An absolutely brilliant piece by Paul Lippe in today’s AmLaw Daily makes the case that lawyers’ belief that they will reduce risk by making choices that are conventional or appear safe is misplaced, especially in today’s rapidly changing world. Lippe’s piece, Welcome to the Future: What Bill Belichick’s Taste for Risk Can Teach Law Firms, uses Bill Belichick’s recent decision to go for it on a fourth down and 2 in the waning minutes of the Patriot’s game against the Colts as the starting point for his analysis. He does so after noting John Maynard Keynes classic observation (that seems perfectly directly at most lawyers, and certainly most managing partners), “Most people would rather fail conventionally than succeed unconventionally.” There is comfort in the herd, but you go through life no better than the herd.
Here’s Paul’s punchline:
Over time, the Belichicks who think through risk and make choices that can be second-guessed are better risk managers than the folks who always make conventional choices. And whether he was right or wrong, you can be pretty sure that Belichick (and other coaches watching) thought very carefully about when to punt and when not to after the loss. Conventional choices may minimize the possible harsh glare of criticism, but they also minimize learning.
The same reality is emerging in how lawyers manage their business and careers. I was on a panel recently with leaders from two large firms. When asked how they would respond to a hypothetical client seeking an alternate fee arrangement that involved some risk sharing, one replied, in essence, “If we completely understand what it is, and there’s no risk for us, and we’re assured our normal level of profitability, and everyone agrees, then we could consider it.” The other leader replied “yes.” Which one do you suppose thought through the alternate fee approach harder? Which one is more likely to learn and be in a position to manage risk more effectively?
As an aside, you have to love a lawyer who, when a client seeks “an alternative fee arrangement that involves some risk sharing” sharing responds by telling the client that so long as “there’s no risk for us”. Wonder where he learned that definition of risk sharing.
But to Paul’s point, to be blind to the risk posed by staying with the herd, ignoring the perils that stand to decimate the herd, is hard to fathom. Yet the insight of the definitionally-challenged leader only confirms that people can be blind to their world.
And Bill Belichick? He’s far too comfortable with risk to ever be a managing partner. And even if he got there, his shelf life as managing partner would be considerably shorter than Eric Mangini’s tenure with the Cleveland Browns.