Originally published in The Legal Intelligencer.
A bevy of new goals and objectives typically accompany the advent of a new year—or, in the case of 2020, a new decade. January (aka compensation season for most) spotlights last year’s accomplishments and, in turn, begs for—and typically requires—statements and business plans denoting what each individual partner and the firm overall plans to achieve in the coming year. Enthusiastic visions, expansion targets and growth strategies abound. Now, the time has come to shift into action, inevitably sparking one of the single most-voiced questions among law firm executives: how do we hold partners accountable?
In an era of “what’s in it for me,” leaders seeking to ensure the long-term well-being of the firm and its talent often find change initiatives especially challenging. Innovation, technology deployment, restructuring, collaborative business development and other important large-scale change efforts demand shifts in behavior and mindsets. They also require considerable investments of time and money. Few law firm compensation systems adequately accommodate rewarding these crucial shifts in behavior.
The good news, according to prominent research on strategy execution, is compensation, or motivators, generally, is just one of four facets to successful execution. Better still, it is the third most important factor, trailing decision rights and information flows, which each have a substantially greater impact on implementation success. Accountability and accomplishment of even the most audacious goals, thus, are within reach, even for those leaders reluctant to tackle the Sisyphean task of compensation restructuring.
This undertaking, though, is far from straightforward. Five attributes of law firms and lawyers, most at least somewhat unique to the profession, are especially taxing when it comes to holding lawyers accountable and achieving successful execution:
Partnership structure—Accountability is presupposed to be an element of the partnership structure—technically, partners are all owners in the outcome. Yet rarely does the ownership mentality extend equally across the entire group. Uneven contributions and little leeway to penalize underperformers presents a gap in a leader’s ability to administer accountability measures. This gap is especially prominent in consensus-driven cultures and hardest to manage in firms with fewer than 250 lawyers.
Dismantling the partnership structure is unlikely a viable option. Instead, leaders can focus on the firm’s cultural underpinnings and the way management handles difficult decisions. Though seldom simple, making the tough calls and acting alignment with core values ultimately strengthens overall confidence in the firm. In turn, this increased level of trust encourages engagement and support for positive transformation.
Autonomy—the very trait behind the oft-used vivid analogy of herding cats, autonomy is perhaps the most revered and frustrating characteristic of lawyers who, according to Dr. Larry Richards’ research register much higher in autonomy than an average person. The art of the exception and “opt-out” cultures has been the norm in law firms for decades, many of which have gone so far as to tolerate “bad behavior” (including harassment) to avoid loss or confrontation. Fortunately, the tides are turning in this regard.
Still, a lawyer’s natural tendency to value the freedom of independence often makes pursuit of a goal for the common good unappealing, if only because it goes against his intrinsic value system. The best way to combat this natural tendency is to involve as many lawyers as possible in the process of shifting direction. Though seemingly not the most expeditious way to launch a new idea, it is by far proven to be the most effective when translating a new idea into action.
Lack of vision—even firms that can get partners to move in the same direction face the ultimate question of defining the direction in which they’d like to head. Too few firms today invest time and energy in creating—and communicating—a vision for the future that resonates with their lawyers and professionals. Lofty goals of increasing profitability or growing to 1,000 lawyers lack the clarity to offer guidance when faced with day-to-day decisions about where to invest time and resources. If desired behaviors are unclear, holding one to them is nearly impossible.
Gone are the days of a five- or 10-year strategic plan. The fundamentals of strategic thinking today demand agility, core principles designed to support rapid fluctuations while simultaneously holding a steady course. While this combination sounds somewhat schizophrenic, it is the very premise behind why leading Fortune 1000 companies place such emphasis on culture, talent development and the cultivation of environments to enhance creativity and performance. It is these foundational elements, in alignment with a vision, which enable change and innovation.
Poor communication—a mentor once told me, “the moment you tire of repeating your message is the exact moment others are hearing it for the first time.” Unfortunately for time-pressed, intelligent lawyers, leaders willing and able to dedicate themselves to the repetition and varied approaches necessary to create resonant messages are rare. Rarer still are law firm communication flows that are open, equal opportunity and effective. Given that information flows are the single most vital element to successful strategy execution, it is easy to grasp how and why law firms struggle to implement.
The design and development of an internal communications plan to run alongside any major change initiative—new strategic direction, ambitious go-to-market plan, enhanced focus on profitability—is essential. Leadership voices must sound alongside diverse groups of empowered proponents to champion shifts in behavior and thinking, as well as to recognize and reward those who make efforts and inroads.
Culture—within law firms, collegiality is often confused with conflict avoidance, and consensus-building with action, even when the results are a watered-down version of the original intent. The accomplishment of major changes demands empowering people—not just lawyers—with decision-making authority. Furthermore, those with this authority must be able to hold others—including lawyers—accountable. In organizations that continue to maintain caste structures, where senior lawyers “outrank” senior professionals on a routine basis, decision rights—the second-most important ingredient to successful execution—break down.
C-suite leaders imbued with the authority and support to make and execute choices will enhance the overall environment of accountability. The sheer concept of business leaders who “work for all partners” is outdated and undermines law firms’ ability to accomplish true change with long-term impact.
To overcome these intermingled challenges demands a combination of approaches. Perhaps most important is the willingness of law firm leaders to engage in self-exploration—and what better time for such an endeavor as the launch of a new decade. Introspection of oneself, as well as reflection on the very fabric of the firm’s partnership and culture, can yield insights into which of the following recommendations will be most fruitful and suited to each firm’s unique situation.
Establish clearly defined expectations of partners—not just to become a partner but also to stay a partner.
Create clearly defined leadership roles—who is responsible for what decisions and in what realm.
Provide leadership training to those shepherding major change initiatives—deliver not only self-awareness assessments and basic leadership skills but also essential business concepts, including how to evaluate and apply data in decision-making, construct business plans and lead change.
Host constructive meetings—design interactions, prepare effective agendas, offer training in facilitation skills, establish standing agenda items tied to core objectives.
Adopt best practices for internal communication strategies—tap into internal marketing resources to build and support internal campaigns.
Define and disseminate a well-articulated vision.
Connect at the heart—emotional connection is an essential component to encourage others to embrace change.
Adapting to a changing legal world won’t be for everyone. An eventual downturn in the economy will inevitably test law firms of all sizes. Some will fail. Others, including those equipped with the tools to hold their partners accountable and drive much-needed change, will thrive. Start the new decade off right.