3 indicators that culture is ruining your profit potential.
It is our experience that law firms that need help most, are the hardest to help. That is one of the reasons why TGO Consulting focuses on the elite law firms in each country. Mid-tier law firms in general remain mid-tier for a reason. The culprit is predominantly the culture in the partner group. Based on our initial assessment of the partner group culture, we usually are able to tell after one meeting if we can help a firm to be more successful or not. I would go as far as saying that culture might me more important than legal skills.
Let me put one thing straight from the beginning: we are not ‘tree-huggers’. We do not do personality tests, we do not do teambuilding activities, we do not do ‘purpose’, mindfulness or 24-hour retreats. We are and remain business consultants that focus on our clients’ bottom line profitability. We see culture as a tool for better business results.
Now we have that out of the way, let’s look at some of the aspects of partner group culture that are strong indicators for a firm’s success, or the lack thereof:
Lack of Trust Typically partners become uneasy when we ask whether they would trust any of their fellow partners to go to their client without them being present. There might be various reasons why a partner would feel uncomfortable. Maybe they feel that some of the partners are not such great lawyers. Could be that some of the partners lack the social skills or are simply too nerdy and detailed and the client would not like this. It is not only negative reasons why a partner feels uneasy with a fellow partner visiting their client. Some fear that the client might like the other partner better and that future mandates would no longer be exclusively in their name.
Whatever the motivation behind it, in many law firms there is a lack of trust between the partners. This lack of trust is standing in the way of cooperating when developing new business. One of the characteristics of highly successful law firms is a high level of trust between the partners. Typically, the most successful firms have a rigorous vetting and selection process as it comes to appointing new equity partners. Partner promotions at these firms are not driven by opportunism and internal politics. Only those that rigorously meet all the criteria and are supported by all of the other partners, are promoted. The result being a high quality close knitted team where partners fully trust each other.
Lack of trust is commonly also the basic driver behind the traditional partner performance criteria focusing on personal revenue and personal hours. The emphasis on individual performance is fueled by the fear that maybe a partner could under-perform and become a ‘parasite’ living of the profits generated by other partners. No partnership would want to carry such ‘backpacks’. Lack of trust creates emphasis on monitoring performance as an individual.
Focus on detail and on the negative Would you say in general partner meetings at your firm focus more on the negative or on the positive? Being strategy consultants for law firms, we have witnessed many partner meetings at many different law firms. To our experience discussions during partner meetings tend to focus on the negative. Rather than discussing business opportunities, partners discuss things that are not good. Partner meetings are almost invariably inward focused, discussing internal issues rather than clients and market opportunities.
Professionally, lawyers are trained to focus on risks and weak spots. Spotting and avoiding mistakes are what a lawyer does on a daily basis. Qualities that make a good lawyer, become a hindrance when it comes to managing the firm. The focus on the negative and the sensibility for potential risks, heavily influence the dynamics during a partner meeting. On top of that often partner meetings are also very detailed, discussing topics that should be dealt with on an operational level, rather than the partner group. Too much detail and focus on the negative are standing in the way of developing opportunities, markets and clients.
No discussion when needed One would be inclined to think that lawyers are good debaters and that during partner meetings partners would liberally exchange and debate their opinions. Excellent results are only achieved after a good discussion and a free exchange of ideas and different points of view.
Reality is different. Lawyers that do not hesitate to fight for their clients’ interests can remain silent during a partner meeting, not speaking up even when they disagree. The strange thing is that partners do bring their professional risk avoidance and attention for detail to the meeting, but not their professional ability to have strong discussions.
Partnerships that lack the culture of having strong and opinionated discussions while still maintaining the good relationship, perform better than partnerships where only a handful of opinion leaders speaks up. If there is no culture of discussion and fiercely disagree in a constructive way, a culture of backroom politics and discussion behind people’s back will develop. Creating a toxic and/or lethargic climate in the partner group.
No need to be friends Lack of trust, focus on details and on the negative and the inability to have opinionated discussions are strong indicators that the culture in the partner group is frustrating further growth and development of the firm. In strong partnerships the partners do trust each other. Successful firms have partner meetings that do not focus on details, risks and things that can’t be done, but on markets opportunities and clients instead. Partners in successful firms do not fear each other. They speak up when they disagree. They can have strong arguments but remain solution driven and focused on the content of the matter.
To be a successful firm there is no need for partners to be friends. On the contrary, being friends tends to blur the relation. In strong partnerships partners have great self-confidence, trust each other and keep focused on the bigger picture and business opportunities. I urge you to now take a moment and asses where your partner group is today.