Published on 11/15/10
When it comes to management, law firms — particularly large firms serving major corporations — are not trendsetters. They follow their clients.
The much-criticized billable hour is an example. Until well into the post-World War II era, legal fees were based not only on time spent, but also the nature of the service, the result achieved and the amount at stake. Charging an appropriate legal fee was a matter of professional judgment.
Then, in the mid-1960s, corporate clients began demanding detailed billing statements and urged lawyers to use time records as a management tool to seek greater efficiencies.
Now, epitomized by the Association of Corporate Counsel's Value Challenge, these same clients are clamoring for more flexibility in the way firms bill them, and the firms reluctantly are beginning to comply once again.
Another illustration of this type of change is management. As large law firms grow larger, the role of the firm's managing partner will more resemble the role of a corporate CEO. Profitability will take a more prominent role in the evaluation of other lawyers in the firm. The managing partner will become more autocratic, reporting to a board or "management committee" rather than to all the partners as a democratic body.
The trend has already taken hold in some of the largest firms, as evidenced by successful discrimination actions by "de-equitized" partners. In several such actions, the government determined that, in law firms with corporate-style organizations, "partners" have become de facto "employees" of the firm — not owners — and are thus entitled to protection under the statutes.
The next step in following corporations seems inevitable. Several years ago, The Wall Street Journal reported that more than 80 percent of larger companies use personality and ability test assessments of new hires to identify potential candidates for leadership positions.
By identifying candidates with the potential to excel and the type of top performers they can be, personality testing makes leadership development a systematic process, not a hit-and-miss effort.
Leaders are not born, they are made — and leadership can be taught. As such, leadership development programs are essential. An interesting result of such programs is that people who take them not only better understand the qualities of a good leader, but they also see what leaders need and are more willing to participate as contributing team members.
Lawyers are smart, in their areas of expertise, but not in everything. A good lawyer is not necessarily a good leader and does not automatically have management skills. If firms develop corporate-style organizations, they will increasingly need corporate-style training to develop their leaders.
