I’ve been re-reading Walter Isaacson’s biography of Steve Jobs. I know there are criticisms of the book, but Isaacson is a good writer/storyteller. I realized Jobs engineered a return of Apple to dominance by doing two things really well. He forced the organization to make decisions quickly without endless debate.Second, the organization was decentralized. There weren’t silos or profit centers. These attributes let Apple get ahead even though it made mistakes along the way.
Of course, Apple was able to do these things because Jobs forced the whole organization to work together for the good of the whole organization. He had a vision for the organization—to make high qualitative usable products—that he and Apple relentlessly adhered to.
I thought about these characteristics and how they play out in law firms as I listened to many of the Intapp conference presentations last week. Intapp describes itself as a connected firm management solution designed for partner led professional services firms. The conference title was Connect20, and one of the central themes was how law firms could use the data they have to make better decisions. A big chunk of time was spent talking about law firm silos. And how firms could manage themselves better if all the data in all the silos were collected and then analyzed
No doubt this is true. But given the obvious truth of this, why is it so hard to implement. Why are silos so hard to break down and collaboration among partners for the common good so hard to implement?
Law firms and lawyers have some peculiarities that cause many partners to not enthusiastically adopt the collaboration to break down silos. That prevents firms from using data effectively. To overcome this, law firm leaders must have a core driving vision that will enable partners to trust leadership more than be self-focused. Leadership has to show commitment to getting and servicing clients and eliminate all other agendas. The ones hidden and sometimes not so hidden. To succeed, especially in the future as data becomes more important, like Job’s Apple, every decision a law firm makes should be made using the mission of getting and serving clients as the lodestar.
What are these peculiarities? Ignoring the fact that most lawyers are at their core skeptical and fiercely independent, there are characteristics that leadership can be instrumental in overcoming.
Compensation decisions are a zero-sum game: award one partner higher compensation means other partners have to make less
One peculiarity is how profits are divided among partners. Most firms get to the end of the year, calculate profits—the proverbial pie- and then divide that up among partners in some fashion. This method means compensation decisions are a zero-sum game: awarding one partner higher compensation means other partners have to make less. Not a recipe for collaboration.
Second, in most firms, law partner compensation is still largely governed by origination credits. The partner who brings in (lands, nets, etc.) the client typically gets the lion share of the origination credits for that client. Whether it was by hard work or even luck. In many firms, the most significant factor governing your compensation is the amount of your origination credits. ( Yes, law firms often reward the person who brings in work–even if its by chance–more than ones who do work to keep the client or find the solution to the client’s problems.)
What does this mean? Many partners will fight like Tasmanian devils to not share or give up origination. In a zero-sum world, they view providing client or marketing information to their partners as a risk they will somehow lose or not get some of that origination credit. And any reduction in origination credit means you make less, and someone else may make more. So the partners create these information silos about what they are doing. Who they are courting. What their marketing plans are.
Yes, it’s conceptually accurate that a rising tide raises all ships, and by increasing the size of the pie, everyone can make more. And by sharing information, existing clients may send more business. New clients can be obtained, which theoretically would offset any loss in origination. But that’s a gamble, and lots of lawyers aren’t willing to take that chance. Plus, even if more business comes in, many origination partners view the increased business as an opportunity to feather their origination nest, not increase others’ numbers.
Add the fact that many partners view their only real insurance of maintaining their clients and compensation is their origination credit. Higher origination credits mean you can pack up and leave the firm for greener pastures if need be. It allows you to maintain your independence within the firm and get what you want. Many partners don’t want to risk losing some of the decision making about a client or making client and marketing decisions jointly.
And most law firms are today organized around practice groups. These practice groups often operate as profit centers. The practice group leader is evaluated on the group’s financial performance. Again, the more one partner gets, the less others get. This fact can turn practice group leadership into a competition with other practice groups. So there’s an incentive to keep information in the silo.
Leadership has to recognize that collaboration and cooperation can’t detract from the overall mission of getting and keeping good clients
Here’s where law firm leadership comes in. Leadership has to recognize that collaboration and cooperation can’t detract from the overall mission of getting and keeping good clients. That sometimes, client and marketing decisions made by committee can bog down efforts to get business. This is particularly the case if the others in on the decisions have agendas other than getting and serving business. Or simply don’t have good ideas.
Leadership that tries to enforce collaboration to make some partner numbers look better for whatever reason will fail. Leadership that fails to recognize that some partners are just better at getting business than others and need to be heard will alienate those who can best get business. Leadership that fails to insure that the function of practice group is to serve clients better and help lawyers be better at their craft will end up with dysfunctional practice groups and poor client service. Practice groups simply can’t stand in the way of nimble decentralized decision making.
Most of the time, collaboration works better for the collective good. But to make it work, leadership has to earn the trust of its partners. At its core, it must embrace the concept that the firm be driven solely by how to get and better serve business. It must make and enforce decisions that advance that mission and allow quick decision making where necessary. Which brings the best business development partners to the table on marketing efforts and lets them do their thing. That brings the best and right partners to the table to best serve the client. That harnesses the resources to solve the client’s problems. And rewards those best players.
By relentlessly focusing on the true missions-getting and servicing clients, leadership can knock down lawyer silos.