Leadership Needed -- In Good Times and Bad

by Joel A. Rose

During a period of prosperity, many law firms are financially successful despite the managerial abilities of the partners. However, during a recession, the fact that partners may be high-quality lawyers is not enough. Leadership and sound management practices are required to manage the firm’s resources, ensure adequate cash flow and develop and implement the marketing and planning processes.

Any partnership, no matter the size, needs leadership. Good law firm management cannot be achieved until all the partners agree to subordinate some independence to a managing partner, an executive committee or a management committee. The partners must strike a balance between their rights as owners and their responsibilities as members of the firm. They must relinquish some personal prerogatives to achieve the overall results that they would not be able to attain on their own.

In theory, all partners are created equal. By dint of partnership status, they are accorded the same rights and privileges. However, as many firms quickly discover, that is simply not the case in practice. Invariably, each of the partners has his or her own idea about how to perform their job and exercise their authority accordingly.

Members Must Be Willing

If a firm is to survive during a recession, its partners need to acknowledge the need for leadership. The designated leader, whether an individual or committee, will not succeed unless and until all attorneys in the firm recognize that the impetus for successful management is derived from the willingness of all firm members to be governed.

The partners must also recognize that managing a firm, either as the managing partner or a member of a committee, is as important and as difficult as performing client work.

In some firms, the leadership role is assumed easily and quite naturally either because the individual is a founding partner or because he or she controls a significant client base. In firms where the partners are relatively young and inexperienced, the process of natural selection, as it were, may be somewhat more difficult. In situations in which no partner surfaces as a natural leader, or no one wants the job, the firm must take aggressive action if it wishes to grow and satisfy the professional, economic and personal objectives of its members.

What Kind of Manager?

The firm must make some hard-and-fast decisions about the kind and type of leadership that is required and what the members are willing to live with.

Should the general partnership elect a managing partner? Should this individual be appointed by the management committee? Sometimes the size of the firm will preclude this particular dilemma. The small firm is in a position to establish a democratic form of governance that includes all the partners in a leadership role. Where that is not practical, the partners face a difficult choice and risk setting up two power centers if the general partnership elects both the management committee and the managing partner.

This will create great potential for dissension and divisiveness since the camp will inevitably follow its choice of leadership when given the opportunity to make the selection. To avoid this debacle, selection of the managing partner by the management committee may be a preferable course of action.

What kind of individual makes a good managing partner? Generally, lawyers are not recruited to a law firm on the basis of their interest or skills in management. And more often than not, they are not trained by the firm in those skills. Consequently, lawyer’s skill and interest in management vary greatly. As a result, the composition of any management committee will consist of attorneys who are good managers and those who are not.

This should not be viewed as an obstacle. For as relevant as these skills are when an attorney is being selected to serve on the management committee, they are not necessarily the only factors that should be considered. It may be equally as important, or perhaps more so, to provide equitable representation on the committee to all the different groups of lawyers that make up a law firm.

The Requisite Qualities

It would also well serve the firm to side-step the temptation to resolve the enigma of leadership by merely acknowledging some basics concerning the issue. The requisites for leadership are, in this day and age, well known:

• The leader must garner respect and support, be an excellent communicator and have clout and wield it when necessary. For practical reasons, it is usually difficult for a junior partner to be a successful managing partner. The managing partner must keep the objectives of the firm in proper perspective. The managing partner must be able to rise above self and understand that the good of the firm must come first.

• The managing partner must be able to make decisions and have them stick. The managing partner must want to manage the firm. Many partners want to have a great deal of say in firm operations, however, they stop short of following up on their advice or opinions with any sort of recognizable action. This kind of management by debate leads many a management committee down the blind alley of endless discussions and meetings. That is not the way to manage a law firm and it is not what most lawyers want to do in their professional lives.

• It generally can be agreed that both the members of the management committee and the managing partner, as lawyers, want to practice law. The amount of time available for management is limited and must be used wisely.

• While there are responsibilities that the committee and managing partner should fulfill, their principal role should be to make sure the important aspects of the firm’s operational activities are being managed. It does not mean that the committee or the managing partner should undertake any of those tasks alone unless specifically charged to do so.

• There are some management functions that should be performed by the management committee or by the managing partner and that normally should not be delegated. There are other tasks that may be performed by either the committee or the partner, but that may also be performed by the individual members of the management committee or other lawyers in the firm.

• Assigning the responsibility for various functions should depend on making certain that the managing partner and the committee are charged with those functions that require their specific talent, energy and interest. Where the responsibility for those other functions is placed should depend on the firm making certain that the management committee and the managing partner have time to perform the functions that only they can perform before they take on additional responsibilities.

Charting a Course

In assessing his or her role, the managing partner needs to realize that attorneys’ expectations regarding the practice of law may well be different from the expectations that attorneys held ten years ago. These expectations may have changed in regard to hours of work, specialization, income, risk, independence and ethics. Attorneys have a greater desire to know the reasons behind decisions and to participate in decision-making.

The managing partner has to consider how the generational backgrounds and financial expectations of the new crop of attorneys have changed, and how these changes may be reflected in their attitudes, needs and financial goals. Ultimately, these changes will be reflected in the firm’s culture, how it will be managed and partners’ expectations of other partners and associates.

In the final analysis, it is the work that binds and unifies the various components of the firm — that is, the attorneys. The prudent managing partner will recognize the need to chart a course that mediates between the requirements of the practice of law and the needs of those who perform the work.

©1999-2017 Joel A. Rose & Associates