Walker Clark Worldview

A managing partner of a reputable and reasonably successful midsize law firm recently told me, “We look for partners who are just like us, who we know will fit in.”

This is not the first time that my colleagues and I have heard about this “unwritten trump card,” as a senior partner in another firm describe it.  ”If we have two candidates who are roughly equal, we will usually give the nod to the lawyer who has the better chemistry with us,” a partner from yet another law firm once told me.

Especially in the traditional context of a law firm partnership, it is natural to want partners with whom one feels comfortable, with common backgrounds and points of view to one’s own.  We are more likely to trust and feel confident about people who are more like ourselves.

Is is perfectly natural.

It is also potentially lethal to any business, but especially law firms.

Our firm’s experience working closely with law firm partnerships and practice groups demonstrates that a group of professionals is better able to make hard decisions, manage change, and get the best results from innovations if it has people with diverse backgrounds, experiences, personalities, and points of view.

Such groups are usually better able to:

• See through unproductive business paradigms that most law firms continue to accept blindly as immutable truths.
• Apply a lively intellectual rigor and critical thinking to proposed innovations and, as a result, usually obtain a better return on their investment in them.
• Spot new opportunities before their competitors notice them and build competitive advantages that will be difficult for competitors to overcome.

By contrast, partnerships that are not diverse, where everyone is “just like us,” are usually more likely to:

• Cling to old business assumptions, habits, and “values,” even then they clearly do not produce desired results.
• Dismiss fundamental changes in the legal market as “fads.”
• Worry that recruiting and promoting women and ethnic minorities might “compromise our standards.”
• Fail to implement new strategies or management changes, even when the partners agree that they are needed.
• Avoid differences of opinion as being “damaging to our partnership culture.”
• Consider honest questions or doubts to be disloyal to the firm.

Which of these partnerships is more likely to grow?  Which is more likely to be in business 30 years from now?

Diversity is not just good social policy or a way to check a box on a client’s checklist of selection criteria. It is good business. Rather than look for “people just like us” when we select new partners in our law firms, we need to look for people who challenge us intellectually and who call on us to look at our firms and our profession in new ways.

Norman Clark

There are an interesting discussion and several related links in this morning’s National Law Journal posting “Spotlight on Laterals.”

The panel discussion focuses primarily on large law firms; and some of the comments and observations might not be entirely applicable to small and midsize firms. Also, as appears to be customary with the National Law Journal‘s American focus, none of the discussions take into account local market situations for law firms outside the United States. With those caveats in place, “Spotlight on Laterals” might be interesting and worthwhile reading for those of you who are NLJ subscribers.

Whether to bring in a lateral partner is one of the riskiest business decisions that most law firm partnerships will ever make. The opportunities can be very attractive, but like most things with the potential for great rewards, admitting a lateral partner also carries high risks, which much be identified, defined, and managed in advance.

I recommend to my firm’s clients that they use a methodology that is similar to that used to evaluate the business case for a law firm merger, and that they be satisfied that they have solid, factually supported answers to all of the questions.

We sometimes have to make business decisions based on a large component of faith and goodwill. Admitting a lateral partner into your law firm should not be one of them.

Norman Clark

National Law Journal has a short, interesting post on-line this morning: “Slight boost seen in number of part-time attorneys.” To quote the pertinent facts:

The percentage of attorneys working part time ticked up slightly in 2009, despite fears that the unstable economy would prompt fewer people to seek reduced-hours schedules.

According to the latest statistics from the National Association for Law Placement (NALP), the percentage of part-time attorneys at law firms grew from 5.6% in 2008 to 5.9% in 2009.

What surprises me is that the numbers are not higher — especially in the United States, where the “true” unemployment rate (“official” unemployment + unemployed people whose benefits have expired + people who are “underemployed” in part-time jobs that are insufficient to keep them out of poverty) is approaching 50% in some metropolitan areas. Many young lawyers are desperate to find any work that they can get, preferably in their profession.

What also surprises me is how many law firms appear to have completely overlooked part-time lawyers as a readily available, low-cost, high-yield resource, particularly in practice areas that are currently producing uncertain flows of new legal work.

Having a group of part-time attorneys with well-rounded professional knowledge and backgrounds, who are also available on relatively short notice, could make a big difference  in measurable financial terms and competitiveness for new work. Part-time staff can also ensure that the firm has the basic service-delivery resources that will be needed when the economy enters a sustained recovery.

Walker Clark, LLC, advises our clients to consider using  part-time lawyers and paralegals. We also help our clients to set up flexible plans and systems to recruit, manage, and incorporate these valuable “just in time” resources into their business plans and legal staffing. For more information about how we can help, contact me by email by clicking on this link or via our website.

Norman Clark

According to a post in NLJ.com this morning, yet another law firm is refusing to cut itself to the bone and hide in the bunker.

The NLJ article describes how Los Angeles based Sheppard, Mullin, Richter & Hampton has quietly executed a hiring strategy, often at the expense of better-known competitors such as DLA Piper, who have had to cut lawyer staff recently.

Carefully aimed hiring of more legal talent, when so many other firms are cutting back, is usually a very reliable indicator of two things:

• First, it is a sign of traditionally solid management.  Only firms that have managed themselves well and have avoided the temptation of poorly thought-out expansion in the past now have the financial resources to expand.
• Second, it is a leading indicator of a firm that is likely to emerge from the current recession in a substantially stronger competitive position.   If you want to bet on which firms are going to survive the recession and emerge stronger than before, bet on firms like Sheppard Mullin.

Norman Clark