Management

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Developing the “Great” Law Firm
by David Freeman
January 2005

One of the biggest questions asked by leaders in any profession is, “What organizational principles should I implement that will help my firm improve its performance?” Management theories abound claiming to cure the ills of any organization, and while there is no shortage of supposed answers, the challenge facing leaders is to sift through all the choices and pick an approach that will work for them. Fortunately, a book has recently hit the shelves that can provide some guidance.

It seems by now that everyone and their mother has read or heard about the book Good to Great, written by Jim Collins, and they all seem to agree that his conclusions are visionary for a variety of businesses. The problem is, however, whenever such superb books are published, there lacks specific instruction as to how these powerful ideas apply to the unique factors that exist within specific industries.

We all know our legal industry is unique, so while we might agree that his principles have profound ramifications for law firms, what we need is a more specific roadmap, one that acknowledges and accounts for the particular issues faced by our profession. The following article is my attempt to fill that gap. First, let’s talk about the book itself for those of you have not been baptized in his gospel.

Good-to-Great Companies

Collins started with 1,435 companies and conducted exhaustive research to find 11 companies that exhibited superior results over a sustainable fifteen year period. He then studied those companies to find common characteristics that distinguished them from others, and found that these companies went through three stages:

  1. They found disciplined people
  2. They engaged in disciplined thinking
  3. They took disciplined action

While on the surface this seems to be the blinding flash of the obvious, as always, the devil is in the details. Let’s first take a closer look at these three stages before talking specifically about how to make them work in a law firm.

Disciplined People
Collins uses the analogy of a bus, and states that great companies first need to get the right people on the bus, in the right seats and the wrong people off. He also tells us that these companies have what he calls “Level 5” leaders, people who possess a rare mix of personal humility and a strong desire to help the organization succeed. These are individuals who have strong ambition, not for themselves, but for the organization. His advice is to place people who exhibit these qualities in leadership positions, and move the wrong people out.

Disciplined Thought
Making the move from good-to-great also requires an honest look at the current reality. Collins tells us that his great companies all engaged in a process of looking at the “brutal facts” and engaging in “vigorous debate” to gain “shared insights.” These companies all had a standing body, the “Council” that engaged in these discussions and developed a simple, unifying strategy around which the company could rally.

Disciplined Action
Collins goes back to his prior principles and states that if you find disciplined people who conduct disciplined thinking, you will get disciplined action. He says the great companies create a “stop doing” list of things that are not in alignment with the overall goals, and they focus only on those activities that support their simple, unifying strategies. The key is to make a series of incremental changes, not dramatic ones, in order to build momentum and thus get the organizational “flywheel” moving. Collins observed that under the right conditions, the problems of alignment, commitment, motivation and change dissipate, and the momentum builds upon itself, getting the flywheel moving even faster.

The Reality Inside Law Firms

As I mentioned earlier, we need to translate these basic principles so they can be applied in our particular industry. This section will describe some of the initiatives you can undertake that can get these dynamics in play in your firms.

Disciplined People: Choose New Leaders
Collins shows us that great companies first have the right people in the right places. In many law firms, however, the wrong people occupy the wrong seats. Practice group leaders are often given their jobs because of seniority, or their books of business, not because of their skills as leaders and managers. The answer is simple; find the right people, with the right leadership traits, and put them in the right positions. What is not so simple are the hurt feelings and political maneuvering that will result. Leaders also have to keep the pipeline of future leaders full, which means recruiting and developing people who have the requisite skills, while also providing ongoing opportunities to hone their leadership abilities.

Disciplined Thought: Highly Functional Leadership Team and Aligned Planning
Right thinking usually requires a process, a system that 1) establishes an environment that allows for good decision making; and 2) takes the decisions and applies them to all levels of the firm. Unfortunately, many leadership teams can’t get an effective process started because of dysfunctional dynamics like internal politics, infighting, power struggles, turf battles, and egos. As a leader, your job is to reduce the influence of these factors so that you can get to the truth and make decisions that are in the best interests of the firm as a whole. Skilled facilitation can get a group focused on the big picture and establish an environment where these negative influences are reduced and a new dynamic for positive, productive interaction becomes the norm.

It takes more than just a leadership team coming together to form a unifying strategy to get the ball rolling. Everyone in the firm must understand their role in making the strategy a reality. The best process I’ve seen is a series of aligned planning sessions, starting with the firm-wide perspective, followed by the practice groups, then shared services, and then staff. You get the flywheel moving when you get everyone pushing, and aligned planning makes sure everyone is pushing in the right direction.

Disciplined Action: Training and Coaching
Collins’ research revealed that disciplined action is a result of disciplined people doing disciplined thinking. Realistically, most firms need additional support to make this “magical alchemy” manifest itself in superior results. The dual challenges of achieving billable quotas and a lack of crucial business skills makes another layer of intervention necessary.

Many firms provide training on how to become a technically good lawyer. Glaringly absent is education on how to become a good businessperson. These skills are usually learned through trial and error, and the outcome is a patchwork of often conflicting opinions on running a firm. The solution is providing a uniform set of best practices that your leaders can follow that will drive the success of the firm.

Leadership Training
Using the human body as a metaphor, if strategic planning represents the head, and implementation is the feet of an organization, then leadership is the gut. Take an honest look at your organizational anatomy. Is your firm’s architecture tight and lean, providing a strong connection from head to toe, or is it flabby and out of shape, giving no support to your organization’s backbone? As a leader, it is your role to get a clear line of sight connection from top to bottom, and your group leaders are the ones who make that happen.

A well-designed training program will incorporate specific needs and will provide a unified approach to addressing the major management/leadership issues facing the firm. I also suggest incorporating the ideas of the participants in order to remove the “not invented here” dynamic that gets in the way of full acceptance and implementation of the training.

Coaching
It’s one thing to be given knowledge; it’s quite another to transform it into life-long skills. To keep the flywheel moving, coaching and mentoring can help ingrain the training and make it a part of their everyday practice management skill set.

Conclusion

Let’s face it, who doesn’t want to be great? We all want to be winners, to be part of a winning team, and your role as a leader is to provide the infrastructure that allows that to happen. By utilizing these approaches, you can build momentum in the right direction. It might just be the most rewarding professional experience of your life.

This article is reprinted from Of Counsel with the permission of Aspen Publishers

We have heard how the Good to Great principles were important factors in helping companies achieve superior results. Here is how it can be specifically to law firms.

Implementing a Good to Great Process

Good to Great Elements How to Implement the Elements Timeline
DISCIPLINED PEOPLE    
Find Level 5 Leaders • Succession planning Ongoing
First Who, Then What
• Right people on the bus
• Right people in right seats
• Wrong people off the bus
• Change leaders where needed
• Recruitment – find the right people who possess the leadership skills
Ongoing
DISCIPLINED THOUGHT    
Confront The Brutal Facts • Internal survey of all lawyers and staff
• Key stakeholder interviews
• Client surveys
• Market research
Month 1
The Council
• Vigorous debate
• Range of perspectives
• Group dialogue
• Determine the truth
• Shared insights
• Regular meetings between key department and practice group leaders, board members, key management and/or opinion leaders Month 1 +
The Hedgehog Concept
• Best in the world
• Find economic drivers
• Deep passion
• Search for the best answers
• Fully unify behind a decision
• The “stop-doing” list
• Focus on excellence
• Build on opportunities
• Collaborative strategic planning sessions
o Overall firm planning
o Cascade to aligned practice group plans
o Cascade to support services plans
o Cascade to staff plans
o Supportive budgeting

Month 2
Month 3
Month 4
Month 5
Tied to plans

DISCIPLINED ACTION
 
Technology Accelerators • Fund supportive technologies identified in planning process As needed
Get the Flywheel Moving
• Create the conditions to drive commitment, alignment, motivation and change
• Manage in a way that does not de-motivate
• Create an integrated whole that is much more powerful than the sum of its parts
• Individual action plans aligned to practice group plans
• Skills development
o Leadership and management skills
o Business development skills
Month 6

Month 1

A Culture of Discipline
• Manage the system, not people
• Coaching and mentoring Month 2 +
Continue the momentum
• Compensation system designed to get and keep the right people
• Communicate successes
• Reward behaviors that support Hedgehog concept
Ongoing
Ongoing

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David Freeman J.D., CEO and founder of Whetstone Consulting LLC, helps firms and individual lawyers sharpen their performance by providing customized services in the areas of leadership training, business development training, and goal-focused retreats. With over twenty years of experience, he has worked with thousands of lawyers in over 50 law firms across North America, including 24 in the AmLaw 200. He can be reached at dfreeman@whetstoneconsulting.com.