This article originally appeared in the November 2018 issue of ABA Law Practice Today. You can read this article, and many more law practice management articles at: ABA Law Practice Today
Law firms need leadership, and not everyone at the firm is going to contribute. We know that. But every successful law firm needs inspiring leadership to be the voice of the vision and guide others to move forward into an uncertain future.
Understanding the Difference Between Leaders and Managers
People are often confused about the difference between leaders and managers. This is understandable, as there can be overlap in responsibilities where one or more people at a law firm have multiple responsibilities. However, just because you are in management doesn’t make you a leader.
Steven Covey aptly described the difference: “The leader is the one who climbs the tallest tree, surveys the entire situation, and yells, ‘Wrong jungle!’ … Busy, efficient producers and managers often respond … ‘Shut up! We’re making progress!’”
A successful law firm needs both leadership and management. Here is a quick breakdown:
- Reporting and finance
- Infrastructure and technology
- Business development
- Hiring and retention
- Professional development
- Risk and compliance
- Case management
- Create and shape the vision
- Socialize the vision throughout the organization and get buy-in
- Identify and anticipate trends in their industry
- Identify and anticipate changes in the political and economic environment
- Understand their clients’ journey
- Validate all of the above back into the vision and course-correct when appropriate
In short, managers direct their staff to make the horse buggy whips, the fastest, cheapest, or highest quality, as dictated by their pricing model. It is up to leaders to determine when it’s a good time to stop making whips for horse buggies and transition into something different.
A Law Firm is a Business
Equity partners in law firms need to recognize that they are business owners. As business owners, their primary measure of success is client satisfaction that translates into a sustainable, profitable and ethical business. Too often, lawyers start with the premise that they are in a profession that is capable of generating fees, so, therefore, they must have a business. The perspective of law firm leaders must distinguish the legal services capabilities from the business itself. A law firm is more than just putting a wrapper around attorneys that bill for legal services—a law firm is a business that has identified a need in the market and is able to solve problems for their clients through the delivery of legal services.
To recall the buggy whip analog, leaders must look outwardly to read the tea leaves of where the market is going. When corporations began to push back on the cost of legal services by dividing up their legal work across several law firms to get them to compete on price, the market spoke. Big law firms that previously had little economic incentive to push for efficiency in a billable hour model were now forced to reckon with increased competition and efficiency. When clients pushed for flat-fee and price-certain fees, law firm leaders had to respond with a change to their business model to compete for client business.
Benchmarking Other Businesses
To look for changes in the marketplace, leaders often look to their peers to see what they are doing. Benchmarking peers is valuable in assessing your own position relative to your market, but it doesn’t necessarily indicate when or how the market is going to change. You may be comforted by being positioned safely in the middle of the flock, but it does not position you to be an innovator or a first-mover. When change happens, you will be responding from a reactionary posture.
Leaders who look to other industries to evaluate macro-trends would be well served. Looking for analogs in other industries and anticipating how those innovations are changing customers buying behaviors and expectations for service delivery will be leading from a pro-active posture. Leaders also look inward at their own clients and have candid conversations about where their firm, and the industry in general, is falling short of changing expectations.
Clients as the Ultimate Validation of a Business
Viewing the client journey as a valid and valued perspective can reveal a much different picture of your law firm. Think about the typical complaints that attorneys make about their clients: they call too often; they don’t understand the complexities of the statutes; they have no clue about how long litigation takes; they complain about the cost, and they don’t appreciate how busy you are with other clients.
Leaders in today’s law firms understand that these client views are not interruptions or inconveniences to their business—they are the business. As soon as clients find law firms that understand the client journey and value the expectations in a changing service model, one law firm will have lost a client and another firm will have gained one.
Developing Leadership in a Law Firm
Hungry, motivated, and productive attorneys in a productivity model law firm will most likely follow the cheese. Your “A” players will be rewarded for their productivity on casework and revenue generation. Generally, the next level “ask” of the attorney is to make firm contributions to new client acquisition in the form of business development. Here is where firms must decide between the carrot and the stick: 1) “It’s easy money if you bring in the clients” or 2) “It’s required if you want to be successful with us.” While client acquisition benefits the entire firm, it is still closely related to the core delivery of legal services for that respective practice area.
The next level “ask” often is for the attorney to help make the firm better for others. This can come in the form of general marketing, speaking engagements, volunteering with legal or community associations, mentoring, recruiting, internal training, strategic planning, special projects, process improvement, automation, management meetings, and even social media promotions for the firm. One measure of a firm’s commitment to building leadership is the extent to which those services are recognized and compensated.
Greed is Good
At smaller firms, attorneys out of necessity must balance client work with firm-building. Client work generally takes the higher priority to the detriment of firm-building. At larger firms, professionals with firm-building expertise do not have to be attorneys with divided responsibilities for both, however, management needs to find ways to bring in attorneys with case-load experience as valuable stakeholders and tap into their leadership insights and capabilities.
It is disingenuous to simultaneously ask your team to meet and exceed revenue goals while not properly compensating them for participation in firm leadership. Arguably, firm leadership could be one of the highest-paid activities at a law firm. Its contributions have the greatest potential impact on whether a law firm dies, survives or thrives. If the very existence of a law firm depends on executive skills to read the market and adapt for the future, the compensation of leadership should be commensurate with market-based compensation of similar revenue-producing and risk-based businesses in other industries.
Leadership Succession Planning
Another measure of leadership in a law firm is the quality and commitment to succession planning. Often a much-talked-about, back-burner issue, succession planning also could be viewed as an indicator of the current quality of leadership. The activity of succession planning in and of itself necessarily shifts the conversation from individual-based to role-based. The professional development of internal future leaders is an act of firm growth as well as an ongoing selection process for future leaders. High-performing leaders in law firms can mask the lack of preparedness, because the impact of a key departure may be difficult to measure until it has already happened. One proactive measure in this space is the degree to which strategic decisions get made in isolation. If firm-building leadership activities are highly consolidated, then tactical decision-making may be bottlenecked and could be a red flag for succession planning preparedness.
Summing It All Up
Leadership in law firms today requires a vision that embraces facing challenges at a faster pace than previous generations. Today’s leadership must navigate challenges to the billable-hour model that increase transparency on the measures of quality and cost of legal service delivery. Today’s leadership must adapt to a new generation of lawyers that may have different attitudes about compensation, mobility, teamwork, and authority. Today’s leadership must have a vision that accounts for the irreversible impact of technology on how legal services are valued, managed and delivered. That vision must be forward-looking in dealing with developments in artificial intelligence that are widening the gap between the tech haves and have-nots.
Today’s law firm leaders get to decide how they develop, shape and socialize their vision to attorneys who are working heads-down on cases, as well as their openness for input into the vision, and ultimately, whether to weed out those that are not fully aligned with the firm’s vision. It’s a choice.
So lead, follow or get out of the way.
About the Author
Josh Kalish is a leader at The Noble Law Firm, an employment litigation law firm in North Carolina.