Authenticity and lawyer recruitment

The editors at LegalWeek blogged recently about the results of the Sunday Times“Best Company to Work For” survey, which, remarkably enough, saw eleven law firms crack the Top 100. I think this probably signals not so much a renaissance in law firm working conditions, so much as that many UK law firms are getting pretty good at using workplace reputation rankings for their own ends. It’s a phenomenon not limited to the eastern side of the Atlantic.

The thing about “Best Employer” lists, as LegalWeek‘s editors point out, is that law firms consider them enormously important recruiting tools for new lawyers and lateral hires. A solid ranking adds lustre to a firm’s marketplace brand and reinforces the strength of its hiring pitch, especially to new lawyers who consider (accurately) that law firms are all pretty much the same. Anything that can help a firm stand out from the faceless crowd, especially on “soft” criteria like flexibility, mentorship and socializing, has a lot of value.

The trouble with third-party marketing and recruiting tools like this, of course, is that they’re destined to be gamed. Savvy firms figure out how the system works and take steps to ensure they do well. Some law firm associates know this first-hand, because they receive a memo “encouraging” them to fill out the “Best Employers” survey and help improve the firm’s standings. It strikes me as odd that firms expect these rankings to impress potential lawyer hires when their own lawyers have been directly involved in what amounts to a manipulation of the results.

In fact, it’s this “gaming” element of such rankings that raise what I think is going to become a problematic element of law firms’ recruiting efforts down the road. Young lawyer recruits, when deciding which firm to work for, are going to start zeroing in very clearly on the authenticity of firms’ marketing and recruitment efforts. This is a generation weaned on word-of-mouth recommendations, and they give a lot of weight to a friend’s or reliable acquaintance’s testimony that something is worthwhile or not. Failing those kinds of first-hand recommendations, they will tend to go, not to press releases, newspapers or magazines, but to collaborative knowledge portals to test the judgment of the crowd. This is where new lawyers are heading now, and law firms need to go with them. Continue Reading

Conflicts for “sophisticated clients”

When Clifford Chance General Counsel Chris Perrin talks about conflicts of interest, lawyers pay attention. The man whom the Financial Times calls the “czar” of conflicts has been working on the subject for nearly a decade, most recently as chair of the City of London Law Society’s Committee on Professional Rules and Regulation. It’s in that capacity that he has now called for a “significant widening of client conflict rules,” according to a story in today’s edition of The Lawyer:

Currently the rules permit law firms to act on conflicting instructions only where the clients share a common interest and consent or where two clients are competing for the same asset, such as in an auction sale. “In addition to these two exceptions,” proposed Perrin, “there should be a wider exception to be used by sophisticated clients, which would enable them to waive conflict in any circumstances.”

Perrin argued that if two sophisticated clients want to get a deal done and both have historically used the same firm, it is impeding their desire to get the transaction done to prevent them from using that firm. And if both parties are happy that a firm will look after both their interests, he said, there is no reason why it should not. The proposed definition of ‘sophisticated clients’ would include clients, which have received independent legal advice or which have in-house legal departments and the exception would not apply in litigation matters.

This rang a bell with me, and sent me off into National‘s archives to find an article published in the March/April 2004 issue (not online, unfortunately) about a proposed change to the Law Society of British Columbia’s professional conduct handbook. Proposed Rule 6.3.1 would have enabled lawyers to act against current “sophisticated” clients without their consent if (a) the matters are substantially unrelated and (b) the lawyer has no confidential information that might reasonably affect the other representation. (The law society’s contemporary bulletin on the subject provides more information.) Continue Reading

Takeaways from TECHSHOW

The kid is back from the candy store known as ABA TECHSHOW. This was my first trip in two years, and probably the best of the shows I’ve attended so far. I met up with old friends, made some new ones, and managed to avoid most of the St. Patrick’s Day revellers at the Chicago Hilton, so altogether it was a great success.

I loaded up on numerous sessions and gathered a ton of material that will be making its way into National and onto CBA PracticeLink in the coming weeks and months. But I thought you might be interested in a few highlights of the seminars I attended and what I took away from them. (Note that the “takeaway” isn’t necessarily the presenters’ position, but rather is my impression of where things are and where they’re headed in the future.)

* Privacy on the Internet, a keynote by Marc Rotenberg, Executive Director of the Electronic Privacy Information Center. Marc’s address was both entertaining (he opened with a discussion of the Eliot Spitzer case) and sobering (the amount of data about us that both government and the private sector are collecting is astounding).

Takeaway: Google is amassing the greatest collection of data in history and the tools to do some disturbing things with it, and all we have to reassure us is their word that they won’t misuse it. But we’re at the stage now where we need to be asking exactly who owns “information” of various kinds. For example, we worry that Google can track and keep everything we do online, including things we searched for and found. But much of this data would never have existed in the first place if not for Google: information that we consider our private business exists only because we voluntarily use Google’s services. Can we rightly lay claim to it? Isn’t it the consideration we chose to render Google in exchange for free search? As both privacy and anonymity become harder to maintain, we need to think a whole lot more about this. Continue Reading

White-water change management

If you help make the decisions at a large law firm anywhere in the world, I assume you’ve been keeping tabs on the developing impact of the UK’s Legal Services Act. There’s been talk about the fallout from the Clementi Report for quite awhile now, especially regarding share offerings by law firms. Seminars are coming up and commentaries have been published; now, we might be about to see a practical application of all the talk.

A Legal Week story published late last week contains this striking opening paragraph: “Lyceum Capital has become the first investment house to openly target legal services, as the private equity firm moves to position itself ahead of sweeping deregulation of the U.K. profession.” Lyceum is not fooling around: the investment house has set up an advisory panel that includes, among others, Richard Susskind and Tony Williams. Any project with those two people on board is to be taken seriously. Big, creatively destructive change is coming, and fast.

This leads me to think that a lot of firms are not taking the ideal approach to change management. There’s a tendency, in any change initiative, to imagine that your organization is fixed, your environment is fixed, and all you’re doing is moving your organization from A to B — shifting the furniture, basically. This overlooks the reality that (a) every organization operates in (and is affected by) multiple external environments simultaneously, and (b) the organization itself is changing every day, whether its members know it or like it.

A better way to approach change management might be to envision your environment as a wild river, the kind you go white-water rafting on: fast, unpredictable, dangerous in parts, requiring constant course corrections. Your job is to navigate that river by guiding your craft along it as best you can — while understanding that the shape of your craft, the people handling the paddles, and your overall water-worthiness are constantly in flux, often in ways that are beyond your control.

The legal marketplace has never been a fixed room full of furniture, but for many years it was a pretty sedate stream. It’s been a rougher ride than that for quite a few years now, but I’m here to tell you: there are white, foaming rapids ahead, maybe steeper than we’ve ever seen, and a lot of boats aren’t going to make it. Those that do will be focused on riding the waves, staying alert to the dangers, keeping one eye on the far shore, and most of all, understanding one key thing: you’re not in full control. The river has more to say about your destination than you do.

Successful change management in this environment requires both a commitment to do whatever it takes to survive coupled with an appreciation of the modest influence you can exert over the end result. As we enter a time of true upheaval in the legal profession, place your highest priority on alertness, adaptability, acceptance of powerful forces, and a focused, unified effort on the goal. Give your full attention to what you can control, keep a respectful eye on what you can’t, and make sure everyone understands and accepts the difference between the two.

Moneyball, women and law

Google my name and you’ll find I’ve written a few things about baseball, mostly during my time as a co-founder of and contributor to Batter’s Box, a top-notch Canadian baseball blog. As it happens, one of my favourite baseball books (outside of Thomas Boswell’s and Bill James’s works) isn’t really, I don’t think, about the game at all. Moneyball, a Michael Lewis best-seller about the innovative team-building strategy of the Oakland A’s, is, to my mind, a business book that happens to be about baseball.

If you’ve read Moneyball, you might agree with me that its fundamental lesson is the importance of identifying undervalued assets in a marketplace and stocking up on them before the competition figures out what you’re doing. The A’s front-office combo of Billy Beane and Paul DePodesta figured out that players who reached base a lot contributed as much as or more to victories than did players with more dramatic talents (e.g., stealing bases), yet commanded much lower salaries.

For a team with one of the lowest payrolls in the game, it was a no-brainer for Oakland to pursue the high-value, low-regard personnel, even in the face of derision from richer teams who favoured highlight-reel players. And that’s just what they did. In the result, the A’s were one of the winningest teams of the late ’90s, equalling the performance of New York Yankee clubs with five times their payroll.

It wasn’t a perfect story: Beane conceded that his, um, “stuff” didn’t work in the playoffs, and some of the young players most highly touted in the book never fulfilled what the A’s expected of them. But other teams vindicated this strategy by starting to follow his approach, so Beane switched gears — he began targeting top defensive players as his next “market inefficiency” to exploit. Today, the A’s, when healthy, continue to be a perennial contender.

Looking for the law connection? Others have found it before now: the Moneylaw blog is a great example, as is a terrific blog titled Empirical Legal Studies, which challenges conventional wisdom in the law through the careful application of metrics and reason. Ever since I read Moneyball, I’ve been interested in identifying inefficiencies in the legal talent marketplace.

One of the most obvious is women lawyers, especially those in their 30s and 40s, who are driven out of many law firms by relentless billing demands and inflexible workplace cultures. Continue Reading

Lawyer blogs vs. law firm brands

There’s an interesting discussion in the legal blogosphere these days about, well, legal blogs. James Beck and Mark Herrmann at the Drug & Device Law blog wonder why law firms undervalue blogs, and provide four plausible explanations, three of which relate to demonstrable financial benefit for the firm. Ron Friedmann at Strategic Legal Technology furthers the point about the importance of lead generation for law firms, but he also makes what I think is a key point: the benefits of blogging tend to accrue to the individual author rather than the firm. That has a lot of implications for law firm marketing, and more besides.

I actually don’t think a law firm with more than a handful of lawyers really can blog, because blogging is by definition personal and can only really be performed at an individual, not a corporate level. A firm can set up a number of blogs for its lawyers to write, seeking brand power: a fleet of lawyers all writing great blogs on important subjects under the firm’s letterhead. But these blogs will all have different voices, use varying degrees of formality, address matters in more or less depth, publish at different frequencies — each one reflecting the individual behind it. All that these blogs will have in common is the banner and design.

The thing is, lawyers aren’t cans of Coke: a law firm can’t issue a brand promise about what each and every interaction with its lawyers will feel like. The same applies even more so to lawyer blogs: you can’t brand tone and personality, and a great blog invests heavily in both these things. Blogs, by definition, can’t support a law firm brand.

Cookie-cutter law firm blogs that all read and sound the same, or from which each writer’s personality has been sufficiently excised such that only a bland reporting style remains, don’t build audiences because they don’t strike up relationships with readers. Flat, briefing-style articles on new developments are what populate the newsletters that clients read, skim and discard. You can’t make a connection through a bulletin; but you can connect with a real person, and that’s what makes blogs work.

This is where blogs illustrate the real problem for law firm marketing in the 21st century. Continue Reading

If I had two billion dollars

There is persuasive authority for the proposition that if I had a million dollars, I’d buy your love. So what would I be able to buy with two billion dollars? Apparently, a whole lot of wide-eyed attention and breathless commentary from various legal media outlets. That’s pretty much all I’ve seen over the last few days after Latham & Watkins, DLA Piper and Skadden Arps each announced that it had broken the $2 billion revenue barrier in 2007.

Now, if this is the sort of thing you like, then the foregoing links will give you more than enough to pass the weekend, what with the debates over total firm revenue versus profit per partner versus profit per equity partner, each metric relatively able or unable to determine the richest and/or most profitable large law firm in the world. For myself, I’d like to step back here and suggest that the more we obsess over law firms’ enormous revenue or profit figures, the farther away we travel from why we’re in this gig in the first place.

It bears repeating that lawyers, like the laws that enable their businesses, exist for the purposes of clients, not the other way around. I constantly see lawyers get that formula backwards, viewing clients primarily as a means to their own ends rather than as ends in themselves. Our profession is deeply immersed in the concept of clients as sources of work, suppliers of problems, lifelines of status, fonts of revenue — as entities from whom we receive, rather than to whom we give. A lot of lawyers, subconsciously or otherwise, regard clients as holding value only insofar as they provide us with the raw material of lawyering.

Kant could have told you how categorically important it is to treat people as ends in themselves, that striving to enable another’s dignity and happiness is the overriding purpose of human relationships. That, fundamentally, is why law remains an important calling and (done right) an immensely fulfilling vocation. It’s no coincidence that law, medicine and ministry — each centered on alleviating unhappiness and enhancing the human condition — were the first three lines of work to be considered “professions.” If we want to understand what we mean by professionalism, we need to remember where the word came from. Continue Reading

Women, law firms and semantics

I’m reluctant — wisely, I think — to say much about women in the private practice of law. They tell you to “write what you know,” and since I neither work in a law firm nor check off “female” on my census form, I’m doubly unqualified to say much on the subject. But I will send you to read this post by Larry Bodine that links to Working Mother magazine’s list of best law firms for women, as well as Larry’s own list of rainmaking tips for breaking the glass ceiling.

All I really want to say here is how aggravating it is that we’re still even talking about “women in law firms” as a separate subject. It’s disheartening that gender, which has zero relevance to lawyer competence, continues to require its own discussion in law firm operations. The choice of language in this discussion is telling:

  • Many firms talk about the “problem” of women in firms, as if women were the ones causing dissonance, rather than inflexible, hidebound or backward law firm cultures.
  • Many firms talk about “accommodating” women, as if women should appreciate the inconveniences to which the workplace is put in order to adapt to their presence.
  • Many firms refer to women “taking time out from their career” to have children, as if the job is the acceptable full-time pursuit and the lawyer’s decision to have a child is a little break from which the lawyer should soon return.

That efforts are underway to eliminate the difficulties many women face in law firms is a good thing. That we still even need to have the discussion, that we label it as a “women” or “accommodation” issue rather than a “firm culture” issue, and that we use language that frames the law firm as the default setting and lawyers’ priorities and interests as the aberration, is not. The “glass ceiling” will be gone the day when a lawyer’s gender is 100% immaterial to his or her ability to work in, succeed, advance, lead, and enjoy the benefits of a career in, a law firm.

Transforming the practising bar

If you’d like a glimpse of the legal profession of the near-to-mid-future, look to London. Yesterday, the UK’s Bar Standards Board launched a consultation paper concerning the effect on barristers of the new Legal Services Act, which received Royal Assent last October. (The Solicitors Regulation Authority addressed the LSA’s impact earlier.) Here’s LegalWeek and The Lawyer on the announcement.

The BSB’s 50-page consultation document asks for submissions on how the Board should respond to the LSA, specifically regarding Legal Disciplinary Partnerships (different types of lawyers and a minority of non-lawyers practising together) and Alternative Business Structures (firms that offer both legal and non-legal professional services and that could be owned by non-lawyers, from shareholders to supermarkets). LDPs might not seem like a big deal to North American lawyers accustomed to our fused profession, but we should understand that it represents a whole new way of looking at the Bar in England and Wales, and it won’t be an easy road there.

But it’s the ABS regime that has people on this side of the pond talking, because it authorizes not just multi-disciplinary practices, which the Canadian and American bars wrestled with and ultimately rejected over the past decade, but also non-lawyer ownership of legal service provision, which is anathema to the vast majority of lawyers and their regulatory bodies. ABSs aren’t likely to appear in the UK before 2011 — it takes time to set up an entirely new governance structure for an ancient profession — but they will come. And when they do, it’s only a matter of time before they cross the pond.

There’s been a lot written about the future impact of the LSA on North American lawyers — Bruce MacEwen has been on top of this from the beginning — but it seems to me that if any member of the Magic Circle floats shares, merges with an accountancy, or otherwise takes advantage of the ABS options to greatly enhance its capital and strategic reach, then their New York-based competitors are going to want a level playing field on which to compete. And if that kind of regulatory change occurs in one US jurisdiction, dominoes will start falling all over various states and into Canada. In a globalized economy, any country that refuses to allow its lawyers to play by the same business rules as their foreign competitors will relegate those lawyers to a purely local purview. That’s not in anyone’s interests.

This is not happening overnight — probably we’ll see this whole situation play itself out around the middle of the next decade. But it’s not far away, either: by the time today’s first-year law students are into their third year of practice, this will be the reality on the ground. The challenge for law firms is to start thinking now about what kind of business structure makes the most sense for their practices and clients, because their options should expand dramatically in the near future. The challenge for governing bodies is how to prepare themselves and their members for an entirely new way of organizing the practising bar.

Here’s a parting thought from BSB Chair Ruth Evans, announcing the Board’s consultation paper: “We may not see barristers selling their services in the supermarket aisles quite yet, but we can expect changes in the way some organize their affairs and offer their services.” Emphasis added, and how.

Coping with fewer associates

The Ottawa Citizen ran an article over the weekend that caught my eye, thanks in part to this succinct summary of the gigantic demographic challenge facing the North American economy:

Baby boomers are retiring and the number of young adults behind them is on an irreversible slide. Starting in 2011, Canada’s workforce will lose two workers to retirement for every one that enters it. The ratcheting price on youth is a sign of things to come for the rest of the country as an aging population forces provinces to compete for dwindling numbers of young people.

Law firm associates’ salaries are already rising separate and apart from a talent shortage; in time, firms seeking to hire new lawyers are going to find out just what a full-blown seller’s market looks like, and they won’t enjoy it. I can see two long-term trends emerging from this.

First, those organizations and regions in danger of losing talent (i.e., most of them) will continue to look for ways to staunch the flow. Nova Scotia, according to the article, is introducing tax breaks to entice younger Nova Scotians to stay or return. The drawback to that approach is that if you’re trying to compete with Toronto or Calgary (or for that matter, London or Hong Kong) on money, you’re outgunned from the start. It will likely be a stretch just to be in the ballpark of the highest offer, and there’s only so much you can spend to keep up.

Consider instead the lawyer in the Citizen article, who’s returning home to Halifax because it’s a better community for her than Ottawa. Successful lawyer recruitment could in future be less about the firm and more about its environment. Forward-looking law firms could start getting actively involved in their own communities’ efforts to become more attractive to tomorrow’s scarce young worker. They’d join forces with other local organizations and identify potential opportunities and obstacles to young professional recruitment and retention. Continue Reading