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ABA Section of Business Law


Business Law Today

Culture, culture and more culture
A recipe for thriving environments
By Keith Halleland
Numerous adjectives are used to describe the average law firm today—good, bad or otherwise. But somehow I don't ever hear "vibrant" on the list. Why?

Isn't a law firm's heart, spirit and culture important? Sure, modern law firms have splendid holiday parties, recognize our birthdays and even celebrate litigation victories or completed projects at the local gashouse, but I'm talking about the day-by-day interactions and understandings that make a firm a unified organization instead of a bunch of lone rangers advancing individual agendas. Do you think of people or projects when you reflect on your law firm? And if the latter, is it a positive connotation?

Luckily, the writing on the wall is that tomorrow's successful law firms will be more team-focused and culturally incisive. For starters, there's the growing practice of legal services buyers "pinpointing" specialized or localized firms, often expanding their stable of firms on retainer to ensure the best fit, not just any fit. Or how about the cracks starting to show within law firms that use management models and methods that value people hierarchically? Consider the reports from the Wall Street Journal, New York Times and elsewhere: Partners no longer valued for making the inner circle, only for proving their weight through productivity and profitability. Associates second-guessing billability-focused careers and quitting at rates never before seen. Even prospective lawyers seem disenchanted, evidenced by this year's drop in law school applications.

In short, the conventional approach where associates compete with colleagues for partner—a law firm's holy grail—is wearing thin. And forward-looking law firms are finding sustainable success by taking deep, hard looks into their office environments and creating their own special blends of legal services soul.

Physical surroundings, in fact, are a starting place for improving culture, as the new law firm of today thinks literally about how to break down barriers between lawyers and staff, not create them. The private office suites common within historic law firms are impressive, yes, but what do their great expense, size and isolation communicate to others?

Let's face it: clients can judge a law firm's "service" approach before even meeting a lawyer simply by interactions with administrative and staff members. What is most impressive to a client is whether they feel welcomed and appreciated by the entire firm from day one, not the size of the office or the art on the wall.

If a prospective client gets a "sense" from staff that the firm is trustworthy and a great place to work (you know, motivated and exciting people hanging around together accomplishing great things), it speaks volumes more than a nice brochure. Law firms are wise to allocate real dollars to this and make sure staff believes in what you are accomplishing together, not what they are doing after work.

Long-term, value-minded planning is also essential, because it's hard to believe in a law firm that doesn't have a plan beyond this month's or this year's numbers. What do you stand for and is that articulated into values? What do you want the outside world to think about you and is it the same as what you reward?

While recent strides have been made in this area for all sizes and shapes of legal services, most firms still struggle with planning simply because it is hard work to come up with a firm-wide plan, as opposed to a short-term plan that helps the partners pay their mortgages. But you can't expect employees, associates and others to believe in a place they know nothing about. Clients, too, can't be expected to understand what you are about, and what you want to become, unless you talk with them about it. Law is more than a collection of hours strung together in hopes of a good result. Law should be a higher calling and a service to the community.

That service includes humility and stewardship. Today's lawyers run the risk of feeding the "greedy, arrogant law firm" persona already well established in the minds of most people when they mishire, mismanage, and improperly funnel resources. It only takes one partner and one day to destroy years of progress, despite all your good efforts. Just ask Hill & Barlow, Shea & Gould and others that went under after years of success. If that sort of implosion has happened at such large and established firms, it can certainly happen within the rest of the legal services community.

Cultural competence is a particular "must" to an inspired law firm. A diverse workforce is not built for free, doesn't happen accidentally and can make for challenging work trying to understand someone who grew up and relates to clients differently than you do.

However, it's amazing how diversity breeds a strong office culture, which in turn breeds excellence and innovation with clients. Diversity is also an issue resonating with clients and those outside the profession, a sentiment evidenced by increasing reports of corporations factoring in diversity into their law firm hiring and retention strategies. In this way, diversity can be about rich communities and client service, and in the end can lead to a competitive advantage and trustworthiness.

When it comes to the stewardship of resources, too many conventional compensation practices (monetary and nonmonetary) convey the wrong message and need to be rethought. Take, for instance, the concept of origination credits. Some firms have struck cultural gold by stopping "perpetual origination" and rewarding the origination of work only in certain instances or not at all. After all, it's not all about who brought in the file. It's also about if it is being looked after diligently and whether or not a team of service is being created around the client.

Law firms today must regularly exhibit transparent behavior and ethics especially when it comes to leaders who set the tone at the top. If you wouldn't do it in front of a client, or wouldn't want your best client to know about it, then don't do it. The firm will almost certainly pay a price. Enough of the stuffed shirts, and excuses because of positive cash flow in the short term. If you want a firm that people—inside and outside the law firm—trust and stick with, you need to earn it and act accordingly. Surprisingly, you will not only sleep better at night, but your firm will make more money, too.

And speaking of money, the new law firm of today is not in "la la land" concerning profitability. To the contrary, having a positive culture is largely about having a successful business long term and maintaining a compensation system that mirrors the values and goals of the firm. So keep talking about economic goals, partner compensation "tiers," and whatever else will keep you communicating about your reward system, and then talk some more. The findings may surprise you. Some firms, for instance, may find that lawyers are less money-focused and crave benefits related to flexibility or life balance. Other firms may find a strong interest in a specific benefit they hadn't considered before. The only way to learn is to get it all out on the table.

Similarly, every professional needs a career path, and it's never too early or late to start. After all, the number one reason associates leave firms is the lack of career planning. No matter where you are in the organization, do you know what is expected of you and how you can improve? Are you feeling undervalued or overused? If so, it is essential you talk to the firm and figure it out, making sure you're being invested in and staying thoughtful about your talents at every stage of the game. Midsized firms should want to address this issue head on, offering something larger firms seem to struggle with.

The business of law is not about making partner. While a meaningful goal, making partner is simply an indication of progress in the business of perfecting your skills and serving clients. More important is what you do next week, next year, and the year after that. If you don't have an agreement with your law firm about that, you need one.

Why is this all happening? Because people, including clients, want more value. Today's law firms should look for specific ways to methodically tap into this sentiment, including direct client communication over service expectations or client surveys covering key perspectives. Marketing research has long been the starting point for corporate marketing strategies, but for some reason has largely escaped the law firm setting.

Can you return client phone calls immediately, or offer alternate contacts who are informed of their situation when the primary point person is not available? How do you use associates? This takes teamwork and communication, but also an intentional system of standard operating procedures.

Don't forget that many clients today practiced with private firms for years. They know the routine and many left for a reason—their value system did not match that of the law firm. Make sure your firm captures the right sentiment, and you will be happy knowing that you are performing a client service that is needed, valued and sustainable as well.

The importance of having a vibrant workplace can be understood by realizing that a static culture is a devolving culture. There is no such thing as permanent law firm cultural nirvana, just meaningful celebrations along the way. While it sounds silly, it's the journey that counts, not the destination. Take risks and explore options that keep you and your colleagues open to new people, new clients and new ideas. Restoring the trust of law firms among a skeptical public—and increasingly uncertain profession—means reinventing the practice of law, something that starts not with old policies and practices, but rather with individual commitment and an ongoing and obsessive personal passion to change things for the better.
Halleland is founder and shareholder of Minneapolis-based Halleland Lewis Nilan & Johnson, where he co-chairs the health law practice and is founder of the firm's affiliated consulting company, Halleland Health Consulting. He can be reached at khalleland@halleland.com.

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