By: Harrison Barnes, Managing Director - BCG Attorney Search
A recent paper authored by Laura Empson of the Cass Business School, titled “Who’s in Charge? Exploring the Leadership Dynamics in Professional Service Firms,” took a refreshing look at some of the top law firms of the world and made some interesting observations.
Among the many observations made by Empson about law firm dynamics consisting of partners, a crucial observation is of the need of cooperation between the management partner of a firm and management professionals hired to help the law firm do business. In this relation, Empson observes, success of the law firm hinges upon the marriage of the social capital of the law firm's managing partner with the professional capital of the management professional. And the biggest law firms of the world show the presence of such a relationship.
A law firm structure that is already obsolete though refuses to die
Empson's in-depth research shows that the most successful law firms have restructured themselves "from a position where management is there to run the partnership for the benefit of existing partners … to a situation where management is running the business … as a business."
This is of course, readily apparent in today's big law firms in U.S., where increasingly law firms are being run on a corporate model of business rather than keep adhering to the traditional model of a law firm (where, traditionally, law firm partners have the final say on everything concerning the law firm, including in matters where they visibly lack knowledge and expertise).
Law firm structures that are already obsolete and finding it hard to adapt to changing economic scenario and client dynamics have some serious lack of synchronization of internal relationships with reality.
In obsolete structures, partners have the highest autonomy in taking decisions on management-related-issues pertaining to the individual partner - and at the same time support staff exude a "partner pleasing" agenda, trying to work themselves into the favor of individual partners to ensure their own survival.
This, Empson finds after doing survey of 21 leading international law firms, does not work. Nevertheless, the practice continues in most law firms who are still to make it to the 21st century.
Obsolete law firm structure is exemplified by Empson by quoting a management professional: "We had 300 partners, we had 300 marketing directors, we had 285 HR directors and we had 250 finance directors, and we had one IT director, because they [the partners] didn't understand IT so they left that alone."
In fact, Empson finds, in many of the most successful law firms, management has shifted to a situation where it is ruled by benign autocracy rather than full democracy with every partner asserting rights to learn about and have their say on every issue.
In obsolete law firm structures, non-lawyers are seen purely as operational managers who must do the biddings of partners to whom they report. The relationship is more akin to a master-servant relationship than a modern mutually empowering relationship created to serve business objectives of the law firm as a whole.
When knowledge professionals in specific fields or management professionals are brought into law firms they face huge difficulties in doing their work. Empson quotes one regarding a law firm which had an obsolete structure at the time, "…you want to perform to the best of your ability in these roles but you're prevented from doing so, in a way, by the structure that says - 'yes we want professional management in our firm but we want the right to veto what you suggest.'"
But, Empson's paper observes, the recent economic recession, brought many law firms to their senses and they rapidly overhauled their structures to make their internal dynamics fit reality. These law firms have continued to succeed through the recession and beyond, even though from the outside layoffs, and shedding of fat or optimization has been criticized as signs of weakness (deviation from traditional and glorified law firm structures that came into being hundreds of years ago).
In successful law firms, management partners and management professionals have succeeded in convincing partners to assume roles where they focus their energies fully on their own professions, and trust management professionals to do their jobs in consultation with the managing partners.
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