Dealing With the "Leadership Vacuum" in Law Firm Management

by Joel A. Rose
 

     Every law firm, regardless of size, needs leadership. Good law firm management cannot be achieved until all the partners agree to subordinate some degree of independence to a managing partner or an executive managing committee. The partners must strike a balance between their rights as owners and their responsibilities as citizens of the firm. They must relinquish some personal prerogatives in order 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. As many firms discover, though, this is not the case in practice. Invariably, each partner has his or her own idea about how to perform the job, and partners exercise their authority accordingly.

     If the firm is to establish a form of governace that will satisfy all of its members, the attorneys must first acknowledge the need for leadership. The designated leader, whether an individual or a management or executive committee, will not succeed 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 just as important and as difficult as performing client work.

     In some firms, the leadership role is assumed easily and naturally, because the individual is either a founding partner or controls a significant client base. In firms in which the partners are relatively young and inexperienced, the process of "natural selection," as it were, may be somewhat more difficult, if not virtually impossible. 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.

Hard Decisions Needed

     In any case, the firm must make some hard decisions about the kind of leadership that is required and what the members of 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 dilemma. The smaller firm is in a position to establish a democratic form of governance that includes all the partners in a leadership role. If this is not practical, the partners face a difficult choice. They 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. To avoid this debacle, selection of the managing partner by the management committee is the preferable course of action.

     What kind of person makes a good managing partner? Generally, lawyers are not recruited to a law firm on the basis of their interest or skills in management. They are rarely trained by the firm in management skills. Consequently, lawyers' skills and levels of interest in management are greatly varied.

     Any management committee will include some attorneys who are good managers and some who are not. This should not be viewed as an obstacle. Management skills are not necessarily the only factors that qualify an attorney to serve on a management committee. It may be equally important to provide equitable representation on the committee to each of the groups of lawyers that constitute the law firm.

     The requisites for leadership are, in this day and age, well known. The leader must garner respect and support, have clout and wield it when necessary. The leader's skills must combine judgment, timing and vision.

     The managing partner must keep the objectives of the firm in proper perspective. The managing partner must be able to rise above the "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. Perhaps most important, the managing partner must want to manage the firm.

     Many partner want a great deal of "say"in firm operations, but stop short of following up on their advice or opinions with recognizable action. Such "management by debate" leads many management committees down a blind alley of endless discussions and meetings. It can be generally agreed that the members of the management committee and the managing partner, as lawyers, want primarily to practice law. The amount of time available for management is limited and must be used wisely.

     Collaboration is the best way to generate ideas and options for managing the firm. In the most successful firms, much gets done by teams of partners pulling together. The firm, not the leader, becomes the star; the leader serves primarily as the one who articulates the firm's goals and plans for accomplishing its objectives.

     There are some management functions, however, that should be performed by the management committee or the managing partner and should not be delegated. There are other tasks that may be performed by either the committee or the partner, but also may be performed by individual members of the management committee or other lawyers in the firm. The managing partner and the committee should be charged with those functions that require their specific talents and energy. In placing responsibility for other tasks, it is important to make certain that the management committee and the managing partner have the time to perform the functions that only they can perform.

Management Checklists

The following are some of the functions that the management committee should perform:

  1. Monitoring the firm's economic performance.

  2. Providing long-range planning and direction.

  3. Making certain that systems are established and individuals are responsible for all the areas of the firm's management.

  4. Making major decisions and recommendations to the firm in such areas as lawyer compensation, billing rates, opening of additional offices and entering new areas of specialization.

  5. Communicating with the firm as a whole, so that the management committee has the benefit of the views of other lawyers and so that the other lawyers understand the decisions and programs that the management committee adopts.

The following are some of the functions that the managing partner should perform:

  1. Maintaining the morale of the lawyers, as a group and individually.

  2. Anticipating management needs and making recommendations for fulfilling them.

  3. Supervising the administrator.

  4. Making decisions concerning matters that do not warrant consideration by the management committee, such as implementation of personnel policy.

  5. Implementing the management committee's decisions by informing the proper attorneys and by following up to see that the decisions have been implemented.

  6. Coordinating all management activities.

     Responsibility for the following functions may overlap, in that they can be performed by the managing partner, a member of the management committee or another lawyer:

  1. Overseeing the firm's financial matters and reporting system, including preparation and monitoring of budgets, billing, collection, cash flow, analysis of management reporting for time and money and recommendations on investment of excess funds.

  2. Overseeing lawyers' career development, including evaluation, training and general work assignments.

  3. Overseeing legal assistants' career development, including evaluation, training and work assignments.

  4. Investigating, evaluating and making recommendations to the management committee on special projects, such as acquiring senior lawyers, opening additional offices and specialization in new areas.

  5. Overseeing firm facilities, particularly expansion or remodeling.

     The following are suggested questions that a managing partner may use as a guide in determining whether his or her management practices and style of leadership effectively serve the firm.

Communication:

  1. Are the firm's methods of internal communication functioning well?

  2. Do all of the attorneys attend meetings, dinners or luncheons? Are they invited?

  3. Does the firm use announcements or newsletters? Are the attorneys invited to contribute to committee reports?

  4. Does the firm hold retreats to disseminate information or address special topics?

  5. Does the firm provide the attorneys, particularly junior partners and associates, with adequate feedback?

Firm Policies:

  1. Does the firm have an established policy concerning new clients?

  2. Are the criteria for accepting or rejecting clients known to all the attorneys?

  3. Does the firm have established criteria for hiring?

  4. Does the firm conduct attorney evaluations on a regular basis? Are the evaluation criteria meaningful? Are attorneys informed of the results?

  5. Are the criteria for becoming a partner or a member of the executive committee known? Are they reviewed on a periodic basis?

  6. Has the firm established policies regarding nonbillable activities, such as pro bono work, client relations, community activity and firm administration?

  7. Are the attorneys fully informed concerning the firm's billing policies?

  8. Do the attorneys know the hourly rates of partners and associates, and the policy concerning expenses?

  9. Have the attorneys been informed about the income-distribution structure for partners and associates?

Organization:

  1. How are the departments organized? Are the areas of practice adequately staffed and supervised?

  2. Are the attorneys aware of the functions of various committees?

  3. Do any of the younger attorneys serve on committees? Does representation on committees reflect all firm matters?

  4. How is committee membership determined? Who serves on the committees? How are they selected? What is their tenure?

  5. Does the administrative staff support the attorneys' needs and requirements?

  6. Is the firm's equipment and office technology up-to-date?

Decision-Making:

  1. Do the attorneys participate in decision-making?

  2. Are the attorneys involved in the billing process, particularly the individuals responsible for the client and for performing work on client matters?

  3. Are the attorneys' views and input encouraged?

  4. Are the attorneys informed about events and planning regarding the number of associates or paralegals to be hired? About department expansion or contraction? About major new matters?

     In assessing his or her function, the managing partner should 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 might consider how the social, educational and economic backgrounds of the new crop of attorneys have changed, and how these changes may be reflected in their attitudes, needs and expectations. Ultimately, these changes will be reflected in the firm's recruiting activities, turnover, work product and fields of specialization.

     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.

©1999-2014 Joel A. Rose & Associates