The life of a leader of a modern day law firm is full of variation, challenges and finding time to do everything. One of the toughest things for leaders to keep up with is attending to the small items – tracking and following up on actionable emails and other electronic or computer-generated items – those important, single emails you know you have to respond to or follow-up in some way but which are not attached to a particular project. Or it may be an important article you must track or send to someone else.  Leave these for only a day or two, or a weekend, and it quickly becomes very difficult to remember them.

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.
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Many of us who were lucky enough to be part of successful law firms of 20 years or so ago will recall how, in each of those firms, a couple of partners stood out for having impeccable client development and relationship skills. At the time we probably  assumed it was just the way things were done. There’s something in that, but in fact we were witnessing and experiencing a combination of terrific talent, something of an art form, at work, combined with hard work, commitment, genuine interest in others (mainly clients) ahead of own interests, keeping in touch, remembering important occasions, sending them snippets of useful information, and so on. This was old style business and client relationship development at its best; quite an art. The question is; is this a dying art?

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?
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In the April edition of Edge International Communiqué three of my partners address important issues and provide insights and outline opportunities for the legal profession:

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

The Gouldian Finch, research conducted at Macquarie University in late 2012 has shown, uses just one eye and one side of its brain to choose its partner for life. In the study published in Biology Letters the researchers found that ‘Beauty, therefore, is in the right eye of the beholder for these songbirds, providing, to our knowledge, the first demonstration of visual mate choice lateralization‘. Black-headed males choose black-headed females, and used only their right eyes and left side of their brains to do this.

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;
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Law firms seldom pay much attention to their capital structures. This has certainly been the case traditionally. Management of this important area was and still is often delegated to ‘the partner who seems to have the best handle on the financial stuff‘, sometimes the banking partner as he or she works with financial institutions! Given recent experiences via Dewey & le Boeuf and Goldman Sachs this seems like a risky option. Instead, very careful strategic financial advice and planning is required.  Far more attention should be given to the strength of firm balance sheets than they received in the past. I asked Cameron Taylor to join Legal Leaders Blog as a guest on this important subject.

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.


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Alternative growth structures such as Swiss Vereins, global alliances, non-merger affiliations, expansion strategies and a great deal more is covered in the latest edition of the Edge International Review. It provides essential insights for legal leaders – in fact, just what legal leaders need to know about!

The latest edition

Lyda Hawes is the Director of Client Services at LexBlog, the company that developed this blog. From time to time she and I have discussed the topic of management and leadership and I asked her to share her thoughts in this guest post. She also writes for LexBlog’s Client Services blog, Please Advise. Apart from this, as all who deal with her will confirm, she is one of those special people you get to deal with in the business world from time to time – Sean

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.
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Again and again I come across senior law firm executives who are frantically busy with or concerned about their latest ‘big thing’ but who on enquiry struggle to relate this to the firm’s vision and strategy. Sometimes the latest item getting all the attention has arisen as a few other key competitor firms are doing

While ethics is – or should be – important in all businesses, it is especially relevant for businesses that are trust-based, such as legal practices. Cynthia Schoeman of Ethics Monitor joins us as a guest today to provide her expert views on this important subject.

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.
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Salaried partners as a proportion of total partners in law firms are on the increase. However, there are good, bad and not such good things about many implementations of the salaried partnership regime in firms. It makes real sense to ensure that your salaried partner structure is working in the best way possible. This means putting it together well and managing it well with constant reviews and stress-testing along the way.

This increased use of salaried partners was one of the clear findings of the 2012 Edge International compensation system survey of leading firms in the US, Canada, UK, Europe and Australia. This is a world-wide trend and is a reversal of the position of only a few years back when it seemed the appointment of salaried partners was on the decline.

Putting together an optimal salaried or fixed share partnership regime can be one of the wisest moves that law firm leadership ever undertakes – it can result in countless benefits – providing for succession and the long term health of the firm, a happy and hugely productive group of salaried partners and properly managed, very profitable and satisfactory for the equity partner group. (Sean Larkan 2012)

I wrote an article on this subject in the ALMJ (Australian Law Management Journal) which is available for download as a PDF.  A precis of some of the key points follows:

I am a strong believer in appointing salaried partners and believe that properly structured and managed this structure and system has the potential for many benefits for all concerned. To name a few:

  1. it is a good way to show appreciation and recognition;
  2. it is a good testing ground before equity partnership;
  3. it is a confidence builder;
  4. salaried partners have the opportunity to find their feet and understand the partner culture;
  5. it provides status;
  6. it can be an ideal alternative to equity partnership for some;
  7. it is ideal for some who may never meet the criteria for equity;
  8. it can help out with tough decisions where realistically it may be “impossible” to appoint equity partners;
  9. it can provide a realistic buffer to poaching firms; and
  10. sometimes it is a counter to lawyers leaving for greener pastures.
Having said this, I have consulted to a number of firms where we came to the view that the salaried partner system within the firms had either not been implemented properly or was not being managed satisfactorily. The result was that the salaried partner group was so disenchanted and it had, quite unintentionally for all concerned, become the enemy within the camp.
This situation can arise when:
  1. salaried partnership is used simply as a blockage to equity;
  2. salaried partnership is used to “park” under-performing partners;
  3. they are not treated with respect or provided with opportunities in regard to communication, consultation, listening, sharing of information, access to clients and so on;
  4. salaried partners are partners in name only or as glorified employees (it is not unusual to hear equity partners call them just this);
  5. they come to be viewed as nothing but a “necessary evil” (believe it or not this does happen!);
  6. salaried partners have not had conveyed to them the true nature of the regime in the firm;

Some outcomes of this are:


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