Member Article

The intention of this brief note is to present an analysis of internal crises within law firms and the way of avoiding them. We define a crisis as an unexpected and grave difficulty or danger (“a time of intense difficulty or danger”).

As a matter of fact the greek origin of crisis (“krisis”) meant “decision” (from “krinein” – decide). A crisis situation is that situation where decisions have to be made and when we refer to decisions we also imply change.

This note will only refer to law firm’s internal crises.  External crises are those which basically are beyond our control although they have an impact in the law firm (political, natural disasters, economic, changes in the rules/laws, etc). The internal crises are those which are associated with the firm, its leadership, culture, values, vision. For example loss of important clients, loss of relevant partners or teams, substantial reduction in billing income, severe tension between partner/management and other partners (rainmakers, prima donas, team leaders), quality of work deteriorating, etc.

What are the causes?

There is no right answer to this general question. However, most internal crises have several characteristics in common which law firms must bear in mind.

They never occur suddenly

The first fact which must be understood by partnerships is that these internal crises never occur suddenly, they are conceived slowly and for long periods. They may appear as surprising but that only confirms that those entrusted with leading the firm may have not noticed or paid attention to the symptoms. So it may be sudden or even not anticipated only to the firms’ leadership. Probably the rank and file are not so surprised, they could probably say that they knew it would happen.

They are almost always management / leadership caused

Usually, something relevant has not been working well in the firm for quite some time. Leadership has made or tolerated wrong decisions probably over a long period, and the partnership has taken no corrective action.

Most probably a lack of, or weakness in, leadership

Leadership has to spot weaknesses very early and have a clear vision of where it wants the firm to go. Real leadership means that those leading the firm are respected, generate trust, arbitrate conflicts and their vision is sound and shared by the firm.

I have come to believe that when firms separate too much the role of management (a Managing Partner) from that of leading the firm (CEO, Senior Partner, Executive Committee, who set strategy and vision), they are splitting roles that naturally should be very much more integrated. And it is not a question of names. The governance structure is relevant. What I mean is that the real CEO of the firm must manage – the same as in any corporation. Law firms sometimes lack the real role of a CEO since part of such roles is taken by the Managing Partner which has a different profile and power, and may not be seen as a leader.

Lawyers do not excel in management, let alone managing people

Behind most internal crises there is a people issue.

Lawyers are not the best at managing, and less so at managing people. If you add the complexity of managing peers and prima donas, the problem gets magnified. Lawyers are not good at managing because they were trained to be lawyers.  The management/leadership skills also need to be developed and most of all valued within a firm. Furthermore, the more you lead, the more you turn into the manager/producer dilemma, being a practising lawyer and the manager/leader at the same time.

This only tells us that we have to put more emphasis and effort in developing the skills to achieve good people management.

I like to quote David Maister at this: “One of the tragedies of professional life is that throughout our schooling  we are taught to focus on the logical, the rational and the analytical. This orientation continues through the many years of our apprenticeship when we are usually junior members of project teams, responsible for analytical work.  The message we receive is:  “Keep your head down, get it right, do it fast, and don’t mess up”. Nowhere along the way does anyone emphasize the importance of social, interpersonal, and emotional skills in determining our success in professional life. Then the day arrives when we make a terrifying discovery:  The world is filled with people: clients, colleagues, subordinates and superiors.  And that dealing with them draws upon attitudes and skills that no one ever taught us.  The fact that many of us come to the realization late in our careers that these skills are important is a reason to try harder to acquire them, not an excuse to abandon all efforts”. (David Maister).

Symptoms of an internal crisis

Try asking yourself or your partners or your professionals these four questions.  Anything less than a clear YES on each of them is an indication that leadership is needed to settle doubts, to change, to take action.

1) Do your people feel they have a career?

Your firm must offer its professionals’ fair chances of moving forward; a clear, structured, path. It may even not be, in some cases, a path to partnership, but even those alternative situations and options should be clear to all.

2) Do your people feel your firm is a nice place to work?

Whatever yours values, or your style as a firm, there is a life balance needed in any firm, for any given group of people. If your people do not enjoy coming everyday to work, your main asset may not come to the office tomorrow.

3) Do your people feel they are treated fairly?

There have to be clear rules, fair evaluations and consistency.  If so, then people will trust the firm’s leadership.  People may disagree with decisions but they are prepared to respect consistency and fairness. Arbitrary decisions and pure impulsive, reactive leadership may be very damaging.

Without trust and respect you can only lead by force and that is a tremendous disrespect to your professionals and ultimately to your clients, whose matters you will trust to such professionals.

4)  Does your firm offer consistent excellent service?

Without consistent excellent service you may cruise for a time, but not for long.

If ever some of your key clients reach the conclusion that your services do not excel or that they are not consistently excellent in all areas, there is probably no turning back. Normally this can only happen if you do not “listen” to your clients, and there are a number of ways of reading your clients’ feelings about your services.

Only the best professionals in both legal and human relations skills can do the job. Trust and empathy are not based exclusively in legal skills. These are a necessary ingredient, but not enough.

Can internal crisis be avoided? Be prepared

The answer is yes, it can be avoided. Again, I am forced to risk oversimplification but this brief note allows me no options.

Three ingredients are necessary to avoid internal crisis: leadership, vision and alignment.

Leadership and vision are the basis.  And then align your decisions to be consistent with your vision. Your vision must be consistent with your values, with your strengths, it has to match your people, specially your leaders. Strategy is just a consequence of having a vision, of knowing where you are going. Alignment facilitates action and implementation. Ask yourself in every key decision: does this clearly go in line with our vision (with our values)?

Every firm is different. They really are. It may be subtle and hard to pin down the differences but they do differ. So you can and must differentiate your firm. Today, somebody is choosing your firm and not another firm and at the same time somebody is choosing another firm and not yours.

If you do not know why some clients choose your firm and why others don’t, then there you have a good starting point to try and find out who you are.  Answering this question requires introspection. Who we are, what do we do best, what do we enjoy, how are we with clients, why do clients like us and trust us? Do we wish to continue to be and be perceived like this or not? Once you have clarified your identity, you then make sure you have the right leadership. If you are not in a crisis, the right leadership may be there even if you do not recognize it.  If you do not have the right leadership, you may be on your way to a crisis but you may not realize how dangerous the situation is.

Leaders are not those who do what everybody wants them to do but rather those who convince others of their view and vision of what needs to be done.  Who and how you are or wish to be as a firm, your institutional identity, must have a fit with who leads you.

Then, there is also the vision issue. It is really relevant no matter which word you wish to use. To have a vision or a purpose means that leadership has made the necessary introspection and, knowing in depth the “personality” (or culture) of the firm it has imagined an avenue to achieve success (however success may be defined).

This reference in the horizon guides leadership in implementing decisions and change and helps align all efforts. It is not easy, yet it is necessary.

A firm may be successful without a shared vision, just by talented leadership. But this is exceptional and may be short lived.  A vision may even exist without being spelled out.  Yet this is still more exceptional since the larger your firm is, the more emphasis on alignment has to be put and you may only align against a reference, a goal, a target.

When leadership has the vision, it must test it with the firm’s people. People must feel that it makes sense and fell some enthusiasm with respect to the path ahead.

The process to achieve all this is not easy or fast.  It is sometimes disturbingly slow. The reason for this is that people issues take a lot of time. Normally there are no quick fixes and therefore there is no time to lose.

Hard aspects such as structure, procedures, processes, technology are relatively easy to change.

People issues (soft aspects) are hard to change and require a slow pace (a “long march”). There are no short-cuts. Fast brutal changes may be very risky and ineffective. Cultural changes are changes within people’s feelings, attitudes and actions, and they occur relatively slowly with the alignment of many variables (career path, compensation system, shared values, etc.).

Finally, your leadership must walk the talk. In fact, there is no real leadership if it does not act as it speaks generating trust.