Firm Leadership

Rants, Raves, Rebuttals, Reflections, Revelations & Ruminations

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Post #624 – Wednesday, September 19, 2012

Be A Meaning Maker

It 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!

What 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 challenges.

• 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. 

These 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 and tips. 

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 market.

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? 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:

40%     Passion

29%     Experience in Leadership

14%     People skills

  8%     Experience in the industry

  6%     Intelligence

  3%     Education

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:

54%     Globalization

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.

Post #621 – September 6, 2012

Participant Feedback

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

“Very 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: “inappropriate.”

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 13, 2012

What Does A Practice Group Leader Actually Do?

Now 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 this question.

Twice 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 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 good.

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     

Lawyer 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 decades.

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:


• 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.” 


• 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


• 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)


• Report on Results of Interviews and Confidential Commentary

• Conduct The Vote


• 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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