Walker Clark Worldview

If you have clients with business interests or investments in Africa, Legalbrief Africa is required reading for you.  This detailed and highly informative newsletter is a sponsored initiative of the International Bar Association.

It also serves as an information network for African lawyers and other legal professionals in the fields of the law, human rights, governance, constitutional issues, and legislation.

You can visit the Legalbrief Africa website for more information or to register for their electronic newsletter.

Norman Clark

Notwithstanding economic uncertainty in many countries (as well as certainty that things are really bad in some economies), there appears to be a remarkable number of new law firms entering the market. Many of these are formed by partners or groups of partners who concluded that they had no prospects of a professionally and financially rewarding future in their old firms.

As the old proverb states:  When times are risky, it is also the best time to take risks.

Leadership is an imperative during the start-up phase of even the smallest firms. Without it, even the most talented lawyers cannot realistically expect to achieve more than mediocre financial performance long term.

Moreover, a substantial investment by the owners of the new law firm in leadership skills will produce measurable business results. The new firm needs quickly to become a law firm of leaders, not just a law firm with a leader. My experience advising new law firms suggests that law firms of leaders, even new ones, demonstrate at least these three advantages:

• First, they appear to anticipate better the stress that rapid growth can place on the firm’s capital, staff resources, and service delivery capabilities. They also appear to respond to unexpected growth – either faster or slower than originally planned –more cost effectively.

• Second, they deal more easily and effectively with the many minor, but highly stressful, problems that seem to arise almost every day during the start-up phase. Morale appears to be higher. People work hard, but seem to be less exhausted at the end of the day.

• Third, communications, both within the firm and to the legal market, are more accurate and timely.  Most importantly, they are consistent and aligned to the business goals of the firm.  Good leadership ensures that everyone in the firm understands short term business priorities and longer range visions, and that they communicate them in a clear, consistent manner both internally and externally. This allows the new firm to establish its presence in the market, and especially among its desired client base quickly, and to achieve a better alignment of the firm’s service delivery functions to the needs of specific clients.

Greater agility, less burn-out, and better communications with the market — all three of these observations seem almost counter-intuitive to the experience of many lawyers, who start new law firms and sweat their way through those challenging first six months to two years.  Yet I are convinced that any new firm, regardless of size, location, or practice specialty, can enjoy these benefits.

For more about the challenges and strategies of start-up leadership in law firms, click on this link: Start-up Leadership to download an article from the Walker Clark Resource Library.

Norman Clark

It is efforts like the following that make be proud to be a member of the International Bar Association.

The President of the International Bar Association, Fernando Peláez-Pier, and IBA Executive Director Mark Ellis announced this afternoon an opportunity for our profession to help build a permanent, sustainable recovery in Haiti.

Like many of you, we wanted to contribute as soon as possible to the relief efforts, and with the Management Board’s encouragement and approval, a donation of £10,000 has already been sent to the Disasters Emergency Committee. We want also, however, to look beyond this initial period, to the task of rebuilding the judicial infrastructure of the country, which is certain to have suffered a shattering loss of people, as well as of facilities of every kind.

The IBA has a strong track record of helping to build judicial infrastructures in developing countries, which makes us confident in offering to play a role in the reconstruction of Haiti. In precisely which ways the Association can best contribute to this, and exactly when, are questions which of course it is still too early to answer. However, an essential part of how we answer these questions will be to assess the amount of resources we can bring to the task. For this purpose we are seeking your donations – individually, from your firm, your corporation or your bar – to an IBA Appeal for the Reconstruction of the Haitian Judiciary, which we are launching today.

Donations should be given to the IBA Human Rights Institute Charitable Trust, a charity registered in the UK.

IBA HRI Charitable Trust,

BIC/Swift Code: NWBKGB2L,

IBAN: GB05NWBK 56000320712146

Haiti Appeal, Accounts Dept, International Bar Association, 1 Stephen Street, London W1T 1AT, United Kingdom.

Please think what you can do to contribute to this urgent and essential work, so that we can ensure a response of which the legal profession can be proud.

I have noticed in the past 12 to 18 months a renewed interest in quality management in law firms. Clients are asking me questions about things that I have not heard mentioned in most law firms for almost ten years:  phrases like “TQM,” “process reengineering,” and “ISO 9000.”  (Even ten years ago, when I was working with another management consulting firm, one of my partners advised “Whatever you do, don’t mention total quality management.  It scares the lawyers.”)

Part of this renewed interest is driven by the changed profitability circumstances in which most law firms find themselves today.  Consider:

• The demand for legal services is down for many law firms.
• Costs have already been cut as deeply as possible, and in some cases more deeply that was probably prudent.
• Price resistance has increased, even in some practice areas that previously appeared to be fee insensitive — i.e., the client was willing to pay whatever we charged (provided that it was not too outrageously high).
• Clients expect more. As one partner told me, “In today’s legal market, we only have one chance to get it right.”

The old profitability strategy that many law firms used — “All we have to do to be profitable is to charge the highest fees that we can” —  no longer works.

Quality assurance is not just as a means to keep clients happy.  It is also a very powerful profitability method.

• For example, with quality assurance it is possible to improve fee earner productivity dramatically by reducing the causes of errors and rework.   In some firms where I have actually measured it, rework can constitute as much as 40% of a fee earner’s time — correcting mistakes that could have been avoided and which the client probably will not pay extra for the firm to correct.
• By eliminating the causes of errors, missed deadlines, rework, and waste, law firms can improve productivity dramatically without any significant increase in staff or resources.  This improved productivity translates into pure profit.
• By changing quality from a slogan to a system, a law firm can create a significant competitive advantage over competitors who merely talk about quality but do nothing to assure it.

In future posts, I will explore some of the rediscovered concepts, methods, and tools that law firms can use to build higher levels of consistent quality into the delivery of services to clients.

For now, however, it appears to me that the 2010s could be the decade of a quality renaissance in law firm.

Norman Clark

There was an interesting interview in the business section of the 17 January 2010 edition of the New York Times. In “Structure?  The Flatter the Better,” Cristóbal Conde, the President and CEO of SunGard, a software and IT services firm, discussed the role and effect of organizational structures on colloboration and productivity.

As the title suggests, Conde favors a relatively “flat” structure, which is facilitated by, and to some extent driven by, the emergence of “flattening” technologies in business:

…[W]ith the explosion of information, and flattening technologies starting with e-mail, I think that a C.E.O. needs to focus more on the platform that enables collaboration, because employees already have all the data. They have access to everything.

You have to work on the structure of collaboration. How do people get recognized? How do you establish a meritocracy in a highly dispersed environment?

The answer is to allow employees to develop a name for themselves that is irrespective of their organizational ranking or where they sit in the org chart. And it actually is not a question about monetary incentives. They do it because recognition from their peers is, I think, an extremely strong motivating factor, and something that is broadly unused in modern management.

This sounds like a law firm, doesn’t it?  One of the hardest challenges for growing law firms is to preserve the lateral communication and collaboration that account for much of the continued viability of the traditional law firm structure, which otherwise would be an obsolete business model, while at the same time accommodating the practical need for a more “corporate” pyramid structure.

Conde also offers an interesting idea for performance feedback:  Do it in threes.

A boss once told me: “Cris, you’re a smart guy, but that doesn’t mean that people can absorb a list of 18 things to do. Focus on a handful of things.” Very constructive criticism, and the way I’ve translated that is, when I do reviews, everything is threes.

So, “Look, Charlie, these are the three things that are going well. These are the three things that are not going well.” Now, that’s very important because then people know that everybody’s going to get three positives and three things they should do differently. Then they don’t take it personally. I’ve found that to be an incredibly valuable tool.

As one law firm partner described her firm, “We’re over 100 lawyers, but we still feel like the 12-lawyer firm I joined 30 years ago.”

Growing firms that keep that “small firm” culture of professional intimacy and collaboration usually work hard to keep internal communications free flowing and multi-directional, rather than channeled and “top down.” This requires a combination of communications tools, workplace habits, and a professional culture that promotes and rewards teamwork.

Norman Clark

Everyone wants to help the rescue and relief efforts in Haiti, but most people are not sure how to do so.  It is as easy as sending a text message.

You can use the text function of your mobile phone to make secure contributions to emergency relief in Haiti. Most mobile phone services are waiving any text fees that they might normally charge for a text message.

Haiti Text-To-Give Numbers, via Gigaom and Mobile Giving Insider

• Text HAITI to 90999 to donate $10 to the American Red Cross
• Text HAITI to 25383 to donate $5 to International Rescue Committee
• Text HAITI to 45678 to donate $5 to the Salvation Army in Canada
• Text YELE to 501501 to donate $5 to Yele
• Text HAITI to 864833 to donate $5 to The United Way
• Text CERF to 90999 to donate $5 to The United Nations Foundation
• Text DISASTER to 90999 to donate $10 to Compassion International
• Text RELIEF to 30644 (this will connect you with Catholic Relief Services and instruct you to donate money with your credit card)

These are not huge amounts, but if only 10% of the U.S. population each donated only $10 this way, it would raise more than $310 million.

Norman Clark

I was recently asked for advice about legal services in Nigeria from an in-house counsel in United States.

“I suppose that I should be thinking about a London firm, shouldn’t I,” she commented.

This is a common assumption that many potential clients and their counsel make when considering an emerging market.  Although many of the leading international firms in the United Kingdom and United States can provide excellent services in Nigeria, a prospective client might not be aware of the capabilities and quality of an emerging group of dynamic Nigerian firms, which can deliver equal or sometimes even better quality to foreign clients at a very reasonable cost, especially when compared to the fees that some foreign firms might charge.

Nigerian lawyers and law firms deservedly rank among the international leaders of the legal profession.  Their leading professional association, the Nigerian Bar Association, is a world-class organization; and Nigerian lawyers usually constitute one of the largest national constituencies at international legal conferences, such as those of the International Bar Association.

My point does not apply only to Nigeria.  When looking for legal counsel for a case or transaction in an emerging market, you should consider the leading international firms, of course, because of their ability to delivery high-quality service almost anywhere.  However, do not overlook the option of direct instructions to a national law firm, which might be able to deliver better results at a better cost.

Consider the international firms, of course.  But do not overlook the leaders in the national legal profession.

Norman Clark

Every law firm managing partner should feel good about starting the new year with a business plan that has already been approved by the owners of the firm.

Unfortunately, most law firms do not meet the “first day of the year” deadline with their business plans. In fact, a surprising number of law firms operate without a business plan at all. I personally think that this is as risky as setting sail on rough seas without a chart or compass; but, whether I approve or not, this is a reality for many law firms.

The most common reason for not having a business plan is the time required to produce a well-informed, carefully-considered one. “I need to spend my time performing, not planning to perform,” one managing partner recently told me.

There is an alternative to making it up as you go along. For some law firms, it might produce better results to wait until the end of the first month — or even the end of the second month–  before you finalize your business plan for the year. Aside from guaranteeing that you will get at least one or two months right, you might have a better understanding of:

• The factors that shaped your performance in the previous year. Sometimes these are not fully apparent until after you close the books. In some law firms that I have advised as much as 50% of the firm’s fees were not collected until the final three months.
• The factors that are beginning to affect your performance in the new year. Most law firms experience revenue decreases and cash flow issues in the first one or two months of the new year. January, in particular, can be the least productive month of the year. If it takes four to six weeks for your firm to get back into “high gear,” it might be wise to wait and see how the firm is actually functioning in the new year before finalizing your business plan.

Above all, deferring the final approval of the business plan until the second month of the new year can relieve the normal year-end pressures that consume so much time at the end of the old fiscal year.

“Wait and see” business planning might not work for every firm. For firms that already are usually on schedule with their business planning, deferring the final approval of the plan by one or two months might not add very much value. However, for firms that have chronic difficulty with formal business planning, this alternative might be a less stressful alternative that can produce equally good — and perhaps even better — results.

Norman Clark

Law.com has published the National Law Journal’s summary of  “The Decade’s Biggest Stories.” It is most certainly not a nostalgic trip back to the good old days when we partied like it was 1999.

To list the top ten stories (out of 25):

1. War on terror tests the limits of law
2. For associates, a time of thrills and chills
3. Accounting scandals flood the courts
4. They blog, they tweet, they friend
5. Seats change at the high court
6. The decade was fun while it lasted
7. Where have all the flowers gone
8. A law office in every port
9. The ruling that picked a president
10. A time of backlash and disgrace

Many of these top ten events — as well as others on the list — are part of worldwide  trends. However, there appears to be an ethnocentric bias to the NLJ list.   Although some of the top events were part of larger international trends, only one  – the uprising of Pakistani lawyers — even made the list, in position 23.

I can think of other events, such as Justice Richard Goldstone’s investigation last year of alleged violations of international humanitarian law in Gaza, and the creation of the International Criminal Court in 2002, as being of greater significance than, for example, a bunch of sleazy accountants finally getting caught.

To be fair, the National Law Journal is an excellent American publication and, as such, is concerned primarily with the American legal profession. But the apparent unawareness or discounting of important legal events elsewhere in the world — ones with arguably greater long-term consequences — was disappointing.

Notwithstanding my concerns about parochialism in the American legal profession, if you are an NLJ subscriber, you will find the full article interesting and worthwhile.

Let’s hope that the next ten years will be better for our profession and our world.

Norman Clark

I am sure that many readers of this blog were shocked, as I was, to read the article in last Sunday’s New York Times about the extent of hunger and poverty in the United States as a result of the Great Recession.

The article, “Food Stamp Use Soars and Stigma Fades,” reports some alarming facts about the full reach and persistent impact of America’s economic troubles.

• One in eight American families now receives Federal aid to feed themselves.
• This includes one out of every four children in the United States.
• Almost all of these more than 36 million recipients have incomes at or below the Federal poverty line.

The food stamp program was created more than 40 years ago as part of President Johnson’s “war on poverty.” Today, more people receive this most basic form of Federal aid than at any time in the history of program.

It is a sign of an emerging truth that most Americans still want to ignore:  that for millions of us and our neighbors, the recession has become the Great Depression of the 21st century.

For most of these decent, hard-working people, the “recovery” that the media are talking about is still many months or years away. Some families will never recover.

This is a national disgrace.

Name and condemn your own favorite villain in this tragedy. There are plenty of suitable candidates.

But pointing fingers and assigning blame does nothing to stop the growing human tragedy. We need to act.

Here are a few ideas for your law firm:

• Divert 2% of your firm’s profits to charitable organizations that provide shelter, food, and medical care for the newly poor. Even for a small law firm, 2% could make a big difference in the lives of people in your community.
• Hire an unemployed person. Don’t forget our military veterans. Unemployment among recently discharged veterans is currently running over 11%, significantly higher than for the general population.
• Donate a “virtual partner” to people in need. As a partnership, commit  to contribute to community service organizations and projects a number of volunteer hours equal to the average billed hours for a partner in your firm.
• If your firm has a cafeteria, open it to the homeless on weekends or after business hours.  Don’t let your liability insurance carrier or building security try to talk you out of it.  It is the decent thing to do.

Will these efforts cut into your firm’s profitability?  Almost certainly. But remember that very few of us entered the legal profession just to earn a lot of money.

As a nation and as a profession, we can do more to help the more than 36 million less fortunate people who are struggling for survival on the streets and in the communities just outside our law offices.

Norman Clark