Leadership and Management

"If you don’t like change, you’re going to like irrelevance even less."

                             –General Eric Shinseki, then Army Chief of Staff

Courtesy of a tweet by my friend Gerry Riskin (who also blogs about this video here), comes this eye-opening (and if it doesn’t open your eyes, you’re dead) slide show prepared Beaton Research and Consulting.

Gerry’s advice is to use this slideshow at the beginning of a partnership or practice group meeting.  But every lawyer, and certainly every leader, should be thinking about what this slideshow means for the practice of law in the United States.

Yesterday, I spoke to a group of mostly insurance defense lawyers.  Earlier, I wrote about Rio Tinto bringing in an Indian Legal Services Provider to lower costs.  Is it foreseeable that even the staid insurance world will be swept up in this frenetic pace of change?  How can it not be?

But certainly corporate America is caught up in this change, and it is dragging the legal world along with it.  Wake up.  Pay attention.  Or become irrelevant.

 


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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.


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One of the explanations often offered by managing partners to explain why lawyers (really, their organizations) are so slow to change is lawyers’ well-establish aversion to risk.  Change involves risk, to be sure, though the assumption implicit in the statement–that the status quo does not involve risk–is demonstrably untrue.  That debate, however, can be had

My friend Ed Reeser has written extensively, in blogs, Legal On Ramp posts and articles, on leadership issues in law school.  If you know Ed, you know that he is the kind of person who leads from the front and he is the kind of leader you love to follow wherever he goes.  So when he writes about leadership, I read very closely.   His latest piece, The Lost Art Of Leadership, published in today’s Los Angeles Daily Journal, is worth a careful read.

Ed begins with one of my favorite Peter Drucker quotes, "Management is doing things right; leadership is doing the right things."  The gist of Ed’s argument is that law firm leaders have failed this essential test of leadership; they have lost touch with the people that make up the firm, and in so doing have brought the firm to its knees.  People are the real key, and they are being sacrificed in the name of expediency.  According to Ed:

Partners in leadership positions are increasingly not leaders, but those with enough power to demand positions and allocate to themselves, and their friends, increasing shares of money and other rewards.  The confusion of the position of leader, with the fulfillment of the role of  a leader, has never been more apparent.  The short-term approach of present day law firm management appears to have more in common with a smash and grab visit to a Tiffany’s counter than exercise of fiduciary concern for one’s partners or a long-term responsibility for colleagues’ careers.

Harsh, to be sure, but true?  This is an area where there is no "right" answer and no data to suggest an answer.  But let me share this anecdote.  I just returned from lunch with two of the leading and most respected law firm consultants in the world.  I assumed their business was booming because certainly in these trying times, leaders would be looking for insights and a sounding board to discuss new ideas and approaches to bring their firms back to economic rightness.  Nope, not happening.  I suppose its possible that firms really are seeking insights and fresh ideas, but have simply gone to other consultants.  Not likely though. Instead of saving careers and being a true leader, isn’t it much easier to eliminate a few jobs and cut back on coffee?

At the end of the day, it is, perhaps, too much to expect that most people running law firms would act as true leaders.  Real leadership, after all, is really one of the rarest traits.  That is why we so marvel at it when we see it.

 


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