From a sociological perspective, law firms are very different from any other business*. On the one hand there is within a law firm the clear distinction between fee-earners and staff (the non-fee-earners). Despite the fact that both categories are part of the same organization, they form two distinct separate classes: an upper-class (fee-earners) and a middle-class (staff). These two classes do not mix well. Even a non-lawyer, CEO or COO will as it comes to it, in the end be seen as part of ‘middle-class’.
Typically, when a corporate event such as a skiing trip is organized, it is only for the fee-earners (upper-class). For staff there are often no such perks. The other relevant distinction is between equity-partners and the rest.
This type of social ‘class system’ found in law firms is quite unique and is not found in other businesses. In any ‘normal’ type of business, all employees would be seen as equally important. In my early days I have worked in retail and certainly the sales team is not more important than the buying department, logistics, real-estate management, or any other function. Each employee has its own role and contribution, and everyone felt an equally important part of the same organization. This holds true for all forms of businesses. It also holds true for in-house legal departments: regardless, the job title or role, everyone is part of the same team. No ‘upper-class’ and ‘lower-class’.
In ‘normal businesses’ there is also no equivalent for equity-partners. Yes, some business is family owned. Some other businesses have founders and large shareholders among the workforce, but these ‘owners’ tend to all work for the same common business goal. What makes law firms unique is that each equity-partner works primarily for his/her own benefit, rather than for the benefit of the firm. What further makes law firms unique is that equity-partners form a special ‘upper-upper-class’ that lives and operates different from ‘normal’ company management (or large shareholders). Sociologically law firms are a species sui generis.
For the purpose of this article we will concentrate on the equity-partners. If we can change equity-partners, we can change the firm. There are clear distinctions between the most talented and experienced non-equity lawyers and those who made it equity partner. Once you are promoted equity-partner you not only become part of a ‘the club’ also another form of transformation takes place at the same time. In the first week of May 2019 we have witnessed the inauguration of the Emperor of Japan and the King of Thailand. Both gentlemen underwent a transformation similar to a lawyer who is made partner. The day before the coronation both Naruhito and Vajiralongkorn were humans and now, they are considered sort of ‘divine’ and infallible. Becoming equity-partner is not dissimilar. The one day you can still ‘be wrong’, the other day you are supposed to know everything and supposed to always be right. Equity-partners are supposed to be (and sometimes see themselves as) Super Heroes and act accordingly.
All these sociological quirks are part of reality but not per se in the future interest of the firm. Data suggests that law firm business results will be better if there is more equality and teamwork. Not only between lawyers and staff, but also between equity-partners and lawyers and among equity-partners. So, in order to improve business results, we might need a different type of equity-partners: humans, not super-heroes.
Let’s look at the 6 most important criteria to look for when appointing a new equity-partner.
Creativity The reason that I do not mention legal skills, is that this should be a given. Any lawyer lacking the required legal skills should have been dismissed long before the partner nomination procedure starts. All remaining senior lawyers should have legal skills equal to the equity-partners. The first and most important criterion is therefor ‘creativity’. The ability to find new and effective legal solutions. The verbal creativity to convince people and let them see the world your way. The creativity needed to find an alternative approach or solution if needed. The analytical creativity to spot when things that seems logical and factual, are actually fraud. As the legal industry will move towards value-based billing, it will need lawyers that can deliver this value. Value will be in ‘creation’ and not in ‘production’ as it is today.
Practice Development The second most important skill to look for is the ability to bring in new business. Equity-partners have the responsibility to bring in new business. A great lawyer that does not possess the ability, the ambition and the skill to bring in the right clients and the right matters, should never be made equity-partner.
Practice Management This one is sort of obvious, but often overlooked. Being an equity-partner means that you have to be able to plan ahead in a structured manner. The times that a partner could leave requests lingering on the desk only to remember and panic the last minute are well behind us. Both associates and clients do not want to receive stuff five minutes before a deadline expires. Tomorrow’s equity-partners must have the ability to seamlessly work with project-management professionals.
People Skills / Emotional Intelligence Being an equity partner requires well above average people skills. Without the right people skills, it will be very hard to attract the right clients. Without adequate people skills it will be impossible to manage and keep a good functioning team of associates. Gone are the days that partners were allowed to shout at associates (or anyone else for that matter). The new generations of Millennials and Gen-Z simply are not willing to work with bullies. They certainly don’t mind working hard, but they want to be taken seriously and treated with normal respect. Emotional intelligence is absolutely required to work with today’s sophisticated clients. Lawyers that are not able to understand the client’s social and emotional motives and drivers, will not be able to deliver the value that clients are looking for. Autistic partner behavior is a thing of the past.
Presence / Confidence An equity-partner must have the ability to represent the client when the stakes are high. This will only be possible if the partner has a good (and relaxed) self-confidence. Partners must have the ability to handle really complex and tense social situations. Explain and defend their client’s position in person (in writing is much easier) even if the other party is much more powerful and holding better cards. Partners must ooze confidence and have a presence in the room.
Integrity The 6th and last of the criteria would be integrity. These days we have seen far too many examples of lawyers who got involved in shady business on behalf of their clients. We have seen lawyers accused and found guilty in #metoo situations. We have witnessed lawyers over-billing their clients, partners covering up mistakes by other partners, partners favoring friends, and so on. One could say that is goes without saying that integrity for partners is paramount. Unfortunately, reality shows that it is not.
We are aware that in law firms partner promotions tend to be sort of revenue focused and opportunistic and that in many firms there is at present no structural approach that would include all of these 6 criteria. We are convinced that, given what the legal profession will look like in the near future, law firms should start applying different criteria and raise the bar substantially as is comes to new equity-partner promotions. Having said that, we do not believe in Super Heroes and we do not believe in a class society. On the contrary. Tomorrow’s partners need to be able to collaborate and work in teams and will need to be more human than ever. Only real humans can relate to other humans. In the end the legal profession is very much about humans, their interactions and their emotions.
* the 'class system' has been overemphasized for discussion purposes