“Leadership is the art of setting direction for others and getting them to move in that direction with competence and commitment.” — Elliott Jacques and Stephen Clement

Speaking truth to power: Now is the time for managers to lead and leaders to emerge in law firms of all sizes. Power is spread among individuals in a partnership. In law firms, that power is restricted to attorneys, who were trained to practice law and more often focus on getting results. Strong leadership keeps law firms aligned among highly independent and skeptical thinkers.

Stephen Mayson in Law Firm Strategy wrote, “Those who have difficulty with the concept of organizational capital are usually regarding their own individual performance and contacts as key to the firm’s productivity and competitive success.” The challenge for the managing partner is to keep high-achieving individuals invested and “firm-first.”

Aligning the ecosystem
If a law firm is an ecosystem, as described by Willie Pietersen in Reinventing Strategy, it can only function if its interdependent parts are aligned and work in unison. The supporting elements are measures and rewards, structure and process, culture and people. Alignment empowers people to initiate actions. In a productive climate, the staff feels the flexibility to innovate, a sense of responsibility, clarity of mission and values, and commitment to a common purpose. But alignment, according to Jay W. Lorsch and Thomas J. Tierney in their book Aligning the Stars, cannot exist without effective leadership.

Organizational structures provide stability and continuity and also define relationships between people. Regardless of the model, law firms require dual expertise: professional know-how, the ability to produce legal services; and managerial know-how, the production and distribution of those services. There is a challenge for the administrative manager, or other functioning department heads who are non-attorneys, to establish and assert their power with the attorneys in the firm.

As law firms grew in size, management became aligned with practice groups and committee structures. The managing partner typically appoints practice group chairs and the members of the operations committee. Administrative leadership, at the officer, director or manager level in law firms is accountable for managing the work of others, maintaining a staff, and providing leadership.

Measures and Rewards
As the adage goes, “What gets measured gets done. What gets rewarded gets done repeatedly.” Appropriate measures are both a gauge of progress and a signal that the firm places importance on a particular strategy. Pietersen says you must make “deliberate shifts in your measurement and reward system to reflect the crucial priorities of your new strategy.” The reward of promotion brings added responsibility for managing partners, who usually move into such roles after proving themselves at their client work.

The promotion process itself reflects competencies at both the operational and partnership level: management must recognize capabilities as well as attitudes and values. One emerging strategy is to adjust the compensation model to reward improvement in competency and attitude at both partnership and operational level.

People will only be motivated when their jobs provide opportunities for achievement, recognition, responsibility, growth and advancement. Administrative managers need to know their people well enough to assess what motivates them and to provide the opportunities to attain those motivators. Managing partners need to know the partners and practice area leaders, who need to know their teams well enough to provide similar opportunities for business development at the partner level, and matter responsibility at the associate level. The successful work environment meets these needs and simultaneously accomplishes the work in progress.
In diagnosing problems in the firm environment, both managing partner and executive director have to pay attention to the underlying factors that negatively impact motivation: Is the underlying factor a matter of perception, incentive, or expectation? Is the situation brought about by employee aptitude, the need for training or resources? Analysis requires that all managers are attuned to this level of inquiry before steps are taken to resolve problems in the environment.

Read the entire article at NJEsq online.

Law firms are cash operations. Like many of us in our personal lives, law firms exist month-to-month, or quarter-to-quarter. Live many of us, when times are tough, law firms rely on their credit lines to float the bills.

Just like many of us, law firms do not have a savings account for when times get tough.

For most firms, at the end of the fiscal or calendar year, the cash is added up, the bills are paid, the profits-per-point are assigned, and the profits per equity partner are split. If the numbers are up, capital improvements are considered. If the numbers are down a bit, the new computer system is put off for a year. If the numbers are way off, a new chair is elected. And if the numbers are really, really bad, the firm looks for a merger partner or votes to dissolve.

Today, another firm announced their intent to dissolve. According to their statement, Wolf Block voted to commence “unwinding the firm’s business:”

The decision to unwind was reached in view of a confluence of unfavorable factors: the economic recession, especially in the firm’s core real estate practice; the constriction of credit occasioned by the ongoing banking crisis; and the intended and anticipated departure of significant partners and practices.

I had a partner in my firm recently wonder why there were so many layoffs this month. It was an easy answer for me, as I had personal experience at a prior Big Law: Many law firms pay out their previous year’s compensation after the first quarter of the New Year.

In boom times, this is great. Firms live off credit for the first few months. Partners hold off on their new purchases until the Spring. Revenue comes in. Credit line is paid off. Business as usual.

But in a bust year …

Bruce MacEwen over at Adam Smith, Esq. wrote an interesting piece about how the imperative placed on profits is skewed in respect to the overall role of the equity partner. He defines three distinct roles for the equity partner:

  • Workers/producers, in which role their job is to actually bill hours and perform client work. In this role, their appropriate compensation is what the firm would have to pay a non-equity partner to perform the same work.
  • Managers/administrators, in which role they help run their practice groups or departments, manage staff, mentor associates, participate in firm committees, and so forth. In this role, their appropriate compensation is what the firm would have to pay nonlawyer executives to perform the same work.
  • And last and only last, equity partners, which is to say, owners with a residual claim on the profits of the enterprise after all other expenses and claims have been satisfied–including, if you want to be rigorous about it (and some of us do), paying the first two sums listed above out of operating income.

Yet too many equity partners place all their focus on the third bullet point.

Bruce continues:

But of course, in wonderland, partners view themselves as wearing one and only one hat, namely the last one. This means they view their compensation as coming entirely from their role as equity owners. And given the current realities of law firm organization, finance, and accounting, they are entirely right to see it that way, however economically irrational that might be in the abstract.

Why does this matter? Only because, as we’re about to see, “profits” in law firm land have a special meaning, and that’s why they’re imperative.

If equity partners across BigLaw had been raised from 3L status on to understand, internalize, comprehend, and expect that their compensation would consist of those three different components, the last of which is highly variable, profits would not be as imperative as they are. But that’s not the world we live in.

In today’s economy, if a law firm partnership is going to survive, than the PARTNERS need to look beyond PPEP as the only measurement of the value of their personal and professional relationships with the firms. They need to return to the holistic dynamic of a partnership. That is you SHARE in both the PROFITS and the LOSSES of the firm.

For a lot of firms, there will be bad times in the year or two ahead. That is not to say that these firms cannot survive. And it’s not to say that profits are not important … it’s just to say that INCREASED profits, year after year, cannot be the only thing holding the partnership together. It just means that law firms, just like the rest of us, need to be willing to absorb the economic hit the best that they can.

“There are pros and cons to each side of the closed versus open source issue in legal informatics, just as in other disciplines like software development. For instance, closed sources provide added value in editorial services, quality control and currency. Although these endeavors should be rewarded, one can argue that the legal system is publicly funded, its decisions are in the public interest, and hence, primary legal material ought to be publicly available. Furthermore, one can claim that free access to legal source material would provide fertile ground for the development of innovative tools to search, analyze and apply the law.” – Dr. Adam Zachary Wyner, “Text Mining Case Law,” Legal Technology, Law.com

It’s a discussion worth having, and not just because firms continue to search for line-items in their budgets they can trim. Legal research, as we know it, remains a closed source via subscription services offered by two vendors, LexisNexis and Westlaw, with their proprietary tools — head notes, commentary, and advisory services. The World Legal Information Institute is free, independent, and non-profit access to the worldwide law, with 894 databases from 123 countries. While continued development of an open corpora of case law is exciting indeed, there’s one huge problem: the parameters of search.

LexisNexis and Westlaw use Boolean search, a technology that is already 30 years old. Free text search (commonly known as keyword search), as in Google, has its limitations: you get more extraneous information than you need. Both types of searches rely on strings or patterns created by words, not necessarily meaning. What we really need to perfect search in legal databases is semantic search, utilizing syntax and contextual semantics.

I wrote about using Powerset as a tool to search Wikipedia here last year. Powerset has since been bought by Microsoft, and you can get the feel for linguistic search there, but only on Wikipedia. I experimented with disambiguation searches in the Powerlabs while it was in beta, and passed along the suggestion to a couple of the AI scientists that this would be a very cool technology to apply to legal research. Wyner references General Architecture for Text Engineering (GATE).

Imagine the time and money legal researchers would save if they could just type a real question into the search engine in the open source corpora of case law, such as,”What are court rules in all jurisdictions governing the accrual of interest in condemnation judgments?” and get the precise, relevant cases. In my email discussion with Dr. Wyner today, he responded that the research community knows very little about the questions lawyers would want to query in natural language. He wrote, “The more such sample questions we could have as an open research community, the better able we would be to design tools to give the relevant answers.”

While open source and the perfection of text-mining tools through the semantic web will create further disintermediation in the legal industry, transparency and efficiency in legal knowledge systems are worthy goals.

Dr. Wyner’s blog is LanguageLogicLawSoftware.

Kevin O’Keefe has been an outspoken gadfly in regards to Martindale-Hubbell’s Connected, as have I.

Although Kevin is a non-practicing attorney, he has the ability to log into Connected.

I am an in-house director of marketing for a law firm, where I am the proponent for all things business development, yet I have no access.

If my firm ever chooses to subscribe to Martindale-Connected, it will come out of my budget.

If I have no ability to judge for myself the value of the product, if I cannot learn and then train my attorneys on best practices for the product, I will not endorse or pay for it.

So, while Martindale Connected is opening the doors to non-practicing attorneys, they might want to consider opening the doors to the keepers of the money.

As more and more law firms grapple with the economy, business as usual will never be the same for the legal industry.

We have watched, over the past few months, as AmLaw 200 firms shed thousands of attorneys and staff. And while law firm layoffs at Latham, White & Case, Pillsbury and other AmLaw 100 firms make the news and blogs, the smaller firms are flying under the layoff radar.

But law firms are FINALLY becoming more proactive in challenging their same-ol’ business models. We are hearing talk of rolling back the astronomical associate salaries, de-equitizing of partners, cutting back of billing hour requirements, and reducing hourly billing rates.

A big concern in all of this is: what about training the young associates? I keep hearing how clients do not want to pay for summer or first-year associates working on their files, which, in this economy, has lead to many a firm cutting their summer programs and either delaying start dates or rescinding offers to incoming first-year associates.

Has the time not come to require newly graduated law students to complete an internship prior to receiving their licenses to practice law? I wrote about it here last August.

One thing we ALL agree on is that law school does not equip young associates for the day-to-day challenges they will face when practicing law. Seeing the pass/fail rate of the bar exam, law school does not prepare you for that either.

However, each September we escort these young men and women, in their ill-fitting suits, carrying shiny new briefcases, to a window office near the top of a high-rise, and pay them upwards of $150,000-$165,000 per year, all the while billing them out at several hundred dollars an hour to the client … and they know NOTHING.

The Atlanta firm Ford Harrison introduced their “Year One” Associate Development program in 2007.

“Our goal is to close the gap between what law schools teach and what clients demand,” said C. Lash Harrison, managing partner of the law firm. “By placing the emphasis on learning rather than billing, Ford & Harrison will increase the capacity of its associates to handle greater responsibility earlier in their careers.”

So, while you’re mulling over another round of layoffs, cutting salaries, de-equitizing of partners, and reducing rates to battle the effects of the current economy, why not consider an “on-the-job training through mentoring, hands-on work assignments and direct observation of client matters …modeled after the medical school’s resident approach”?

“If you don’t cut associate starting salaries now, you are nuts. They were too high. Now we have to pay for it.” – Bradford Hildebrandt (as reported in the ABA Journal online)

Most of the biglaw firms just let them go. MacGuire Woods is rolling back salaries of its incoming associate class to $144k. Do I hear $135? $125? How low will the roll back go? In the aftermath of letting 190 associates go, Latham & Watkins has offered its 2009 class $75k to postpone their start date to 2010. Then there’s Simpson Thatcher’s approach: pay associates $60k to work at a non-profit for a year.

Now that biglaw’s bubble has burst, redundant associates flood the job market. Above the Law has some condescending, tongue-in-cheek interview tips for those seeking jobs at smaller firms. (My favorite comment was offered by poster #32, who in attempting to correct a prior comment, said you don’t “hang a shingle”; as any roofer knows, you “lay a shingle.” Now there’s another career option!)

As for hanging your own shingle, Omair Farooqui (an intellectual property associate at Mannatt, Phelps & Phillips) was laid off in June. He partnered with bankruptcy attorney Javed Ellahie, and started Ellahie & Farooqui, a small firm in San Jose, California.

Another push out the door is coming from general counsels who won’t be paying those biglaw fees. Some attorneys are taking their book of business to smaller firms, where cash-strapped clients may follow. The strategy here is to offer flexible rates to existing clients that make you more competitive. As reported in the National Law Journal, Mark Berkoff, a former DLA Piper bankruptcy attorney, offers rates that are 30 percent lower at Neal, Gerber & Eisenberg in Chicago.

In the incredibly shrinking law firm world, there’s a growing market for the virtual law firm as well. Geoff Willard left DLA Piper, started up a virtual practice, and said he was able to cut 25 percent off his clients’ bills. “Everyone realizes the big law firm model is broken,” Willard told the Washington Post.

With contraction of the legal marketplace, what will the new model be? Will there be a niche law firm revolution? Will the billable hour really die? Is this, as Hildebrandt International managing partner James W. Jones said, simply a matter of right-sizing? Do we really think a more corporate model will be any more successful?

I had an interesting query today: A partner asked if I would recommend a 3L accept a job offer from a specific AmLaw 100 firm. On the one hand, it has to be nice to have a job offer in today’s economy. On the other hand, the firm was caught up in the recent wave of layoffs, which now number 3,000 jobs in 12 days.

I would hope that any 3L out there with job offers is extremely careful as to what position they accept. Don’t sit back and be grateful that you received an offer. You MUST do your due diligence:

1) Has the firm had recent layoffs? If so, were 1st year’s let go?

2) Has the firm pushed back start dates for their 1st years?

3) Has the firm reduced hours, cut salaries/bonuses, or any of these?

4) Has the firm lost double digit percentage of profits per equity partner? How’s their revenue?

5) Is the firm diversified in offices and practices? Or are they too dependent in one specific area?

6) Is the firm suffering from flight of the rainmakers?

Run a Google search on the firm. What are the bloggers saying? Have you searched Above the Law??

And, don’t ignore all your other options: mid-law and regional law; public interest/non-profit law; government agencies, and the like.


If you are a lawyer in the favorable position of moving laterally, this one’s for you. I’m sure the COOLER think tank can add some more. Go for it!

Thinking outside the box…. for lawyers who are anticipating a move, or are being forced into a move, it might help you to have some of this in the playbook–so to speak –and be ahead of the game.

The Lateral Publicity Checklist:

  1. Save critical files to flash drives. Be mindful of proprietary work product.
  2. Update your Web profile. Make it match as closely as possible to the format of the new firm. Craft it to speak to benefits and value proposition, not just features.
  3. Upload your contact list to Plaxo. Your moves and your contacts’ moves update automatically in your address book (with a few clicks). Realizing that not everyone in your contact list is on Plaxo, it’s still a really great (and overlooked) tool.
  4. Secure digital copy of attorney photo. Don’t waste any time getting an updated photo done to match the new firm’s web site. Alternately, shell out the $250 to get a really good one. Show your firm you are willing to invest in your own success. (Entitlement is a thing of the past.)
  5. Write a short, to the point, press-worthy profile to be used with media releases. (This is different than web profile.) Don’t wait for the law firm marketing staff to have to pull it out of you. Help yourself by helping them. They ARE your advocates. They want you to succeed. They are on your team…right?
  6. Then, relinquish authorship. They are the pros.
  7. Respond immediately to all requests from new firm’s marketing department.
  8. Have marketing department prepare and print new business cards before start date.
  9. Search online for all iterations of your name. (Marital and pre-marital name too. While your at it, make sure your relatives and your mate have respectable foot prints. Oddly enough, it matters.)
  10. Search your name AND your old firm(s) + your name on MSN, Google, Yahoo, Twitter. Print off results and file.
  11. Set up a Google and/or Yahoo alert with your name and new firm/old firm.
  12. Do a search of your name every 2 weeks just to make sure things are moving forward with name association with new firm. Don’t forget #yourname or #yourlawfirm on Twitter.com.
  13. Begin building new content to push down any mentions of you with previous firm. (Sign up for new sites – see below)
  14. Update ALL social profiles as soon as possible. This will also send out update alerts to those in your networks.
  15. Mention your new firm name in any status updates on FB, LinkedIn, Plaxo, etc. several times in the first 3 months. Don’t forget to Tweet some content.
  16. Add a line to the beginning of your email signature: Please note new address. Keep it there for several months.
  17. Join JD Supra. Open profile with new firm information. Upload articles…quickly. They will likely return high on search result indexes.
  18. Join ABA social network Legally Minded, Legal OnRamp.
  19. Flesh out articles that you can re-purpose for publishing on new firm Web site, guest bloggging, Legal OnRamp, JDSupra, Legally Minded, etc.. They don’t have to be long. They need to have keywords and make sure that your by line reflects your new position. Get exposure. Get noticed.
  20. Press release should go to as many digital and print outlets as possible including law school, undergrad, and military alumni publications, as well as standard regional, national or international print media outlets. Don’t forget your hometown newspaper. Mom will love it. You never know where new work will originate. It’s all about connections.
  21. Notify directories. E.g. Findlaw, Martindale Hubbell, Chambers, Best Lawyers. New versions typically come out in the spring and early summer….hurry!
  22. Notify all organizations for which you might be listed as a board member or even on a membership list. (This may turn up in your Web search.)
  23. Create eNewsletter announcement for new firm’s general mailing list. Include your photo.
  24. Send hard copy letter to all clients letting them know of your new move. (I have a sample) Welcome them to inquire about your new firm –if this is not disallowed by any agreement with old firm.
  25. Send out personal email to your contact list (which you exported from Outlook to a CSV or Excel file to a flash drive…. see #1). Make it memorable. Include a photo and something unique about your new firm and how you make it stronger. Your new marketing department may have a branded template for your use. ALWAYS coordinate with your marketing professionals.
  26. Make a list of 15 people you should call or take to lunch in the next 90 days.

Advanced efforts include:

  1. Notify local, regional, national reporters that YOU know. Feed them background information on special topics or areas of interest. Or, provide your marketing PR folks with that information so they can help you. ALWAYS listen to your marketing people. My bets are that they know what they’re doing.
  2. Follow niche topics on Law.com and add comments to blog posts. Particpate in the social Web generally. Join the conversation. Pick your spots. There are dozens of special interest blogs – e.g. www.greenbuildinglawupdate.com
  3. Send internal email to your new partners (and associates) with a personal introduction. (not a mass email)
  4. Walk the halls and say hello. Not just once, but a lot. Have coffee, (If you’re in Minnesota this is not a problem. There are more coffee joints per square foot in the Skyway than any other place on earth. 🙂 ), do lunch, make time to establish key relationships. Talk to your marketing department for direction. They KNOW. Those key relationships aren’t always obvious.

Enjoy the adventure and congratulations!

Disclaimer: This post is cross posted at www.virtualmarketingofficer.com

“No one seems to be worrying about the next generation of lawyers.” – Richard Susskind, The End of Lawyers? Rethinking the Nature of Legal Services.

I’m not writing about this topic because my daughter just happens to be a 1L at Seton Hall University Law School, although it does weigh on my mind. Surely you have noticed the overwhelming disproportion of associate and staff layoffs compared to partners. (BTW, we need to come up with a novel adjective, something other than black: Black was Thursday, Monday, and Tuesday in the stock market crash of 1929; and Black Friday connotes retail profits in the shopping day after Thanksgiving.)
At Adam Smith, Esq., Bruce MacEwen writes about the “The Great Deleveraging” of biglaw. He’s building a case for non-lawyer capitalizion and public ownership, and perhaps it is time for something along the lines of the Clementi Review in the U.S. In today’s blog, he develops an insightful take on leverage:

Why does leverage matter? For starters, as I noted in my 2005 column I quoted at the outset, leverage is your best friend in good times and your worst enemy in bad times. While we’ve heard the drumbeat of client complaints about paying for useless junior associates for years, this is suddenly the kind of environment where it will grow sharp teeth and bite hard. Either: (a) massive litigations will not be pursued because they’re too complicated, uncertain, protracted, and expensive; and/or (b) if they must be pursued, contract attorneys, staff attorneys, and outsourcers will provide the human throw-weight needed for massive document review; and/or (c) corporations will simply insist that document review be completed for flat fees of $X/unit [$1.00/page? $0.50/page?]. In any event, no one I talk to–absolutely no one–believes that the litigation “factory” model with one partner overseeing half a dozen or more associates who are billing ’til the cows come home will be a predominant source of revenue going forward.All well and good, but I think a more interesting calculation compares the ratio of non-equity partners to equity partners.


Now let’s consider the impact of non-equity partners. MacEwen asks, “First, why have no firms announced partner layoffs? Isn’t this the worst kind of cronyism, safeguarding one’s peers, taking it all out on the “little people,” and demonstrating lousy business judgment to boot, when the cost savings realized by offing (say) 10 associates could probably be realized by tossing a single partner overboard. ” What is the impact of non-equity partners on the firm? MacEwen says they are the most expensive form of leverage. But the consequences they have on the culture of the firm are most instructive as MacEwen calls it:

  • The culture shifts from “excellence or else” to “good enough.” I don’t think that “good enough” is sustainable in this environment.
  • In the palmy days of 2001–2007, having a flexibly extensible non-equity tier served as a crutch for firms that wanted to avoid making difficult decisions about people or having awkward conversations with them. I don’t think that those difficult decisions and awkward conversations can be postponed in this environment.
  • One of the reasons we’re seeing widespread associate layoffs–apart from the pure economic imperative to cut costs in order to match revenues to capacity–as to do with morale. It’s dreadful to morale to walk the halls seeing a bunch of your colleagues with too little to do, who are then guiltily sneaking out at 5:30. The non-equity tier, with nothing to aspire to and perhaps psychological speculation on my part, which I am shockingly unqualified to offer) feeling themselves ever so slightly “damaged goods” only exacerbate this. None of us, none of our firms, have room for morale-busting zombies in this environment.
  • The ranks of the non-equities grew not by design but by happenstance and, frankly, inattentiveness. While it may be true, as Oliver Wendell Holmes famously remarked, that “the life of the law has not been logic, it has been experience,” it’s time to apply some analytic logic, some serious and rigorous strategic evaluation, to the weed on steroids that has been the growth of the non-equity tier in too many firms over the past palmy period. And no, we cannot afford to do otherwise in this environment.

So there you have it – one of the best analyses of the future of the pyramid in the legal industry and a harbinger of things to come in Q2 as the recession continues. And now a word on the War for Talent: Fresh talent and innovation will still be necessary. As Susskind writes, “It is our children who will shape the profession, because they are tomorrow’s lawyers and clients….In the world of technology today and in law tomorrow, the child will be father of the man.”

As we all know, this has not been the best week for Big Law and layoffs. It appears that it is “California” week. It started out with Orrick, traveled south to Latham and O’Melveny, and today it moved back north to my former big law experience, Pillsbury.

So what do you do when you read something like this, about your former colleagues:

Pillsbury Winthrop Shaw Pittman laid off 55 lawyers, 10 legal professionals (i.e. paralegals and docket specialists), and 90 staffers across all of its U.S. offices today, according to a firm spokesperson.

I put in a couple phone calls to my peers, colleagues and friends at the firm. We had spoken the other week when the impending layoffs were leaked by a partner on a train.

I have found that human contact is what many of those caught up in the layoffs need right now … well, that and a job. Times are tough, and I do not envy those who have been caught up in the latest wave of layoffs. I will personally do all I can to help network, reach out, follow up on leads, forward resumes, etc. for anyone, but a lot of the jobs have simply dried up.

While marketers are resourceful and have skills that can quickly adapt to new industries, I really worry about the lawyers. For those of us who work in-house at law firms, we know how difficult it is for attorneys to quickly adapt. I wonder how many of them have any other skills, or job experiences, other than being a lawyer at an AmLaw 100 firm?

And what about the administrative staff? They are least able to afford losing their jobs at this time. From what I have heard out there, temp positions are nil, so what are the administrative staff going to do?

But through it all, my greatest concern is that so many people are still just sitting around, doing their jobs, yet not managing their careers. Today is a great day to market yourself, because no one else will. When the first signs of trouble occur, don’t let your head go in to the sand.

Here are a few signs that it might be time to update your resume:

And, new to the list,

Hey, I could be wrong about all of this, but, then again, I might be right.