Post # 951

Being a Leader Is Actually All About RELATIONSHIPS.

It has been my observation, over the years, that many leaders rank low on empathy. They understand it intellectually, they just don’t pay enough attention, ask the right questions or comprehend that it is not just about what your colleagues think, but about how they FEEL. As you think about how you exhibit genuine empathy here are five questions for you to contemplate.

1  Do you show a genuine interest in what each of your professionals wants to achieve with their careers? Think about each member of your team. Are some individuals, with a lot of potential, performing at levels far below where they should? Providing personal COACHING and paying close attention to what your professionals need in developing their careers is a critical part of any leader’s role.

2  Do you show an INTEREST in the things that mean the most to your people in their personal lives? All of the people in your group have personal lives that are very important to them. The qualities it takes to develop and nurture any successful relationship, are the exact same as required to develop and nurture a successful team. We may need to reflect upon whom we spend more time with during the average working week, our spouses or our teammates.

3  Are you there for your colleagues in their times of personal or professional crisis? Every so often all of us confront crises and make important transitions in our lives. Right now, as you read this, it is very likely that some member of your team is facing some significant issue or transition. If you are even aware of it, what kind of SUPPORT are you offering?

4  Do you informally “CHECK-IN” with each of your colleagues? There are those situations when work commitments get over-powering, when our internal systems seem to make it harder to get anything done, or when a technology glitch makes us wish for simpler times. Do you notice when team members are frustrated or distracted and take time to check in with them?

5  Do you OFFER TO HELP when some member of your team clearly needs it? And by help, I don’t mean sparing a few minutes to be a sympathetic listener. I mean as busy as you are, are you willing to take on some of your colleague’s headaches to help him or her through a rough period?
 

Post # 950

Leadership Reflections for The Remainder of 2022.

Looking back over these past six months and the leadership legacy you have been creating . . .

• What do you need to LET GO OF or complete before the year is over?

• What type of personal EXAMPLE have you set for others during this past year?

• Did you handle those sensitive and difficult situations in ways you would want your team / firm members to REMEMBER? 

• As you look at your personal day-timer over the past months – how did you spend your TIME and what message do you think you sent your people about what it is that you really value?

• What specific initiative did you successfully put in place that helped your team / firm pursue EXCELLENCE?

• As you reflect upon those of your competitors that are doing exceptionally well, how might you INCORPORATE some of the things they accomplished into your team / firm?

• Looking to the remainder of 2022, is the climate you are creating within your team / firm conducive to INNOVATION or is the prevailing attitude one of calculated mediocrity? 

• What specific goal have you set for yourself, and how will that goal stretch your thinking and your ACTIONS going forward?

Post # 949

Why Many Leaders Are Unknowingly Delusional

Post # 948

Amplify Your Leadership Communications.

If we can infuse these 12 practices into every leader's drinking water, we will help satisfy a great deal of what their colleagues are thirsting for.

• Avoid assuming that your communication or behavioral style is the one everyone else has and learn to MODIFY your style to the style of others. Adhere to the principle that “communication is not what is said, but what is received.”

• Show up and play to the heart. Communication that is high-touch, low-tech inspires people to action faster than the one-way data-dump, the presentation, the dry facts. If you want buy-in, find the passionate story, do the road show, and make it INTERACTIVE.

• Be GENUINELY INTERESTED in the needs of others and be interested in the growth of others, even more so than the others are at times.

• Infuse a need to grow by TEACHING . . . rather than simply giving the answers.

• FUSS over others’ events, interests, activities, achievements, families, and friends.

• Find the real meaning, stop hiding in your office, and GET WITH the people.

• Become clear and comfortable with the FACT that leadership does NOT mean “being the smartest or being the most popular one on the playground.”

• Believe that people do what they get paid attention for, and be spontaneous, as well as scheduled in YOUR RECOGNITION efforts; but avoid giving a public person, private recognition as they will see little or no value in it.

• Maintain an awareness of just how much your body communicates and remember that your body CONTINUES talking long after your lips stop moving!!!

• Do before talk, ask before tell. Almost all leaders over-talk and under-do. If you want people to make a change, DEMONSTRATE the change yourself first. Ask a lot of questions and listen well (it's why you have two ears and one mouth, right?). 

• FIX SOMETHING that is driving your colleagues crazy. You want more innovation? Show them an innovative idea you carried out. Want to cut costs? Cut one of your entitlements first. Anything less will be viewed as insincere and arrogant -- even though you are infinitely well-intended.

• Create goals that are both realistic and UNREALISTIC. Commit your goals to writing and ensure that they are measurable, and then celebrate the achievement of each goal.

Exhibit leadership traits as part of who you are, not what your particular title is; and finally . . . 
“Give yourself permission to leave things undone and let go of needing to be perfect, and of needing everyone else to be perfect”  

Post # 947

Assessing Whether You Have an Effective Industry Focus 

I received the following query: “How would we know whether we are taking the right steps in shifting some of our firm’s attention to a few client industries?”

Here are a dozen questions, I have often used in workshops to help Executive Committees self-assess whether the key issues that need to be considered are being addressed and what issues may require remedial action:

#1:  Does our firm truly understand how much importance our CLIENTS PLACE ON INDUSTRY knowledge?

#2:  Does our firm leadership really believe that industry knowledge has a direct and meaningful impact on our overall FINANCIAL PERFORMANCE?

#3:  Has our firm made definitive decisions about which SELECTIVE INDUSTRIES TO STRATEGICALLY TARGET and focus on?

#4:  Has our firm organized and actively recruited PARTNERS TO join and COMMIT a specific number of non-billable hours to working on ONE chosen industry team?

#5:  Does each industry group have a leader (or co-leaders) TRAINED to manage, coach, support and facilitate the group’s initiatives?

#6:  Does our firm have any formal programs and budgetary RESOURCES AVAILABLE to develop the industry competence and expertise of the partners?

#7:  Does our firm have industry focused RESEARCH PROGRAMS that monitor and identify emerging industry trends?

#8:  Has each industry group developed a formal, written STRATEGIC PLAN identifying specific niche opportunities, where they are working to develop a position of dominance?

#9:  Has our firm assigned specific MARKETING professionals to SUPPORT each of the industry teams?

#10:  Does our firm make an active effort to capture and LEVERAGE the industry specific intellectual KNOWLEDGE gained from client engagements?

#11:  Are industry competence and expertise assessed and tied directly to our LATERAL RECRUITMENT efforts in order to build upon the industry group’s market strength?

#12:  Does our firm report and ASSESS PERFORMANCE by industry (fees, profitability, growth, partner contribution, partner promotion, compensation decisions, etc.)?

You are welcome to learn more about having an effective industry focus by downloading and reading my newest book  (17 Chapters / 290 pages) entitled - "INDUSTRY SPECIALIZATION: Making Competitors Irrelevant" 

Your copy may be accessed here with my compliments: https://bit.ly/3KrrXwf

Post # 946

Beware The Zombie Client!

Inflation hit a new 40-year high of 8.6% in May. High inflation has forced the Federal Reserve into what will likely be the fastest series of interest rate hikes in three decades. Expect them to raise interest rates by AT LEAST another 2 percentage points this year. By raising borrowing costs aggressively, they hope to curb inflation. It promises to be an extremely difficult balancing act.

In an earlier post titled The Inflation Tsunami, I warned “Identify those existing clients whose inflation impacted financial position could adversely affect YOUR firm’s business. Not every client is a client worth having. Working capital, the selection of clients and client relationships must be managed far more carefully.”

Law Firms have been riding high on a post-pandemic wave of unprecedented financial success. But today, America’s ZOMBIE Companies have now racked up $1 trillion in debt; aren’t earning enough to cover their interest expenses let alone make a profit; and are at high risk of insolvency or abrupt implosion as these interest rates rise. Zombie companies are at least 10 years old. Think American Airlines and Carnival Cruises, massive companies propped up by name recognition and a friendly lending environment, that were once America’s case studies in success and the most desired of law firm clients.

According to a Bloomberg analysis of financial data from 3,000 of the country’s largest publicly-traded companies, Zombies now account for nearly 20% of those firms (and perhaps your current clients). Their numbers have been increasing for over a decade, fueled by years of ultra-loose monetary policy. Zombie companies get their nickname because of their tendency to limp along, unable to earn enough to dig out from under their obligations, but still with sufficient access to credit to roll over their debts. Soaring inflation coupled with rising interest rates may be just enough to push a wave of Zombies from undead to dead dead!

From an INDUSTRY perspective, one of Thomson Reuter’s analysts identifying areas ripe for growth during a downturn, claimed that Real Estate was an area where firms should focus.” I DISGAREE. The real estate industry had the highest absolute number of zombies. In commercial real estate, April’s 16% decline in sales marked an abrupt turn from March and had a number of economists saying “the speed of that transition is shocking.” Other investors are walking away from large deals already in contract. And as firms fight to acquire Private Equity Industry expertise, deal making has slowed. Exit activity stalled from the 2021 frenzied pace. PE investors face a much more difficult environment moving forward, exemplified by less liquidity and an increased focus on valuation by buyers.

Now:Focus on certain INDUSTRY clients that are profitable and more inflation proof.

Post # 945

Sharing Firm Leadership: NOT For the Faint of Heart.

Interestingly, there is a pronounced trend toward firms adopting a shared leadership model, with perhaps the most recent example being the elite litigation firm of Quinn Emanuel. See Karen Sloan, “Litigation giant Quinn Emanuel beefs up leadership, elevating DC, NY partners,” Reuters, May 13, 2022 (noting that 900+ lawyer firm “has shaken up its leadership model, installing two prominent litigators as co-managing partners and shifting namesake Los Angeles-based founder John Quinn from sole managing partner to the newly created role of chairman.”).

If your firm has potential office, group (e.g. “our Global Litigation Practice”), or firm leadership candidates who would be great in the role but are reluctant to give up any of their client responsibilities, the notion of having co-leaders may be an attractive alternative. But, the reality of what can occur, is a lot more complicated.

Over the years I have been a first-hand witness to numerous incidents where the leadership duo has imploded. The job of leading a law firm may certainly be demanding enough for two professionals; but the acid-test is getting two people to really share the role.  

For example, there are certain leadership responsibilities which naturally confer more power than others.  Duties that involve the setting of the strategic direction, investment choices, or selecting key professionals could place one leader in a superior position over another leader.  Unless the power structures are equitable in these power roles, a firm may find that one of their co-leaders is a Co-Chair in name only.  That can create high levels of resentment if pay levels are equal, which creates even more stress in the working relationship.  Disagreements will be inevitable.  If power struggles come to the fore, chaos can ensue.

My observations and research show that firm leaders who relinquish their practices to assume management responsibility may be in a tough spot when their leadership role comes to its conclusion. In my work over the years with training (First 100 Days Masterclass) new firm leaders, I have found that only about 23 percent of firms have any formal ‘parachute provision’ or other compensation formulas to help them ease out of the leadership roles and back into full-time practice. Thus, following your retirement from leadership, you may find yourself having to work under a new compensation arrangement, contingent on your performance as a full-time practitioner. Meanwhile, having passed your client load off to other partners in the firm, you now lack the traditional hefty book of business that makes you attractive to your, or any other firm.

In this article I provide 7 prescriptive guidelines that I counsel co-leaders to sit down and have a frank discussion about.

Read the entire article at Legal Evolution:

https://www.legalevolution.org/2022/05/sharing-law-firm-leadership-not-for-the-faint-of-heart-305/

Post # 944

Beware the 2022 INFLATION Tsunami (Part Two)

I authored a post on the ravages of inflation some six months back. Now with inflation at 40-year highs, increasing fears of a LOOMING RECESSION, volatility spikes in the market and a relentless quest for top talent, your firm must take decisive action. So what to do?

Here is what I would strongly recommend:

• Launch an Inflation Action Group comprised of those individuals on your Executive Committee who can understand a Financial Statement and are your best 'numbers geeks' to study what inflation has done in the past and discern the lessons for what you need to do going forward. Their goal is to help everyone transition their thinking to a world where the cost of capital and the cost of doing business are both going up at the same time. There is no more urgent a task for Executive Committees than to get ahead of the dire effects of inflation.

• Have your CFO determine the firm’s cash and competitive position if and when the inflation rate increases to various levels. It is advisable to have some forward-looking financial scenarios. Have the CFO propose various options for how the firm might operate at different levels of inflation.

• Cash management is your keystone to managing in inflationary times. Have your CFO develop a tracking system for where the cash is coming from and where it is going . . . on a daily basis! What is the right level of firm debt, margins, receivables, costs – and billable rates. Your Inflation Group should create a framework of priorities to determine how cash should be allocated.

• Track real data on your clients and their spending. The most important thing is continued cash flow generation. Identify those existing clients whose inflation impacted financial position could adversely affect YOUR firm’s business. Not every client is a client worth having. Research what is happening with your largest clients and what is happening to their customers as well. What is each client’s cash pain point?  How are they managing to absorb inflation?

• Working capital, the selection of clients and client relationships must be managed far more carefully. Focus on certain INDUSTRY clients that are more profitable and more inflation proof. Identify what certain clients are willing to pay more for and focus your efforts there. This means focusing on certain segments of your market and withdrawing from others.

• Almost all clients will do their best to extend the terms of payment and in an inflationary period, any payment delay is unacceptable. To protect cash flow and profitability, you will need to revisit any long-term contracts and change those that lock you into situations that could lead to you experiencing a cash shortage.

In the final analysis – Make Harder Decisions Sooner. 
How you think about inflation and your PROACTIVE responses, will determine whether your firm thrives in any coming recession, and even gets out ahead of your competition.

Post #943

Would You Rather Be A Leader or Manager?

In a recent discussion I had with the management group within a particular law firm, I began to say, “as group managers . . .” when I was interrupted mid-sentence and told that the proper title was “group leader.” I’ve noticed this same behavior on a number of occasions as if to suggest that there is some contempt attached to the word “management” and a sense of esteem attached to the term “leadership.”

I was ruminating about this issue when I came across commentary offered by Jim Collins, the best-selling author of Built to Last, Good to Great, and Great by Choice.  Jim was commenting on the contributions of Peter Drucker, the late father of modern management . . . 

"As Peter Drucker shows, the very best leaders are first and foremost effective managers. Those who seek to lead but fail to manage will become either irrelevant or dangerous, not only to their organizations, but to society."

Drucker belonged to the church of results. Instead of starting with an almost religious belief in a particular category of answers — Drucker began first with the question “what accounts for superior results?” and then derived answers. He started with outputs — the definitions and markers of success — and worked to discover the inputs, not the other way around. The more noble your mission, the more he demanded: what will define superior performance? “Good intentions,” he would seemingly yell without ever raising his voice, “are no excuse for incompetence.”

For my part, I really don't care which label we use as long as the lawyer given the title is prepared to do the job that goes along with the title. Perhaps we should have more firms adopting the title of Group Coordinator or Group Coach. I’ve said to many firm leaders, I think we made a huge mistake in calling our people practice or industry group "leaders.” For one thing, everyone wants to be known as a leader, but too few want to devote the time and really work at doing the job that is required. 

And, all too often the concept of leadership is taken to mean being a “role-model.” Or put slightly differently, “I was clearly promoted to this role of leadership because I am such as successful practitioner. So, just do what it is you see me do and you too will be successful”

Don’t we all wish it was only that easy?

Post # 942

Launching A NEW Industry Team.

I received the following question: “At our upcoming Retreat, where we will actually be together, I’m attempting to informally get a small group of about 8 attorneys that all do some work with Aerospace clients, into discussing whether we might actually form an industry group.  Any guidance on how I might approach these discussions?”

> I might suggest that you facilitate a discussion by going around the table with each of your colleagues asking the following sequential questions:

• Introduce yourself with some background information on why this particular industry is of PERSONAL INTEREST to you. 

• Identify the “depth” of your industry experience by providing EXAMPLES of the sub-industry clients that you have had the opportunity of working with. 

• What have each of us LEARNED about working with this industry that others around the table may not know, including any new developments or trends that you see emerging that may affect the players in this industry? 

• Identify and discuss what particular industry publications, newsletters and blogs you are each currently subscribing to or “REGULARLY READING” – and which publications are not included that could be regularly reviewed. 

• Identify and discuss what particular industry associations and trade groups you are each currently “ACTIVELY INVOLVED” in – and which we are not yet members of but could be, and what potential benefits might accrue from personal involvement. 

• What CHALLENGES do you or could you face attempting to develop new business in this industry? 

• Who, specifically, is your ideal, TARGETED CLIENT NICHE within this industry if you were to focus some efforts on attempting to build more of a presence? 

• What new threat, problem or obstacle are these niche clients facing and what could you DO, or have you done to help them overcome that difficulty? 

• How do these industry clients actually make money and what could you DO to help them make even more money? 

• What is it that you are UNIQUELY able to offer this industry that is of value, and that these prospects / clients may NOT be able to get from most other firms? 

• What is the one thing each of you are DOING that you believe is bringing in the most business? 

• Would there be any benefit to us in exploring further conversations together where we could focus our discussions on setting out action plans to have a real market presence in this particular industry? 

I will bet that the responses you generate with this last question will help shape what you collectively decide to do next