The choking effect of enlightened self-interest
Updated: Mar 25, 2021
Earlier this week I started to read an article in the American Lawyer with the heading ‘How a Firm's "Vision" Results in Real Growth’. As it turned out the title was just ‘clickbait’ and the article was written by two consultants trying to sell their services. Perhaps I should have known better by now. There is a number of consultants out there selling ‘mission- and vision statements’ as a silver bullet to get partners in a law firm aligned. In reality it doesn’t work like that at all.
Getting the partners aligned and to act in the common interest, is one of the hardest things to pull off in a law firm. Management will act under the fictitious assumption that what is best for the firm, will be best for the partners and vice versa. Not unlike national governments strive to act in the best interest of their country under the assumption that this will be what is best for its citizens. It turns out that for law firms the interests of the firm and the interest of the individual partner are frequently not aligned and this is exactly what is at the origin of lots of frustration.
The lone wolf
In the distant past all lawyers were sole practitioners. Later lawyers began to share a building and some resources, but they remained fundamentally sole practitioners. It is only in the past decades that the ‘corporate’ business model was widely adopted by business law firms around the world.
With the corporate business model the discrepancy between management and the partners started to become visible. Management set out to centrally manage, whilst the partners mentally remained vigorously independent. I have highlighted this inherent tension in a recent article that you will find here: Balancing control versus autonomy (tgo-consulting.com)
Partners can have a strong tendency to act as ‘lone wolfs’ as it comes to developing and maintaining their practice. This is partly rooted in history, but also a direct consequence of how in law firms partner performance is measured. Despite initiatives and incentives to get partners to cooperate, individualism mostly prevails. As this is clearly not in the interest of the firm as a whole, we will try to examine what drives such self-serving behavior.
The mobility and insurance aspect
It might sound counterintuitive, but partners in law firms frequently feel vulnerable and exposed. There is little security in partnership and it is quite common that partners deep down permanently fear being kicked out. One might be inclined to think that this as such is not necessarily a bad thing, as it will motivate the partners to work even harder in order to secure their position. As it turns out, more than motivating partners to go the extra mile, it drives them to individualism and selfish behavior. “As long as I have secured my position, I couldn’t care about the rest”
I would call this behavior out of self-insurance. This could lead to partners hoarding clients and files in their own name in situations where another partner would actually be more entitled or better suited. It leads to partners objecting to any change in the firm that might weaken their position. It is one of the driving motivations for partners to be either as invisible as possible or make a lot of noise. It is a reason to object to a new partner that could potentially become a competitor for work.
The possibility of being pushed out creates strong defense mechanisms that are working against the interests of the firm, but it is not only fear that creates this kind of reflexes. Opportunity is a second and powerful driver of selfish behavior. Today many partners want to retain the freedom to make a lateral move to another firm. Retaining the freedom to move is in a way also a form of insurance, but not a defensive one as described above. Partners know that they will only be able to move when they have a strong and portable book of business. Business that they should share as little as possible with other partners in their firm.
Partners that have a lingering thought that perhaps they want to make a lateral movement, will also be not willing to invest in their present firm and thus blocking investment proposals that might be necessary for the future development of that firm.
Retirement on the horizon
In many law firms, the partners that are roughly within 3 years of their retirement are a force to be reckoned with. Often the opinion leader and the rainmakers, fall within in this category. When retirement becomes visible at the horizon, a smooth succession is absolutely in the interest of the firm. Yet persuading partners to transfer their practice in a controlled an early manner proves to be extremely hard to do. This has everything to do with the self interest of the partner that is about to retire. As I have written about this before, I will not go into details in the context of this week’s article. You find a link here: Retirement: What if stars go out with a bang? (tgo-consulting.com)
Partners that are mentally preparing for retirement, are often found reluctant to approve investments that the firm has to make, as it will cost them cash right now and they will no longer be around when the investment starts to pay off. Again a well-known example where self-interest of partners is harmful for the firm as a whole.
We have already touched upon this when elaborating the ‘insurance aspect’, some partners purposely create weak offspring. They surround themselves with industrious associates that have a high tendency to serve, but at the same time have limited ambitions. These ‘work bees’ are a tremendous help for the partner as it comes to running his (her) practice, but they come with the peace of mind that when they eventually are made partner they will not out-shine and/or out-perform the partner. Work bees will always remain work bees, and for the partner there is safety in that. It goes without saying that for the firm as whole, this is not so great…
The chocking effect of enlightened self-interest
There is a limitation on how long this article can be before you will stop reading. There are many more examples of normal everyday situations in law firms all over the world where the self-interest of the partners is standing in the way of greatness and growth of the firm. The aim of this article is to help recognize and identify the situations in which this is happening. It also aims to raise the level of self-awareness as where your own behavior is concerned.
Serving self-interest is deeply rooted in our human DNA. The only way to mitigate its most harmful effects is to create a strong culture where the group is more important than the individual. As such this is part of the path to maturity for the legal industry. It is a necessary step on the way from sole-practitioner to institutionalized corporate organization. We would be happy to guide you on that journey.