January 4, 2007
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News & Views
WHO WILL FOLLOW THE LEADERS?
Partners or senior attorneys depart from every law office at one time or another,
yet most firms don’t plan for this eventuality. In a recent survey, 53 percent of attorneys
polled said their law firm or legal department does not have a formal succession plan in
place for key positions.
The survey – developed by Robert Half Legal, a staffing service specializing in attorneys,
paralegals, and other highly skilled legal professionals – was conducted by an independent
research firm and includes responses from 300 attorneys among the 1,000 largest law firms
and corporations in the United States and Canada. All respondents have at least three years
of experience in the legal field.
"It’s understandable that succession planning may sometimes take a back seat to billable
work or urgent legal matters, but law offices should not wait until a leader departs to begin the process,"
said Charles Volkert, Executive Director of Robert Half Legal.
Volkert recommends that law offices begin by choosing high-potential employees, providing
them with ongoing mentoring and including them in strategic discussions relating to firm or
department operations.
"Succession candidates must be given ample opportunity to build their skills and leadership abilities
in practice management, new business development, marketing, strategic planning, and client service,"
Volkert said.
THE LEGAL PROFESSION: KEY TRENDS AND OUTLOOK FOR THE FUTURE
Altman Weil Inc. provided this article exclusively for this issue of ALA Currents. For more
information, visit www.altmanweil.com.
By James Wilber
jswilber@altmanweil.com
Altman Weil Inc. recently conducted interviews with two dozen managing partners and chairpeople of
large and mid-sized U.S. law firms regarding the current state of the legal profession, its future, and key
challenges. As a result, several common themes emerged relating to growth, people, competition, client
service, and pricing.
Growth
Growth was a universal theme and one generating a good deal of uncertainty, if not outright anxiety.
Consolidation in the industry was on nearly everyone’s minds. Most respondents felt their firms must
grow to survive. Even representatives of firms with 500 or more lawyers wondered if they were big
enough to compete. Some firms are pursuing specialization strategies in an effort to maintain their
independence in a sea of mega-firms. Others bemoaned the tendency they saw for corporate clients
and general counsel to insist on hiring national, brand-name firms as “safe” choices.
The internal implications of rapid growth were also mentioned. Newly merged firms, as well as
those with significant lateral additions, wrestle with cultural, office, and practice integration. Also,
growing head count does not always translate easily into increased profitability.
Altman Weil comments: Law firms need to grow in order to meet their clients’ growing
needs and to provide internal opportunities for their professionals. But the key is to get bigger and better.
Firms should grow strategically, controlling paces and methods of growth while maintaining their practice focuses.
Smart growth and strategic specialization will result in better opportunities, better clients, and better performance.
People
Virtually all respondents said attracting, retaining, and motivating high-quality lawyers were high priorities.
The consensus: Good people equate to a strong organization and a clear competitive advantage. Several
law firm leaders also noted that the pool of quality law school graduates was simply not big enough, as
they found themselves competing with brand-name firms for new talent.
Many commented on the “free-agent mentality” among partners and the struggle to develop a new
career model for Gen-X lawyers who are seeking work-life balance, and who admittedly feel less loyalty to
their firms than previous generations of associates did.
Diversity is also on law firm leaders’ minds. One commented that achieving true diversity could
be a “big differentiator” for a firm that could get it right. Law department leaders said they emphasized
diversity both internally (in their own departments) and externally (in the law firms they retain).
Altman Weil comments: Law firms and legal departments need to get serious about
sophisticated, ongoing training and development programs for every lawyer. This does not mean
simply giving each lawyer a CLE budget, but instead devoting time and resources to true professional
development. These efforts will have a positive impact on retention, including the retention of diverse
lawyers.
Competition
Competition among law firms is fierce, but opinions on the chief drivers of competition varied. Some
saw firm growth as the main driver and national, brand-name firms as the biggest threats. Others
noted clients’ convergence programs, with associated pricing pressures pushing them out of contention
for prime work. Respondents identified several factors that they believe provide a competitive
advantage, including practice specialization, quality people, strong internal training and development,
strategic pricing, and enhanced technology. But most said the primary differentiating factor is superior
client service.
Altman Weil comments: All of the ideas mentioned are important differentiators, but the
defining competitive factor for law firms is execution – the ability to focus on a few key strategies and
do them very well. An unwavering focus on and commitment to clearly drawn and well-understood
strategies will make a law firm stand out.
Client Service
Clients today are less loyal and more demanding. Several respondents commented on the “backbreaking RFPs”
that clients require. For some firms, client convergence programs create significant pricing pressure. Firms work
to make and remain on a client’s “short list” as a preferred provider. This requires flexible billing practices,
improved project staffing, and better communication.
Legal vendors also commented on the increased value expectations among their lawyer customers.
Lawyers “expect quick results” and are “service driven.” One vendor noted the need to “actively manage”
relationships and “articulate and quantify” the benefits of their services.
Meanwhile, corporate legal departments must answer to their own internal clients and face pressure
to justify their value to corporate boards and CEOs.
Altman Weil comments: As clients become more sophisticated, law firms are being held to
ever-increasing standards. Some firms have balked at this change, while others have embraced it – and
rightfully so – as an opportunity to gain competitive advantage.
Pricing
Pricing is a perennial concern as rate increases – and not increased productivity or improved leverage –
are driving firm profitability. Some have considered alternative pricing, but one managing partner observed
that clients are reluctant to get away from hourly rates. They don’t want to change the “pricing paradigm,”
they simply want lower rates.
One legal department representative noted that negotiating discounts with some law firms had backfired,
as those firms subsequently declined new matters. Some law firms are so busy that they “will not work for
them at these reduced rate structures.”
Altman Weil comments: Price is important, but it is still secondary to quality of work and service.
Law firms must focus on the value proposition behind the pricing. Firms need to understand what their clients
need and where their services fall on the value chain. At the same time, clients need to recognize – and pay
for – quality, or run the risk of being under-represented. The key is to match the right work with the right firm.
Management Innovations
HOW TO MANAGE YOUR INNOVATION ASSETS
“Asset management” usually refers to physical objects. But as businesses compete
in the emerging knowledge economy, they must learn to manage intangible assets such
as intellectual property. How do you develop a management approach that improves a
business’ ability to use its core assets for sustained innovation? People – sometimes
known as “talent” – are key, especially those who envision and imagine new ways of
doing things. But this involves more than the “creatives.” It also includes corporate
strategists, IT developers, shop-floor manufacturers, salespeople, and marketers. And
don’t forget your subject matter experts, opinion-formers, and thought-leaders who are
often scattered in the white space of an organization chart. The primary task of innovation
asset management is to expose this talent, both to others like themselves and to the
rest of the organization, and to engage them in innovation efforts that matter to the
business. Human resources technology can now identify and relate these people,
visualize their social networks, and capture and codify the kinds of knowledge they offer.
Software products such as AskMe and Sonar6 are designed to help with talent management.
(Intelligent Enterprise, December 1, 2006)
www.intelligententerprise.com/showArticle.jhtml?articleID=194500328
BECOME AN INNOVATION DETECTIVE
Effective idea generation depends on research that identifies categories of exploration
so the topics are positioned within the surrounding material. Design research helps development
teams create structure to drive effective brainstorming. In the early stages of the development
process, effective research does not need to be high priced and time consuming in order to
yield results. Fast, inexpensive techniques such as role playing and role reversal can help. So
can asking difficult questions like, “How you can make the innovation worse?” Another
approach: Review the most significant innovations introduced by your organization during
the past five years, and then follow them back to their sources. Or resurrect the biggest
flops and trace those back. This kind of detective work can offer insights regarding which
tools have been used successfully and where gaps or inconsistencies lie. Then you’ll have a
baseline from which to develop new ideas. Or, as one researcher put it, you’ll have
brainstorming – with a little more brain and a little less storm.
(Core 77, December 2006)
www.core77.com/reactor/12.06_brainstorm.asp
Building Buy-In
Written by firm consultant and training expert Paul Trout, “Building Buy-In” is a new column in ALA Currents. It
will help legal administrators learn how to effectively build buy-in from thought to action within the entire firm.
HIGHER LEVELS OF SUCCESS: AN INTERVIEW WITH KURT THAUS
By Paul Trout
In the business world, a C-level executive can be compared to Chicago’s O’Hare International Airport, as both are:
- busier than almost anyone else in the country;
- central to a functioning network of commerce; and
- are taken for granted, but hold a great amount of influence
on the everyday lives of lots of people (especially when things go wrong).
Kurt Thaus, Chief Information Officer of Telephone and Data Systems (parent of U.S. Cellular), is not unlike
any other C-level executive in these respects. Where he differs is in his superb capability to use tools to help
better understand what his organization needs and how to deliver it, resulting in a higher level of success
(and fewer delays). Read on to learn about the tools he used to land his job, win over new reports, and
overcome skepticism.
Q: How did you arrive at the level in the organization you are at now?
A: I did have to do a little bit of selling to get this job! I could tell when I met
her [my current boss] for a second time that I hadn’t sold her on something. I sensed she may be concerned
because I was not a prior sitting Chief Information Officer (CIO). I was a Senior Vice President of Technology
Management at T-Systems (the sister company of T-Mobile). To me, the transition to CIO was easy. But I
didn’t have the title, and I think there was a concern that for such a large ($4 billion in revenue) company,
the person coming in should have been a CIO in a prior life.
Q: Sometimes titles get in the way of experience. Was she forthright in what her issues were?
A: I’m hoping what helped in that situation is that I put myself in her shoes. I thought,
‘What is she looking for?’ ‘What does she need to sell me internally?’ Having that empathy for what she was trying to
achieve really helped from an internal selling point.
Q: So what approach would you suggest to someone who has a new boss or has inherited a new team?
A: I can only tell you what I did here. I went around and tried to understand my constituents. I really didn’t
know what I was walking into other than what other people were telling me. I had to either validate or refine that information
by going around and getting to understand them. The other thing I tried to figure out as clear as I possibly could is:
‘What are people looking for?’ ‘What is it that they really want?’ Even if at first what they wanted was for me to
stay out of their way. I feel that you can never stop understanding your customer – either internal or external.
Q: Is that what they wanted?
A: In some cases, it was. If I could demonstrate that I was listening to them – and
if I could affect certain situations where I legitimately helped them at the right time and followed through on their need –
that would build trust. I needed to demonstrate and truly act as their advocate. I think you have to go to the folks
you work with and draw information out of them. Don’t wait for them to come to you and ask for things or complain.
Q: Do you always challenge your own assumptions?
A: I think you learn a lot through listening to folks and seeing how they talk about
things, what they talk about, and if they ask questions or if they make statements. The more you listen to folks and
understand what they want – and the more they understand the things you are doing and that you’re being up front
with them – it makes the situation much better, and it improves your odds of success.
Q: How do you see becoming better at internal selling as helping people get over some of the skepticism that pervades business culture?
A: For example, if I went to my CEO or another CEO and I told him that he was being “sold to,” he might not
take that the right way, or he may not be very comfortable with that. But if I went to him and said, “Look, I want something
from you, or I want to do something and I want to lay out the facts of why it’s going to be good for you, why it’s going to
help all of us out, and I’m going to seek a decision from you,” that’s much different. So, what we are talking about is achieving
a higher level of and a more consistent degree of success … because (how good you are at internal selling) has a direct relation
to a person’s success.
Paul Trout is a Partner with Akina – a firm that helps clients improve their sales, marketing, and leadership
effectiveness. This column is an excerpt from a book he is writing on Building Buy-In. He encourages readers to
submit case studies, learnings or questions about Building Buy-In, which may become part of the book and appear
in a future column. Contact him at ptrout@akina.biz or (312) 224-8028.
Peer Points
ALA Management SolutionsSM is a free service provided as an ALA membership benefit. The professionals
who staff this help desk explore resources and share information about hot law-office management topics like the one
addressed here. If you have a question, call ALA Management SolutionsSM at (847) 267-1252 or e-mail
infocentral@alanet.org.
INCREASING MORALE AMONG STAFF
Is the Behavior of Your Staff a Reflection of the Firm’s Culture and Policies?
As stated in the Legal Management article “Recruiting, Motivating and Keeping Effective
Support Staff,” by Shannon P. O’Brien, “...While money is important to employees, what tends to
motivate them to perform is the thoughtful, personal kind of recognition that signifies true
appreciation for a job well done. Motivation tends to be even stronger when the form of recognition
creates a story that the employee can tell friends and family for years to come.”
Also, ALA recently published 200 Ways To Make Your Law Firm an Extraordinary Place to Work,
based on ALA members’ descriptions of the events, activities, special recognitions, and other “best practices”
in place at their firms. It also contains ways to foster a culture of integrity, caring, and camaraderie. Visit the
ALA Bookstore for more information.
The October/November 2006 special issue of Legal Management focuses on ways to make the law
firm an extraordinary place to work. Access this issue by clicking here
for articles on building and maintaining morale in the office. In addition, please review the following documents for guidance on
this issue:
- The ALA Management EncyclopediaSM contains
a valuable article, “Make Your Firm a Great Place to Work” by Marcia Pennington Shannon. Shannon explains that creating a
great firm in which to work has no downside, and she offers several suggestions about how to create such a place.
(This article is also excerpted in the aforementioned special issue of Legal Management. Click
here for more.)
- Gerald Faust, CEO of Faust Management Corporation, spoke at ALA’s 29th Annual Educational
Conference and Exposition in Denver in May 2000. Faust’s book,
Responsible Managers Get Results, with Richard Lyles and Will Phillips, focuses in chapter three on developing responsibility to the organization.
- See the Journal of Extension for another article, “Understanding Employee Motivation” by James Lindner.
- Accel-Team discusses motivation in the workplace here.
- United Kingdom-based Dreamcatcher Coaching offers several articles, self-motivation action plans, and other resources here.
- “Basics About Employee Motivation (Including Steps You Can Take)” is in the library of resources, available through the Management Assistance Program for Nonprofits.
The Society for Human Resource Management (SHRM) offers several useful sources (available to SHRM members only),
including:
Finally, a few suggestions for further reading (check with the local law library for copies of these articles):
- “Seattle Practice Sets Up Five Tiers of Recognition.” Law Office Administrator, January 2002.
- “Training and the ROI of Fun,” Shari Caudron. Workforce Magazine, December 2000.
Special Note: ALA members have free access to the ALA Reference Desk. Send any question on legal
management issues to infocentral@alanet.org. Staff will conduct
personal research on each question.
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CREDITS
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of its members.
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