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#624 – Wednesday, September 19, 2012
Be A Meaning Maker
is popular folklore these days to insist that our firm leaders be some
kind of visionary, or strategic thinker.
Maybe we would do better by simply asking them to be meaning-makers!
is a meaning-maker?
Those are firm leaders who . . .
continually talk about the importance of each professional. They find ways to honor the unique strengths
of each individual while coaching that professional and helping them find
opportunities to become even more successful.
continually talk about the future of the firm in ways that makes others not
want to be left behind. They use words
that re-define the future as one of exciting possibilities and beckoning
continually talk about the contributions that the firm makes to its
communities, to pro bono endeavors, to the economy, and how it enhances the
lives of clients, partners, staff and their families.
are the firm leaders who talk about the firm's work as a "calling," a
calling worthy of its members' very best efforts and talents.
Post #623 – Wednesday,
September 19, 2012
Student Loans – Another Bubble Ready To Pop!
Get Ready. The
fallout from the student loan crisis will hit in mid-2013, four years after the
volume of government-funded student loans surged. Like the infamous option ARMs (adjustable-rate
mortgages) during the housing bubble, these loans have precisely timed fuses:
Four years after the loans are made, borrowers must start making payments.
So, imagine it is May 2013 on an ivy-draped college campus.
Your child just graduated with a degree
in English. In 2009, your child borrowed
$50,000 from the US Department of Education’s Direct Loan Program. Job searches for teaching and journalism
positions have been fruitless. Within a
matter of weeks, your child must start making loan payments on a waiter’s wages
Signing up for a huge student loan was a mistake. Everyone had assumed a certain type of job
market would exist four years into the future. The lender — the US government — has long
subsidized unsustainable activity.
According to Labor Department statistics, 1.9 million Americans between
the ages of 20 and 24 not in school are officially unemployed. The size of this age group working part time
is the biggest since 1985.
Unless recent college grads hold degrees in
high-demand fields like computer science, engineering or geology, they aren’t
finding jobs; they aren’t buying new cars; they aren’t starting families; and
they aren’t buying houses, absorbing the excess supply in a sluggish housing
The US Department of Education has become the
Countrywide of student lending. After a
lending binge started in 2009, it now holds a massive $452 billion portfolio of
student loan receivables, according to Federal Reserve data. This so-called “asset” will become a liability
by next year. A huge percentage of these
loans will go bad or have to be restructured.
When that happens, Congress will have to appropriate money to make up
for the loan-payment shortfall. What was
quietly off budget will soon make a big splash on the federal budget. You may expect defaults on government student
loans to reach tens of billions of dollars per year starting in late 2013.
Like Countrywide, the government is not honestly
accounting for its portfolio risks. This
$452 billion portfolio doesn’t even include a few hundred billion more in guaranteed
student loans. The exploding deficit
will force the Federal Reserve to not only keep rates at zero for the rest of
the decade, but also to print trillions more dollars in order to buy the
Treasury bonds floated to fund these deficits.
Post #622 – Wednesday,
September 19, 2012
The CEO of Tomorrow
What will CEOs be like 20 years from now? CEO.com went ahead and asked them. After
surveying more than 2400 students aspiring to the C-suite, they discovered what
they thought about education, entrepreneurship, management style, and social
media, as well as what their top priorities really were. Here are a few highlights:
• According to the students
surveyed, the most important characteristic for CEOs to have is:
29% Experience in Leadership
14% People skills
in the industry
Yes, these results are
correct. Education and intelligence scored dead last and that high score for
passion is almost reminiscent of the thinking that drove the dot com bust. But then I could just be reflecting the
sentiments of my age. So, let’s try
another . . .
• When asked to choose what
their primary concerns would be over the next decade, the CEOs of tomorrow
revealed the following as their top priorities:
53% IT Security
48% Corporate Social Responsibility
47% Mobile Technology
44% Social Media
38% Talent Retention
37% Increasing Costs and Taxation
35% Data Storage
18% The Cloud
I don’t know about you, but
the foresight displayed in this list might have been slightly inspiring had it
been compiled in 1999, but looking into the future . . .
We’re in for an interesting
generational shift in the thinking of our organizational leadership. Again, just my opinion.
#621 – September 6, 2012
It has been a crazy few weeks with all day sessions for both practice group leaders ("Firing On All Cylinders" workshop) and for new firm leaders ("First 100 Days" masterclass), both held recently at the University of Chicago. But the feedback received from participants always makes it all worthwhile.
I received these sample comments from a couple of practice group leaders:
“I enjoyed the practical
tips. Patrick really understands law firm cultures and was responsive to specific
questions and situations.” Kerrin Slatery – McDERMOTT
WILL & EMERY
“This was extraordinarily
helpful. Much more helpful than a
similar event I went to at the Harvard Business School. It has given me some terrific insights that I
intend to implement immediately.” Scott Turner – NIXON PEABODY
And we received these gracious comments from a couple of those at the First 100 Days session:
“I was struck by the synthesis of the issues you presented. It was amazingly clear and comprehensive,
given the breadth of the topic and the short time available. I was delighted to attend the event and I
learned a lot from it.” Hugh
Verrier, Chairman – WHITE & CASE
good session. A lot of good ideas to
take away. This Masterclass puts
into perspective the scope of duties and responsibilities associated with the
position and gave me a workable framework to deal with them.” Thomas J. Bender,
Co-Managing Director – LITTLER MENDELSON
A huge thank you to all who invested the time to join us at the University.
Post # 620 – Monday, August 20, 2012
Social Media is Now Among Top Areas of Risk
It is interesting how seemingly harmless social networking activities
don’t hint at the dangers many are discovering with social media.
Exhibit One: I
noted that with the advent of more law firms appointing or hiring internal
pricing professionals to work with their practice groups and lawyers, someone
decided that maybe it would make sense to launch a Linkedin group exclusively
dedicated to allowing these professionals to network and discuss common
issues. The initial thought was
immediately greeted with responses from many warning about the possible
anti-trust implications involved with sharing information or being perceived to
be potentially discussing subjects that were entirely, shall we say:
Exhibit Two: I’ve
just completed an assignment with an AmLaw 100 firm assisting the elected Board
with the selection of their next managing partner. As part of the process we had hundreds of
partners providing anonymous feedback to me (as the objective third party) on
one or all of the four candidates. Part
way into the process it dawned on a couple of the board members that special
precautions should be taken to prevent any commentary from leaking and then
potentially going viral. The “viral”
aspect of social media – a comment’s ability to go worldwide in a very short
amount of time – is what can make social media a conduit for unintended
embarrassment and risk.
Exhibit Three: A
new survey of US executives, including many at multinational companies, found
social media is one of the top five risks that organizations now face. The Deloitte's report: Aftershock:
Adjusting to the New World of Risk Management claims that 27% of survey
respondents predict that social media is among their most important risk sources
over the next three years. The global
economic environment (41%), government spending (32%) and regulatory changes
(30%), respectively, were the top three expected risks identified by executives
in the survey – and the only ones named by a higher percentage of respondents
than social media. “Social media wasn’t even on the radar a few years ago –
now it’s ranked among the top five sources of risk,” Henry Ristuccia,
Governance, Regulatory & Risk leader at Deloitte Touche Tohmatsu Limited,
said in a news release. “The rise of
social media is just another contributor to the volatile global risk
environment that companies are being forced to navigate.”? ?
Recognizing the risk may be the first step toward managing it. That said, does your firm have any plan for
how it would respond to a crisis that goes “viral” through some social media network?
Post #619 – Monday, August
What Does A Practice Group Leader Actually Do?
this could be seen as a pretty strange question for one to ask . . . if it
weren’t for the fact that so few law firms seem to have effectively answered
a year I have the privilege of conducting a one-day master class for new
practice group leaders, usually held at the University of Chicago and hosted by the Ark Group. Over the years I
have now conducted about a dozen of these sessions and in all cases the
participants comprise firms of over 100 attorneys in size including the likes
of Jones Day, Kirkland & Ellis, Morgan Lewis, Sidley Austin, Weil Gotshal,
Winston & Strawn and so forth. Amongst a number of opening questions
I pose to the entire group at the beginning of the day, is to inquire how many
of them have a formal, written job description.
At my last master class this past June, out of a group of 26
participants, ONLY three hands went up – which is pretty typical of the
responses I obtain. What I didn’t ask, of those who had responded in the
affirmative, is to tell us specifically what their job description
entails. I’ve since learned that that would have made for the perfect
follow on inquiry.
To read the complete article - download the PDF.
The above represents my latest column for Slaw.ca Slaw identifies itself as “a cooperative weblog on
all things legal.” Slaw has been publishing for five years and gets
30,000 unique visitors and about 100,000 visits every month. For the past
two consecutive years it has been the winner of three different awards as the
best legal blog. I’m honored to have been asked to become a regular
columnist and invite you to comment on my latest meandering.
Post #618 – Wednesday, August 1, 2012
Hope For The Best – Prepare For The Worst
There is an old saying, "Hope for
the Best and Prepare for the Worst." Given recent financial reports, we might think we are already at or
close to the worst. But is hoping for the
best enough? On balance, I'd suggest
that hope alone is not about to add a single dollar to your bottom line. The essence of good leadership is to assess
the harsh 'reality' of the situation and then take action.
Meanwhile, the Hildebrandt Institute’s Peer Monitor Economic Index reported that
demand growth was slightly negative and rate growth was also weak for the
second quarter. These results, combined with a stagnating economy, leads
Peer Monitor to predict a challenging economic environment for the remainder of
2012. And I thought all of the various news reports indicated that the economy was picking up.
Every time I look at the news, every time I see a
report on the job market or the housing situation, I see speculation that tries
to suggest . . . “It’s another clear sign that the bottom may be close.” Clear?
Not likely. Economists show
optimist that the housing sector may be showing signs of life one week and then
the next, a new report emerges to dampen the enthusiasm. Job growth?
First the number of new claims for jobless benefits decreases and then
another major company announces more job reductions. What should we believe?
Look at any number widely quoted in news reports
today. The greater the precision, the
greater the lie. Why? Because economists really don’t know anything
for certain. The best they can do is
observe, guess, and hedge their bets with a ‘maybe’ or a ‘possibly.’ The more precisely they claim to know
something for sure . . . the greater the distance between what they can actually
know and what they claim. Numbers are to
an economist what make-up is to an aging starlet – put on enough of it and
maybe the folks won’t see the truth.
Behind every number is a wrinkle. Small numbers hide small ones. Big numbers hide bigger ones. A big number, such as the unemployment rate,
has a whole army of other numbers behind it. There are the statistical adjustments,
seasonal adjustments and enough arbitrary definitions to make a corpse look
The Bureau of Labor Statistics says that 8.2% of the
workforce is unemployed. Simple enough. But what does it mean? What’s the ‘workforce?’ And what does it mean to be “unemployed?’ Think of all those people who work for cash .
. . are they unemployed? How about the
guy who couldn’t find a job, so he went back to school? Is he unemployed? What about the housewife who would like to
find a job; sort of . . . but isn’t actively looking for one? Are these people part of the workforce?
It’s obvious that you can change the assumptions a bit
and change the reported unemployment rate a lot. When statistician John Williams looks at the
data, for example, he comes up with a real unemployment rate of 23% — almost as
high as the jobless rate in Spain. And here is another statistic to chill the blood in
your veins . . . 77% of American businesses are NOT considering hiring anyone
in the near future!
And yet, the BLS tells us that US unemployment is
8.2%. Not ˜around 8%.’ Not ‘less than one in ten.’ But 8.2% - exactly. And yet, there are so many slippery
assumptions lurking in the shadows of this number that it is completely
unreliable and practically meaningless. Or
worse. It pretends to tell you
something, but once you have taken it in you know less than you did before,
because what you think you know is largely a fraud.
Post #617 – Wednesday, August 1, 2012
Office Sizes Mimicking Dilbert
Wood paneling and large offices are going by the wayside at
some law firms. The idea is to cut
office expenses and encourage cooperation, the Wall Street Journal reported last week. Firms embracing this 21st century design are “shrinking
private offices, swapping out walls for glass, and installing high-tech meeting
rooms in dead space once occupied by law libraries and filing cabinets.”
Lawyer offices have decreased in size by 20 percent to 25
percent, according to Matthew Barlow, executive vice president at the brokerage
firm Studley Inc. Some firms, he said,
are placing junior lawyers in interior space once used by administrative
staffers. Typical office sizes are 225
square feet for partners, the story says, and 150 square feet for associates. In New York, however, many firms put two
associates in an office.
The story reports that this idea was first embraced by U.K
law firms. Talk about a 360 degree turn of events. I remember fondly my first assignment working
with a London-based law firm in the early 90s. At that time it was not unusual
to see the traditional barrister’s desk in every office where the partner sat
on one side and an associate (or two) sat on the other side. All in a fairly
small office by North American standards.
Fast-forward twenty years and we now see Allen & Overy
opting for a “generic office size,” all with soundproof glass walls. Others have implemented open-plan offices
where lawyers sit at workstations separated by glass partitions. And among the U.S. law firms is Paul
Hastings, which is planning to make the changes when its leases come up for
renewal. The firm is also considering
allowing some lawyers to work permanently from home. Wow, what a radical concept! The next thing you hear will be firms
adopting a hoteling concept like the accounting profession has been doing for
Post #616 – Sunday, July 15, 2012
Steps In Selecting Your Next Firm Leader
Earlier this week, I organized and conducted the first (to my knowledge) webinar on the topic of how to select your next firm leader. Joining me were Brian Burke, retired Chair Emeritus at Faegre Baker & Daniels and Harry Trueheart, Chairman Emeritus at Nixon Peabody and Chair and CEO of TerraLex.
Leadership succession deals with very real psychological factors that can lead to difficult choices where there are often perceived winners and losers. Many board and executive committee members may not know where to start and what some of the best practices are. One of the first subjects we spent some time on explaining to our audience of over 40 firm participants, was the steps involved in the process.
Your specific selection process may differ depending upon the size of your firm; the specifics of your shareholders/partners agreement – whether your final choice is by election of all shareholders or selection by your Board / Executive Committee. Best practices would suggest that there are 5 distinct phases and each phase has a number of important and sequential steps:
PHASE ONE: MAKING READY
• Choosing A Nominating Committee
Usually made up of shareholders – who should have clearly declared that they have no interest in being the next firm leader
• Develop Your Timeline
This process most often takes 4 to 6 months.
• Interrogating Reality [lot of firms overlook]
Nominating Committee or entire Board needs to carefully reflect upon – “the current situation that we’re facing.”
PHASE TWO: IDENTIFYING CRITERIA
• Identify Specific Skill Requirements
Which flows directly from you interrogating reality.
• Survey Shareholders on Leadership Competencies Desired
We should always find a means to have shareholders involved.
• Develop [OR Refine] The Job Description
• Develop Formal Written Application Form / Process
It is not unusual for the application to have 8 to 12 lengthy questions.
• Identify Selection Criteria
PHASE THREE: CALL FOR NOMINATIONS
• Invite Shareholders to Nominate Candidates
• Host Candidate’s Town Hall Meet and Greet
• Invite Confidential Input
Allow shareholders to express their support/concern for any and all candidates
• Design and Structure A Formal Interviewing of Candidates
Each candidate goes through a rigorous one-hour interview
• Analyze Candidates Personality and Strengths (optional)
PHASE FOUR: MAKING THE DECISION
• Report on Results of Interviews and Confidential Commentary
• Conduct The Vote
PHASE FIVE: MANAGING THE ROLE OF THE OUTGOING LEADER
• Create a Transition / Integration Plan
If your firm is facing the challenge of selecting a new firm leader in the next little while and you have any questions about the process, I’d welcome speaking with you about the intricacies involved in effectively executing these steps.
Post #615 – Sunday, July 15, 2012
The New Subclass?
“We Are The 99 per cent,” went the refrain echoing around Wall Street and Bay Street at the height of the Occupy movement in late 2011. But the same cries could soon be coming from within the glass towers that line the streets at the world’s financial centres if big law firms face the backlash some analysts are predicting from marginalized lawyers chasing an increasingly elusive seat at the equity partnership table.
“Somebody needs to start Occupy Big Law,” says Steven J. Harper, a retired partner formerly with U.S.-based international giant Kirkland & Ellis LLP. According to Harper, the increasing ranks of non-equity partners chasing the mirage of full partnership, or recovering from de-equitization, risks creating a “permanent subclass” in law firms. Even within equity partnerships, he says the widening gulf between the lowest- and highest paid members is a recipe for disaster.
The New Subclass? is the cover story in the July-August issue of Canadian Lawyer magaizne, written by Michael McKiernan. I was delighted to be interviewed by Michael for the story and to be featured throughout his excellent article.
To read the entire article – download the PDF
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