Too many lawyers. More demanding Clients. Globalization Industry Consolidation. These are all factors redefining the legal industry. Re-Envisioning the Law Firm: How to Lead Change and Thrive in the Future (Re-Envisioning) a report developed by the Managing Partner Forum (MPF), Jaffe, and The Remsen Group released on December 8th offers insight into how law firms can do exactly that.
John Remsen, President and CEO of the Managing Partner Forum says, “The pace of change is unprecedented for the legal industry, and the pace will only accelerate into the future. Strong leadership and a solid game plan are required if your firm seeks to thrive and prosper in the years ahead.” Understanding that many law firms need to make big changes, and with the goal of offering insight to law firms looking to make those changes, the authors of Re-Envisioning analyzed data from two big surveys of Managing Partners to come up with recommendations.
How the data was collected and who participated in the surveys?
The first survey used in the Re-Envisioning report was the MPF Leadership & Governance Survey from April 2016 which asked over 145 managing partners anonymous online questions. The questions covered law firm leadership and governance, including whether or not the Managing Partner had a job description, how he or she would describe the governance model of the firm, and whether he or she were currently grooming a successor.[i]
The second source of data was live MPF Audience Polling Results. This survey was conducted in real time with the 80 plus Managing Partners who attended the MPF Leadership Conference in May of 2016. Using audience polling technology, participants were able to answer questions instantaneously and confidentiality on a variety of subjects, including “Compared to five years ago, what is the likelihood that your best lawyers may leave the firm?” and “Is your firm providing marketing and business development training for its junior partners and associates?” The data from the surveys, combined with interviews with innovative thought leaders and influential Managing Partners are also incorporated into the reports recommendations.[ii]
Why are the changes that have been impacting BigLaw now impacting MidLaw and SmallLaw?
The MPF Report goes into more detail, but just like the other industries the legal profession needs to work smarter, faces global competition and needs to respond to the demands of an evolving workforce. The factors that hit BigLaw over the head with a hammer a few years back are now industry-wide. Specifically:
Globalization – Technology is making the world smaller each day. Now even the smallest business law clients have international concerns.
Too Many Lawyers – Although the number of law school graduates has been dropping, technology is making law practice more efficient and older lawyers are putting off retirement. The U.S. currently has 1.3 million lawyers!
Smarter, Faster, Better – Clients want better service, more customized solutions and better value for their investment.
New Market Entrants – Technology!!!! Think LegalZoom, AVVO, Rocket Lawyer. More routine legal work is becoming commoditized.
Industry Consolidation – The Consolidation Curve -ask an MBA. Fragmented and siloed industries consolidate as they mature. Just like other industries, technology and economies of scale are breaking down the traditional legal market which encouraged highly regionalized and /or non collaborative legal practices. Law firm mergers and lateral movement is at an all-time high.
Workforce Changes – Baby Boomers hanging on. Gen x and Y and Millennials with differing career goals and work styles.
The recommendations in the report incorporate three main themes:
- The law firm must be run like a business (not more like a business, but like a business.)
- The Managing Partner must take ownership of leading the effort, and
- Firm owners must take responsibility for embracing, engaging, and implementing the necessary changes for operating like a business.
These themes are spread across seven areas detailed in the report; including:
- Leadership & Governance,
- Strategic Planning,
- Marketing and Business Development,
- Problematic Partners, Succession Planning,
- and Technology.
In upcoming segments we will discuss above seven areas of concern and the survey’s recommendations designed to help small and midsize law firm move into the future.
The idea of running a law firm like a business translates into re-evaluating the leadership structure of law firms. One of the first recommendations made in the report is to change the Managing Partner into a CEO in name and function, empowering him or her with the power to lead the organization without necessarily achieving consensus. The report observes, “While governing by democracy might theoretically sound appealing, especially because it spreads the blame should a strategy not succeed as planned, choosing to consensus build over decision-making delays and waters down change.” Consolidating leadership with a Managing Partner who functions more as a CEO is a step that will allow law firms to make changes in other areas much faster.
The survey also suggests strategies for working with “problematic partners,” defining the problem as partners who under perform or who exhibit bad behavior that reflects poorly on the firm–anger management issues, poor representation of the firm, rudeness and arrogance. Problematic partners can be an incredibly difficult issue to confront, especially when the issue is under performance, but the report offers suggestions and strategies for tackling these thorny issues.
Above all, the survey insists law firms must confront them. Louise Wells, Managing Partner of Morris, Manning & Mann, says, “The culture of your firm can be influenced by what it’s willing or not willing to tolerate. If you’re willing to put up with chronic under performance, you most certainly will get it, and that’s not good for a firm’s long-term success or its morale. Dealing with underperforming partners is incredibly difficult, yet so important, for a managing partner to address.”
That is just the beginning of some of the dynamic thinking presented in Re-Envisioning the Law Firm. In the coming weeks a NLR series will preview additional insights offered in the survey from other areas of law firm leadership.
[i] The breakdown of the number of lawyers per firm as well as the job title of survey respondents of the first survey are illustrated below:
[ii] You can see a breakdown of the number of lawyers at the respondent’s firm and the number of years in the position below: