I was recently asked how a law firm management philosophy relates to the strategic planning process. It was a great question, because how we manage a firm (or plan to manage a firm) must either be aligned with firm culture, or set out to consciously adjust firm culture. So how we plan sets the tone for that firm culture.
Most law firms would say that they are run, collaboratively and consensually, by their Partnerships. I found this to be rarely true. The structure for doing so might exist, but in reality, firm decisions are made or guided in very different ways.
In actuality, I believe there are three ways to manage a firm.
- The Dictatorship: This speaks to a culture where one or more individuals at the top of the food chain make or strongly guide all decisions according to their vision of how the firm should run and where it should be heading. They may be founding Partners of the firm, so not without their special skills and knowledge of running a business. They may be well-respected in the legal and business communities, and looked up to within their firm. I call these the “sages” of the legal business. They are worth listening to.
Alternatively, there may be one or more members of the Partnership who are entirely self-focussed, who feel and act quite differently from the rest, and who force decisions in the firm with their obstinance, their bluster, and their negativity. At best, Partnerships tend to bend a bit to their will. At worst, Partnerships capitulate to these trouble-makers because they don’t want a fight. These divisive individuals are given more power than they deserve – allowing them to dictate firm actions even if they don’t wear an official leadership hat.
Everyone can see the downside of the de facto dictator, but many might see great value in a firm being guided by the sages. I disagree. Our industry is faced with unprecedented issues: a global pandemic and how that will forever change the playing field; the most challenging talent market in the history of law firms to date; the gradual transfer of law firms to generations who have very different values than the ones before them (many of whom don’t necessarily want to become a Partner, and don’t want linear career trajectories) and what that might mean to our future structures, etc. These require new ways of thinking. Some of the traditionally successful ways of operating might no longer be relevant. If we attempt to rigidly manage law firms the way they have been in the past, those firms might not survive. I don’t believe we should ignore the sages; but rather, include their wisdom and advice into a larger mix of data.
- The DAO Method: This is on the other end of the spectrum. I’ve borrowed this term from the blockchain/cryptocurrency world. A DAO is a Decentralized Autonomous Organization. It is not controlled by a higher power (like a government, a company or a board of directors). Instead, decisions occur through a collective of individual choices and actions. In crypto land, DAO’s are used to assist with the creation of new levels of privacy and security. But if we extend this concept to law firm management, it explains how law firms have been actually run for years.
Most law firms believe they have a hierarchy of management, even if the top is simply the list of Partners. But few firms have a formal, consistent strategic plan. Few create and implement on formal and documented annual business goals. Most firms are not guided by strategy: instead, they make decisions as they arise, too often running the firm by exception to any rules or guidelines that might exist. Their outcome is the collective result of hundreds of little actions determined in the moment, often without thought to (and so even working against) the longer-term desired outcome.
In fairness, this has been a relatively successful business strategy in the past because law firms were in a better position. Clients had little power or knowledge about the legal process. There was more legal work than there were law firms to deal with it. Everyone wanted to be a lawyer or a legal assistant, and people stayed with their firms for decades, in some instances. But that world no longer exists. Today, firms must be strategic and calculating in their self management. Thanks to the Internet, clients are far savvier about legal process and costs. Talent is far less loyal. Non-lawyers have been infiltrating the legal realm for years, eroding the work that was traditionally done by lawyers. Law firms can’t afford to run the DAO method anymore.
- Collaborative Leadership: This is my favoured approach. It starts with an opportunity for all lawyers in the firm to speak to their goals, needs and vision for the firm. It checks in on personal values and circumstances. It creates a vision board of sorts for the firm (for those who are familiar with the concept) that depicts not what law firms should do to successfully move forward; but what THIS law firm should do to successfully move forward. It ensures buy-in from everyone involved because they all know that their opinions helped to create the outcome. And this is more powerful than a DAO approach which makes quick decisions in the moment based on limited data and no understanding of the ramifications of any action. Instead, it builds a business case for how the individuals in that firm, with their skills and their planned future, can best come together to recreate and support the strongest firm possible.
That’s the collaboration part. The leadership part is the assembly of and delegation to a group of individuals to oversee the implementation of that vision. The leadership positions needed depend on the culture of each firm. Those positions could include a Managing Partner, an Executive Committee, Department leaders or portfolio owners (i.e., Finance, Marketing, HR, IT, etc.); Practice Group Leaders, Client Team Leaders, various committees, etc. It may also include senior support staff (Directors of Managers of the various functional departments in the firm). All of these or any combination can be selected, according to whatever will work best with each individual firm. But whether the leadership structure is decentralized over a wider range of individuals or an organization decides to remain quite flat, with only a few leaders (like an Executive Committee), trust is maintained through an accountability process. Plans are created and document by each appropriate element within the firm (department, practice groups, etc.) and regular reports are produced to demonstrate committed pursuit of the firm’s plans. It is critical – especially as organizations move further away from Partner day-to-day management and decision-making, that Partners none the less keep well informed of the firm’s management activities, and participate in major decision making as appropriate.
The key messages here are:
- Be honest about how your firm is currently being managed;
- Conduct a strong strategic planning process to determine where you want the firm to go;
- Put into place appropriate leaders and managers to ensure you get there;
- Put into place an accountability process to keep everyone focussed and motivated.
Heather Gray-Grant is a business strategist, marketing expert and executive coach for law firms, lawyers and administrators. She can be reached at email@example.com