you want to be for: that’s good advice, as far as I’m concerned, for both bar associations and the lawyers they hope will join them.

Available now! My first two published books: Evolutionary Road (e-book published by Attorney At Work) and Content Marketing and Publishing Strategies for Law Firms (co-authored with Steve Matthews, published by The Ark Group). Click the links to learn more and order your copies today.

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.