You are wasting your time!
Updated: Jan 29, 2021
Over the past few weeks I have had several conversations with a law firm that got it into their head that they need to merge. The situation is that in Q4 of 2020, as a consequence of an internal power struggle, the firm has lost almost its entire Banking & Finance capability. Obviously the decision of the team (partners + associates) to set up camp elsewhere, had a history in the making. For months there had been internal discussions, but without avail. Once the team had decided to leave, a new internal discussion started on how to fill the sudden Banking & Finance void. At this point in time, a merger with a smaller boutique, was thought to be the solution.
My point this week is not this particular situation, as it is specific for this firm. No, what I would like to highlight is the incredible amount of energy wasted on internal discussions that did not bring any new business, or helped improve the market position of the firm. On the contrary, I would say: focusing inward, rather than outward left the firm weaker than it was before.
Keen to focus on internal issues
If you would take a step back and look at it, it is actually quite surprising that law firm partners spend so much time discussing internal issues. As partners experience permanent pressure to perform and grow their book of business, one would expect this to be the number one topic on their agenda, but it isn’t. Ninety-nine percent of the time clients and business are not on the agenda at all. So, let’s explore why partners rather talk about internal issues, than about the clients that bring them commercial success.
The ownership syndrome
At the vast majority of law firms, the partners are technically the owners. For many, that actually translates to behaving like a business owner and wanting to be involved in all the decisions. In the past this would go as far as partners wanting to have a voice in what printers to buy, and what brand of coffee to select. Although this level of detailed involvement has fortunately become the exception, most partners still want to have an active say in the day-to-day management of their firm. Needless to highlight that most of the time this does not make sense. Being lawyers, partners are by no means experts on printers or the professional market for coffee.
Focused on details and potential risks
By nature of their profession, lawyers are the masters of spotting – potential – risks. As often there are risks in the details, there is also a strong focus on details. Overarching this, is the concept of perfection and doing it right the first time around. All these great qualities make perfect sense in the day-to-day practice of a lawyer. Missing a tiny detail could eventually mean a lot of trouble or losing the case. Being focused on details and micromanagement day-in day-out, it becomes difficult to put that attitude aside when it comes to managing the firm. That is why often in partner meetings discussions have a level of detail that will not be found in the boardroom of any company.
Practice is a most individual thing
In any regular company, the clients are the client of the company and not of an individual employee. Sure, I have a personal account manager at my bank, but in the end I am the client of the bank and the account manager is replaceable. I would say that even for my accountant that is the case. I like my accountant a lot and we have a great relationship, but if one day he decides to leave, I will most likely stick with the firm.
For lawyers this is different. Mostly clients are the client of an individual partner, rather than a client of the firm. This is also how the relationship works in the mind of the partner. The partner feels a strong personal responsibility and therefore no inclination to discuss this with the other partners.
Outside the comfort zone
Becoming a partner in a law firm comes to a certain degree with parting with doubt. Having the final responsibility representing the client in a matter, requires confidence and a steady hand. Partners work under professional conditions that vis-à-vis the client, the opposing party or the court, leave very little room for doubt. As a consequence and as a sort of ‘defense mechanism’ partners tend to avoid situations where they are not certain. Clients and Business Development are among those topics. In general it is hard to have an open, honest and meaningful discussion with a group of partners on how to grow the business. The topic is out of the comfort zone and it comes too close to the individual performance of the partners. Potentially highlighting differences in reputation and commercial success. Therefore partners tend to avoid going there.
You should really change the conversation topics
From time to time, I ask law firms what percentage of partner meetings time is spent on clients and markets versus time spent on internal issues. Unsurprisingly 99% of the time in partner meetings is spent on the latter. After reading the article, I hope you would agree that this practice is valuable time being not well spent. Discussing internal matters does nothing for improving the reputation and the financial success of the firm. Having partners decide on the printers will not lead to better business (or even better printers).
Like in the example in the intro, internal issues can be huge drains of energy without any meaningful material returns. It is time to start focusing the energy outward instead of inward. Time to start discussing market opportunities, instead of the flowers on the reception desk. Smart companies are rigorously focused on long term commercial success and their internal discussions reflect that. It is time for law firms to do the same, and focus on market opportunities and exchange information and insights on clients, best practices and rumors from the grape vine. Adopting this practice is guaranteed to make you money.
Hopefully, if I would ask you in one year's time, you would say that you spend at least 80% of the time discussing market opportunities.