However, as we saw in New York between 1993 and 2001 when Mayor Giuliani tackled the horrific serious crime rates in that metropolis – he surprised everyone when he focused first on petty crime. The result was that big crime was reduced by over 50% to the point where it became relatively safe for womenfolk to walk down the streets. The same can apply here.

Meetings are just one of the examples of where addressing a few little things can have an impact elsewhere. Allowing partners to consistently be late for meetings, fiddle with mobile devices or take calls, even if done quietly, is tantamount to what is depicted here; chaos, rudeness and ultimately will cause a break-down of communication and respect. Leaders need to nip this in the bud and set the example in doing so. (Sean Larkan, Edge International)

What are some little things which at first blush don’t seem to warrant making a fuss over? Let’s take meetings as an example – for instance, allowing:

1. people to be consistently late for meetings;
2. people to get away with simply not turning up and not notifying anyone in time or giving a reason;
3. the checking of emails or searching the net on PDAs;
4. people to keep their phones switched on, take calls or walk out to do so;

What message are being sent by the transgressors?

1. you are all less important than what is on my device or what I am thinking about;
2. this is boring ; I would rather be fiddling with this;
3. no-one cares if I am late;
4. I don’t respect the people or the system;
5. my mind is elsewhere but no-one seems to mind;
6. I am unable to focus on one thing at a time.

What are the other ramifications?

1. they are being selfish and thinking that what they are doing is more important than what others are doing; if not addressed, this becomes ‘okay’ behaviour;
2. they will repeat this behaviour and attitude in front of people who report to them who will learn bad habits;
3. they will do it to clients;
4. attendance at meetings will eventually drop;
5. it can lead to a chaotic situation – meetings become a shambles and lose impact. Apart from being irritating and frustrating this costs serious money in wasting the time of expensive resources;
6. it impacts leadership confidence;
7. it impacts respect for leadership roles;
8. it has a knock-on effect in other parts of the organisation;
9. it is a sign of weakness;
10. it will invariably be counter to what the firm’s values state;
11. people follow what others do or what leaders allow – it has a horrible way of being replicated.

Fortunately, these are things we can change. Essentially this is about training ourselves and others to be timely, show respect, be one-focused, one-pointed and not easily distracted in relation to meetings or in conversation with someone. Sometimes simply asking people or reminding them from time to time is not enough. It may take a tougher stance and setting the example.

As Eknath Easwaran, the influential eastern spiritual teacher taught, we can train our attention wherever we are, whatever we are doing, and the benefits are well worth the discipline.

We have all been on the highway when another driver has allowed him/herself to become distracted. It can be disconcerting and dangerous. (Sean Larkan Edge International)

He gives the example of sharing the highway with a distracted driver with his mind on other things – in the lane next to you and suddenly, without warning, he wanders into your lane. Then, with equal abruptness, he realizes what he has done and overreacts – first with the brake, then with the accelerator – and darts back into his own lane. An accident waiting to happen.

If we could only see it, everything in life suffers like this when attention wanders. A mind that darts from subject to subject is out of control, and the person who follows its whims weaves through life, running into difficult situations and conflicting with other people. But the mind that is steady stays in its own lane. It cannot be swept away by an impulsive wish to check an email or the Internet on a PDA. There is no skill more worth learning than the art of directing attention as we choose.

What to do in relation to the example given above? It is really simple:

1. meetings start on time;
2. leaders should arrive at least 5 to 10 minutes before a meeting and be organised to start on time;
3. no PDAs or cell-phones in sight or ‘on’ in meetings;
4. if anyone arrives late too bad, the meeting commences;
5. no calls in meetings;
6. if someone is addressing the meeting give him/her 100% attention;
7. emphasise that all this is not about being nit-picky but about showing respect for one another, being sensible and living the firm’s values, which 99% of the time will require respect for one another.

As Easwaran said “there is no skill more worth learning than the art of directing attention as we choose” – we do this when we arrive on time for meetings, when we do not allow ourselves to be distracted and we pay attention to someone else when they are talking to us. Such simple things. Such big impacts, throughout an organisation. And it all needs to start with the leaders.

Sean Larkan, Edge International

One needs a simple system to track these elusive, important items.

Leaders need to develop a system to manage following up on the dozens of important, single items that crop up and need attention – via email, a web article, a tweet or a LinkedIn enquiry (Sean Larkan, Edge International)

Over time, all of us have probably worked up some or other system to try to do this – if they are anything like the ones I have tried, they are probably a bit hit and miss and sometimes more trouble than they are worth – this in turn creates its own pressure as you are always worrying that you may have overlooked an important item.

When I used to help run large law firms one of the things I used to say to new lawyer recruits on the subject of  ‘what it takes to succeed in a  law firm?’ is that I had seldom come across a successful practitioner who was not accessible, responsive and reliable (‘ARR’). I think this applies equally to leaders – that is why leaders need a simple system for following up emails and other electronic items that cross their desks.

Some busy leaders deal with this by simply tackling all enquiries virtually as they hit their desks – this is their system – they never sleep and seem to have an email system wired into them as an extension of their bodies – a couple of leaders of law and accounting firms spring to mind. These are seriously busy people but I am always astonished how they have always, consistently, managed to do this. Very impressive. Most of us don’t manage to effectively be on-line 24/7.

I have evolved a simple system which I would like to share:

1. create a To Do list in something like MS OneNote - fantastic for this purpose (and for many other uses) by the way as: 
   • it updates between all your devices; and 
   • you can easily select and slide headings or a group of items under a heading in your To Do list up or down according to priority, and it renumbers accordingly;
2. create an Evernote account (free) and create a notebook in Evernote (by right-clicking the heading ‘notebooks’) called ‘Actionable emails etc’. You will see that after installation (you may have to select this as an option) an Evernote button pops up on your email account e.g. Outlook or in your browser header e.g. Chrome, IE etc.;
3. any time you get an email, URL or article link that you want to track and it is not attached to a particular project you can simply click on the Evernote button, choose the ‘Actionable emails etc’ notebook in Evernote and it will automatically drop a copy in there for easy later recall or follow-up. The beauty is, once you have done this it is not going to get lost  and is dead easy to access;
4. at the top of the To Do list insert an item – ‘Actionable emails etc’ – this is merely to prompt you to flick to Evernote daily or from time to time to run through those actionable items and attend to any that may have slipped by, and of course delete those you have dealt with;

Once this is set up it is really quite easy and relieves stress and pressure as you are not worrying about items that may have slipped through the cracks. Another benefit is that it is more or less automated as well as being quick and easy. As mentioned, you can also access OneNote and Evernote from any of your devices. 

Maybe readers have other good systems they have perfected and would like to share?

Sean Larkan, Partner, Edge International

Internet-related marketing activities are getting a lot of attention, quite rightly, but as practitioners have only so much time available for marketing, there appears to be an opportunity developing to selectively revert to old marketing practices. As lawyers have moved away from more traditional relationship building practices they may be leaving a gap for a return to old tried and trusted methods. (Sean Larkan, Edge International)

Many of us have said or heard said how clients no longer like to be lunched or invited to too many social functions. A quick coffee has become the new ‘client lunch’. Anecdotal evidence suggests however that some clients may be missing the more personal touch of old. They also, it seems, like the trust and closeness of these personal relationships that are steadily built up and strengthened over time.

Law firm leader Scott McSwan of Queensland mid-tier McKAYS feels there has been a shift – he has always been willing to try innovative new ways of delivering service or differentiating his practice or firm (he was one of the first practitioners I knew who geared up a matrimonial practice to 10 to 1) – when he mentioned he had picked up on changing trends and a possible gap he felt existed around building client relationships I took note: ’lawyers now have ever more kinds of marketing activities to manage, undertake and keep track of – particularly via the Internet and using social media channels. However, everyone has only so much time to do non-billable work and the more time that lawyers give to these other kinds of marketing, the less time they have to give to the more traditional kinds of marketing like client relationship building!’

And what are some of these new marketing avenues which are getting attention? Scott:‘It depends very much on the area of practice. Some areas are more conducive to, say, Internet marketing, social media channels, electronic wire and news snippet services and so on, than others.  Certainly a lot of firms are giving more time to their online profiles and websites which of course is necessary and good, but at what cost? There is an interesting marketing shift. With the advent of the Internet the effectiveness of the traditional methods are in my view being eroded. There is proliferation of accessible alternatives online now available to the prospective client.’

This may leave a gap for the re-introduction of the more traditional ways of developing and nurturing client relationships – back to a more personal touch.

Candice de Bruin, the dynamic young CMO of Werksmans confirms this: “We see it come up more and more that investing in long-term relationships has real benefit for the client and for the firm.  However, it is incredibly time-consuming when it comes to thoroughly understanding your clients’ business needs, but I’m sure most lawyers will admit that the clients they have known for years and where they have built up a trust relationship, get more insightful and targeted advice than newer clients.  And the benefit works both ways; those long-term clients are the ones who view us as long-term partners, not just short-term advisers.  I’m not  saying there is no place for online marketing.  There are many benefits: it’s got wide reach, it’s more immediate, can be cost effective and can be tailored to suit the needs of a particular target market – but I would think that this can’t and won’t ever substitute for getting to know your clients and their business. Thankfully, this is still very much the driving ethos at at our firm.”

So, what are some of the more traditional means of marketing/building relationships that are coming to the fore as possibilities?

In this context Scott feels that: ‘clients experienced in choosing legal services – and those that have substantial spends on legal services – and these are the ones we target, are not (in my experience) using online alternatives to do their real choosing. Furthermore high value referrers of work are not using online alternatives. They are still staying with traditional personal referrals and personal contact driven methods of identifying and selecting legal providers. I believe that law firms that seriously diminish their personal network are, to that extent, excluding themselves from consideration. 

Looking ahead – any implications?

Candice: I feel strongly we need to take care to  ensure the importance of an investment in the long-term relationship is instilled in the younger lawyers too. We must never lose sight of this. Scott adds: ‘There is an opportunity here – law firms that ramp up their personal contact can fill the gap increasingly left by other lawyers who are possibly occupied with or even distracted by online and related marketing activities which is necessarily less personal. I also anticipate in time there will be a generational gap and loss of marketing know-how… as junior lawyers are less likely to have been role modelled relationship marketing by partners they report to.

LLB: I think there is something in each of the points made above -

• things have undoubtedly changed; one has only to stop to think for a minute where all the attention is being given from a marketing and relationship development perspective;
• also, many clients still hugely value the comfort and business benefit that comes from being engaged in a long term strategic relationship built around a deep understanding by the practitioner of a client’s needs and imperatives;
• while there is massive benefit that can be achieved taking full advantage of the many new avenues of marketing activity (while not as personal as the more traditional ways, they still involve sharing and building very good relationships, even if some of these are ‘online’) sight should not be lost of the value and place in a marketing mix of retaining and nurturing the traditional client relationship building methods and skills;
• it is also imperative that these skills are passed down to young practitioners – this will not happen on its own, it is something that will require recognition of the challenges and opportunities, and then leadership, drive and implementation.

As markets and client prerogatives have  evolved and younger professionals have more actively adopted new strategies to cope with them like embracing social media and Internet marketing in all its forms and all it has to offer, they have left some gaps for experienced practitioners to use the tried and tested methods of old – ‘the old dogs can come out to play’. What I am talking about simply is taking a step back to when building business and client relationship management was all about doing just that, building personal relationships and trust and putting real time and effort into that side of things. Nowadays there is a danger that some will overlook these fundamentals. I think both approaches have their place and I suspect that when we look back in ten or so years’ time we will find them co-existing; just two approaches to the same thing – building rich, long-standing client relationships around trust and respect and a mutual sharing of information.

Sean Larkan, Edge International   sean@edge-international.com

Jordan Furlong, in “Law Firms and Women Partners: You’re Doing it Wrong‘ emphasises that if firms are following typical practices in how they promote women into equity positions they are missing a strategic opportunity and effectively sabotaging their own market viability by:

Too many firms are making a dumb mistake when it comes to hiring and promoting women partners (Sean Larkan, Edge International)

• wasting vast talent opportunities;
• overlooking or ignoring what women (half the population) could bring to firms in various ways;
• a continued reliance only on hours to measure productivity and contribution which short-changes women.

As a result firms are less capable and less competitive. He leaves us with the tantalising idea of the benefits that will be enjoyed by the firm which ‘gets this right’!

LLB view on this issue?

One thing law firm leaders can do much better is to actively communicate with and keep in touch with prospective women equity partners in their firms. Too often one hears of a female partner who, rather than make a fuss, quietly leaves and joins a corporate or maybe takes a break from law, too often lost forever. Also, a multi-pronged disaster for a firm. Maintaining this type of active contact and keeping the communication lines open can avert this type of issue cropping up. It requires a genuine effort from leaders which builds trust, as well as a good dose of flexibility.

In ‘Five Keys to a Successful Lateral Hiring Strategy‘, Ed Wesemann argues that law firm lateral hire strategies often don’t work , due mainly to poor execution, not the strategy itself. He sets out a workable strategy for firms to follow when lateral hiring:

1. set the bar high enough to ensure you hire winners not losers;
2. use internal networks to identify good candidates;
3. do some research around your short-listed candidates;
4. be in direct touch with candidates – they appreciate this and you will learn a lot more; and
5. find out what the candidate is truly trying to achieve by making the move to your firm.

LLB view on this issue?
Lateral hiring should be undertaken as the implementation of an agreed strategy. Too often it arises as a partner in another firm or a search executive has approached a partner in one’s own firm. While this can sometimes still result in a happy ending, it can also waste time and divert a firm’s leadership away from the key issues and even the areas where truly strategic hires should be made.

A focused strategy using Facebook’s very own rich data on users can prove to be a boon for carefully targeted business building strategies by law firms (Sean Larkan, Edge International)

Jeff Morris offers a very interesting take on using Facebook strategically to target and engage with very specific potential client groupings in “Strategic Social Media‘. This is made possible as Facebook has very rich searchable data about their users. This provides a very unique opportunity to target your audience very carefully and strategically, not by talking about or trying to ‘sell’ your firm but by sharing, and doing so with content that users want to read. Jeff throws up some fascinating insights and great ideas.

LLB view on this issue:

Many law firm leaders do not view social media as a strategic tool that firms can use in this way or that they should pay much attention to. I disagree, social media interactions provide a very powerful window into the heart and soul of a law firm (and this is how others connect with us emotionally, which is critical as this is how they assess our brands) and a fascinating picture of a firm, and its all up there for everyone to see and experience. In some respects, a ‘brand offer on steroids’. So, very strategic.

Sean Larkan, Partner, Edge International

Here’s looking at you kid, that is, if you are on my right-hand side and are the right colour – the Gouldian Finch chooses its mate by using only  its left brain and right eye. While clients may not do precisely this, we need to recognise they are all individuals, are different and use different criteria to choose our firm or our partners for that next assignment. It is also these individuals who determine the power or otherwise of our brands – Sean Larkan (Image: (c) www.birdsville.net.au)

This provides a timely reminder – we somehow seem to assume that all clients fall into one amorphous group – ‘clients’  - and that all our marketing and approaches to them can be similar and should produce the same results. Of course, this is wrong. Each client is very different. Each individual at every client is different. And it is these individuals who choose our firms or the partners at our firms for their next assignment. It is also what they think, these individuals, that constitutes our firm brands, and the individual personal brands of each of our partners. Some of these individuals are notoriously one-eyed. Others adopt what one may call a balanced approach, taking all factors into account. In each case we need to understand and respect this.

What can we learn from or do as a result of this?

1. firstly, simply understand and respect their individual differences. Some clients are definitely left-brainers, detail people,  even pernickety (excessively precise and attentive to detail; fussy), want every ‘i’ dotted and ‘t’ crossed, while others rely on trust and relationships and that you will do the right thing by them and ‘sort out the detail‘ – the ‘just tell me where to sign‘ type. Others are a wonderful balance between these extremes;
2. understand what constitutes your firm’s and your individual partners’ brands (and what gets them chosen); it is what these same client individuals think or do not think. It is not what your firm offers to market or what their organisations think – organisations don’t ‘think‘. We should never forget this;
3. therefore, go to a lot of trouble to truly understand what makes the key individuals, usually the decision-makers, at your key clients, tick. What are their preferences? How do they, individually, like service to be delivered? What are their typical styles of behaviour, thinking – how do they interact with others? Are they generally constructive in their styles or defensive, either aggressively or more passively, in the latter case tending towards avoidance and compliance or conventionalism at all cost. Our partners all say they understand this, but do they really? Too often changes at key clients, which may have been months in the making, take place and catch us by surprise.

I have learned this first-hand in a roundabout sort of way through my consulting work. It has made me approach this area of interaction very differently.

A lot of my work constitutes organisational turnaround and growth strategy work, and as a result, I work closely with leaders. In turn many of them are interested in developing their leadership skills and as a foundational element for this we usually have them undertake a scientific diagnostic (in my case via Human Synergistics with whom I am an accredited practitioner) around their leadership styles of behaviour, thinking and interaction with others. I have learned through this, that each client is uniquely different (but no less successful), and has different buttons that need to be understood in dealing with them. It has been a massive help and made me look at individual relationships and how they unfold and should be managed, very differently. I think we need to have this sort of understanding of every key individual at key clients.

Sean Larkan, Partner, Edge International  sean@edge-international.com  +61 2 6566 1806

Cameron has for the past decade annually analysed, reported on and presented the financial and performance results from Australia’s leading Legal Benchmarking Survey, FMRC, at their large firm meeting. He has 15 years experience in law firm management at a senior level and as a consultant working with international and domestic law firms in Australia on financial strategic issues.

After the Goldman Sachs meltdown, the CEO, speaking to the U.S. Treasury Secretary: “I’ve never rooted so hard for a competitor (Morgan Stanley). If they go, we’re next!”

His first comment to me on this was: ‘predicting rain doesn’t count – building a financial ark does!’ He continued:

A 2007 study described Goldman Sachs as one of the truly great professional partnerships, “a global juggernaut with such strengths that it operates with almost no external constraints in virtually any financial market it chooses, on the terms it chooses, on the scale it chooses, when it chooses, and with the partners it chooses”.¹   

A year later its financial position was so dire its CEO speaking to the U.S. Treasury Secretary said “I’ve never rooted so hard for a competitor (Morgan Stanley), if they go, we’re next!” ²

Two decades of rising profits and few disasters have resulted in law firm balance sheets being a dull subject which is given limited attention by management and boards. This benign neglect of fundamental financial structures, when they are capable of generating infrequent but severe adverse consequences, is dangerous.

CAPITAL STRUCTURE MATTERS FOR LAW FIRMS

It doesn’t matter whether your firm is big or small, your capital structure matters. Undoubtedly, it is a subject of strategic import and it deserves serious attention on a regular and technically thorough basis. Make sure you get good advice and understand it.

Capital structure significantly affects risk and its management is an essential task for firm leaders.  The optimal capital structure constantly evolves and law firm leaders must constantly be briefed on, consider and report on at least these five factors:

1. the firm’s profitability;
2. legal industry dynamics;
3. the economy;
4. financial market conditions; and
5. Government regulation.

When these factors indicate rising business risk, even a previously conservative debt level may be too much for some firms.

Firms should determine if their business is more fragile or precarious than in the past and if the change is cyclical or structural.  For instance, if a deterioration is structural, should firms continue using a capital structure which was adopted when they were smaller and less complex operations?

The following factors suggest that there has generally been an erosion of the underlying strength and stability of many professional practice businesses:

1. challenging economic conditions;
2. rising competitive intensity;
3. revenue growth dependent on a war for market share;
4. reduced pricing power;
5. increasing lateral movements of partners and teams;
6. declining financial flexibility formerly provided by partners preparedness/ability to endure periods of diminished or no drawings; and
7. long run legal salary cost pressures.

THE EASIEST PERSON TO FOOL IS YOURSELF

Partners may take comfort from the substantial equity capital disclosed on their firm balance sheet.  However, looking beyond the raw numbers and the accounting treatment to the economic substance, equity subscribed by a partner financed by a 100% loan to the partner is clearly a highly leveraged proposition.

Searching analysis should recast the financial statement figures to reflect this leveraged position, as well as the reality of possible unrecorded future liabilities, such as retired partner payments and partner income guarantees.  Operating profit to interest ratios as well as debt ratios should be calculated, deducting realistic minimum partner salaries.

The time to take action is long before vulnerability rears its head. Steps such as building real equity on balance sheets via profit retention when incomes are rising and the pain is not as noticeable, make a lot of sense.  For instance, Australian firm data shows few firms elected during the long period of economic sunshine, to build equity originated liquidity to strengthen their defences for potential future contraction. It seems that most never thought it would happen.

MARGIN OF SAFETY

In July 2011 there was a high speed rail crash in Wenzhou China. In April, 2010, the Chairman of the Japan Central Railway pointed out that China was operating these trains at speeds twenty-five per cent faster than those permitted in Japan. “Pushing it that close to the limit is something we would absolutely never do, he said.” 3 The wisdom of building a culture whereby the firm operates well inside, rather than on the border of safe limits, is surely prudent in a business with high operating leverage.

Real equity capital and a strong balance sheet gives firms staying power in difficult conditions.  What worked well in the past does not always work for changed conditions in the future.  Management and boards should review how large a margin of safety their capital structure provides based around extreme rather than familiar, comfortable conditions.

If firms build a financial ark they need not be troubled about future conditions.  If they do not, they should expect no kindness from financiers if forced to restructure their debt in unfavourable conditions.  The folly lies in a firm allowing itself to get into such a position.

1. Charles D. Ellis, The Partnership – The Making of Goldman Sachs, (New York: The Penguin Press 2008), p xv
2. Henry M. Paulsen, Jr. , On the Brink (New York : Hachette Book Group 2010), p 264
3. Japan Rail Chief Hits at Beijing, Financial Times, April 10 2010

__________________________________________

Sean Larkan, Partner, Edge International

The latest edition of the Edge International Review 2012 – essential reading for all legal leaders and senior managers

The review is downloadable from www.edge.ai. Download your free copy now! Alternatively click on the article links below to go directly to something that takes your fancy.

Interesting items you will find in this edition include:

• Alternative growth structures (a new constellation of nonmerger options for expanding your firm) by Chris Bull
• International alliances (how they work, what they deliver and whether to join) by Nick Jarrett-Kerr
• Innovative associations (nonmerger models for extending law firms reach in India) by Bithika Anand
• Do you want Swiss with that? (Client perceptions of the trend towards global law firms) By Pamela Waldow and Douglas Richardson
• Why are you growing? (The imperatives, risks and hidden assumptions behind law firm growth strategies) by Jordan Furlong

And there is also a special section on the popular Swiss Verein structure:

• Enter the Swiss Verein (21st century global platform or just the latest fad?) By Nick Jarrett car and Ed Wesemann
• Harvesting the diamonds (cross selling in a multinational law firm) by Gerry Riskin
• Come together (creating a collaborative business development culture despite separate profit pools) by Michael J White
• Lead the way (leadership, guiding principles and brand strategy and a Swiss Verein) by Sean larkan

I take this opportunity of wishing all readers a wonderful festive, Christmas and holiday season and 2013, and thank you for your support, comments and sharing your insights and learnings during this first year of legal leaders blog. It has been a fun journey – I have learned much along the way and made many new friends and professional colleagues. I look forward very much to sharing thoughts and experiences next year!

Sean Larkan, Partner, Edge International

Leadership vs Management? In this guest post Lyda Hawes  reviews this age-old distinction. I always encourage managers to develop their leadership skills and leaders to exercise good management skills as and when that is required as part of their role – Sean

Comparing the difference between leaders and managers is a popular topic in the leadership blogosphere. In fact, if you do a Google search on “leader vs manager” you get over 30 million results. While I expect there are examples that extoll the virtues of managers buried somewhere in those 30 million sites (well, at least I am aware of one, the one I wrote almost a year ago, Managers are People Too), the general consensus is that leaders are where all the cool stuff like vision and strategy take place, and managers are often left to the less fun task of managing tasks. In the 1989 book, “On Becoming a Leader,” author Warren Bennis gave us these comparisons (cited from The Wall Street Journal):

• The manager administers; the leader innovates.
• The manager is a copy; the leader is an original.
• The manager maintains; the leader develops.
• The manager focuses on systems and structure; the leader focuses on people.
• The manager relies on control; the leader inspires trust.
• The manager has a short-range view; the leader has a long-range perspective.
• The manager asks how and when; the leader asks what and why.
• The manager has his or her eye always on the bottom line; the leader’s eye is on the horizon.
• The manager imitates; the leader originates.
• The manager accepts the status quo; the leader challenges it.
• The manager is the classic good soldier; the leader is his or her own person.
• The manager does things right; the leader does the right thing.

When I look at the list I ask myself why anyone would ever sign up to be a manager. What I find that most of these comparisons lack is a fundamental discussion of the difference between someone’s role based on their job title (Manager, Director, Executive Director) and the skills they need to perform that role successfully (leadership, organizational skills, vision). I believe what most of these leader vs manager comparisons are really trying to say is that many people in the manager role are failing to exhibit leadership skills. I’m not sure we should all aspire to be CEOs, but any of us has the opportunity to develop our leadership skills in whatever role we play in the organization.

I also think there is a real temptation to associate leadership traits only with those who have the appropriate title. Those of us who have climbed the corporate ladder a rung or two often forget that it was the skills we honed earlier in our careers that helped us make that climb in the first place.

It brings to mind an experience I had as a member of a leadership team. This team decided to do a SWOT analysis (examining our Strengths, Weaknesses, Opportunities, and Threats) for the organization. We worked hard and were well-pleased with our results. We decided to share the outcome with the larger team and get their feedback and input. I can’t speak for the other leadership team members, but I know I made the mistaken assumption that we might get a question or two, and perhaps even a new idea, but otherwise our efforts would essentially be rubber-stamped for their elegance and brilliance (clearly, a lesson in humility in the making…).

Instead, the larger group took our initial results and expanded them and improved on them by measurable leaps and bounds. It was an inspiring reminder that no one holds the keys to good ideas. The true leadership skill exhibited that day was the wisdom to invite our colleagues to exhibit their own leadership skills.

Would I rather be a manager or a leader?  That is the wrong question. The better question is how can I grow my own skills as a manager and leader to build an outstanding team of leaders and managers.

It is interesting how often strategic initiatives which are undertaken in the months  and years after hard fought and agreed written vision is settled, go off in various often unrelated directions. Sometimes strategic initiatives or major issues taking up senior leadership’s time and energy fall into this category. This is sometimes the rule rather than the exception. It is almost as if the written vision and strategy does not exist or matter. (Sean Larkan 2012)

This is so often the problem with vision and strategy in a firm. A huge amount of work gets invested in getting it done and signed off, but invariably it then gets relegated to the ‘dusty shelf’ category seldom again to see the light of day and certainly not to be the driving framework for all key activities and initiatives in future. What a pity. How unnecessary – an opportunity lost.

Why does this happen?  Probably due to one or more of the following . . . . 

1. the strategy simply gets forgotten;
2. its too much hassle to pull it out, read it again and make sure what is being done aligns with it;
3. what is being worked on is ‘so obviously important and urgent’, that it ‘must be done’ notwithstanding what might be in the strategy;
4. the latest version of the strategy wasn’t really finally signed off and agreed with the partners as that last meeting was postponed. . . . .
5. where is the latest strategy document anyway?

What steps should be taken to get maximum benefit out of both initiatives?

1. get out the written strategy, dust it off and read it!
2. make sure what is being done ties in with it. If it does not, suggest this as a stress-test of the strategy and update it;
3. if it was not done before, use the opportunity to summarise the strategy into a page or two so it will never again be an excuse not to pull it out and test some initiative against it;
4. announce the new initiative as being an outflow of the revised strategy – this gives the strategy standing in the firm and will make it more relevant when it is (hopefully) reviewed in a year’s time;

Leadership commitment to ethics is a primary factor in establishing an ethical culture in a trust-based organisation like a law firm. Leader behaviours effectively demonstrate to employees, colleagues and clients what will or won’t be tolerated. (Sean Larkan 2012).

The services and advice offered by the legal profession require a high level of client trust both as regards expertise and integrity. This exceeds the level of trust required in many other businesses, for example, in the retail industry where a customer’s interaction may only entail a transactional purchase.

A high level of trust is very advantageous for the success of a legal practice. Among other benefits, it deepens and strengthens relationships and fosters client loyalty. Given this correlation (between trust and success) it should follow that building and maintaining trust is imperative.

There are many ways in which a practice can generate client trust. It builds trust when the practitioner assigned to the matter has the necessary knowledge and experience, and when he/she acts with integrity, in accordance with the law, and in the best interest of the client.

Underpinning these factors, it is crucial to also have an ethical workplace culture to serve as a foundation to guide the business and the behaviours and decisions. While an ethical culture is not an absolute guarantee of high levels of trust, it is a non-negotiable pre-requisite.

Despite the clear importance of ethics and trust, the legal profession does not necessarily enjoy a great reputation globally. A Gallup poll in the US in late 2011 assessed perceptions of honesty and ethics in different professions. Nurses were considered the most honest and ethical, with a score of 84%. Lawyers only scored 19% – even bankers were viewed more favourably with a score of 25%.

Leadership’s commitment to ethics is a primary factor to create an ethical culture. Their behaviour effectively demonstrates to their employees, colleagues and clients what is and isn’t acceptable. Internally this shapes the company’s culture and reinforces or undermines the company’s values.

The goals and strategies the company’s leadership pursue are also relevant. When, for example, they promote profits above all else this can skew culture and affect the interests of clients. In the legal profession this is often manifest in the goal of maximising billable hours (yes, many firms and clients still use them!), which can be an area of particular ethical vulnerability.

Delivering on the targets set for billable hours is generally in employees’ best interests, earning them benefits such as recognition, promotion, salary increases or bonuses. This can easily lead to expanding the scope of work unnecessarily or, worse, to inflating billable hours. Although unethical, it can foster an ‘ends justifies the means’ view and sub-culture.

Leaders therefore need to consider what behaviours their business goals and measures are likely to encourage, and to avoid ill-conceived goals in an effort to avoid unintended consequences. In the case of billable hours, this means that billable hours cannot be the only criterion for evaluating someone’s performance or contribution to the practice.

A high level of transparency is a further factor that adds to an ethical culture. Since transparency is synonymous with openness and honesty and involves sharing all relevant information, it builds and maintains trust. (Note that sharing ‘relevant’ information accommodates the need for client confidentiality.)

Maintaining a high level of ethical awareness in the workplace, and regularly measuring and reporting on the practice’s ethical status all support the preservation of a high-trust, ethical culture.

The commitment which the pursuit of an ethical culture requires is more than met by the rewards. Apart for enjoying clients’ trust, it reduces the risk of ethical failure, fraud or corruption and the associated costs. More importantly, it should also create a source of competitive advantage, which is as relevant for the legal profession as other businesses.

Since many sources of competitive advantage are limited because of the ease and speed with which they can be copied, it places greater value on a unique source of competitive advantage. Workplace ethics offers such a source: it is not easy to copy, cannot be bought or sold, cannot be owned, but rather must be lived every day so that it becomes an inherent part of the culture.

When ethics and trust are so integral to the success of an industry – as is the case for the legal profession – the only question which remains is why they are not acting accordingly and visibly advocating and nurturing an ethical culture.

Cynthia Schoeman, based in South Africa, is managing director of Ethics Monitor, which provides support for the proactive management of workplace ethics. This includes the Ethics Monitor, a web-based ethics survey, which enables organizations to measure, monitor and report on their ethical status. (+27 11 447 7661; Mobile +27 82 821 372 cynthia@ethicsmonitor.co.za)