Managing Firm Culture

As firms continue to grow and increase their geographic footprint, one of the concerns that many firm leaders have is around preventing “cultural disintegration.”

A couple of years ago while engaged with assisting firms with their merger aspirations, we noted that law firms did not seem to have a common basis upon which to easily discuss, compare, or work out any significant difference with their respective cultures. Our investigations led us to the doors of the University of Michigan and the work of Dr. Daniel R. Denison, who has gained notoriety for his work in the area of organizational culture. We subsequently partnered with Dr. Denison in the creation of The Cultural Performance Inventory.

Dr. Denison found that an organization's culture is, in many ways, similar to a human personality. Culture is not only the presence or absence of certain traits but how those traits interact with each other. The concept of a law firm culture covers four aspects:

• Involvement - the importance the firm places on building the capability of its professional and support staff members; the value that the firm places on a team orientation as opposed to individual accomplishment; and the ownership that people feel in the organization.

• Adaptability - a firm's ability to understand the demands of the business environment and translate it into action. This trait reflects how client-focused the firm is; the degree to which it is willing to not only accept but initiate change; and how well it learns from its successes as well as its mistakes.

• Mission - the degree to which the firm defines a meaningful long-term direction for the organization and works to achieve understanding and support among both its professional and support staffs. This also recognizes whether there are clearly expressed expectations of performance, work ethic and capabilities.

• Consistency - The presence of core values that shape the firm's identity and expectations, the enforcement of those core values and the manner in which decisions are made and disagreements resolved.

Simply identifying cultural traits is of little value to the day-to day operation of a your firm without having the ability to specifically distinguish the degree to which those traits are present and having a means of comparing cultures among firms or even within your own firm.

This resource provides a diagnostic tool that allows you to administer a behavioral questionnaire to an entire law firm or even a sample group. Participants answer questions about issues that directly relate to the traits that identify their firm's culture. The survey is taken through a dedicated Web site and takes only about 10 minutes to complete. The results of the responses are then compared to a database of responses received from more than 40,000 participants in more than 1,000 different business organizations. A firm's results, in each of 12 categories are then compared to the database to establish a percentile score. The scoring is shown graphically to enhance communication and permit comparisons. The results can be segmented by practice group, office, partner, associate, staff or by virtually any other identifiable criteria.

That said, the exciting part of all of this, is not so much the raw data that this Inventory provides, but what you can do with that data.

If you might imagine surveying all of your people prior to the Partner’s Retreat (which can be either just partners – or right down to the staff levels), when people then gather at the Retreat itself, they can spend part of a morning examining that data (in all of it’s various configurations and permutations), discussing the implications, celebrating where the firm may have scored exceptionally well; and also identifying where the firm may have scored below their collective expectations and what factors would have led to that result.

Now the important part of the entire exercise is in having the participants identify those issues that may be worthy of remedial attention – because we can then have the participants spending the afternoon, in small breakout groups, working on those specific issues, and coming up with suggested action plans designed to improve your firm’s performance in that designated area. Depending upon the overall size of the group involved, we would usually complete the afternoon by having partners sign on to devoting a bit of their discretionary non-billable time, to helping implement some of the many good ideas and recommended action plans that were generated during the afternoon.

It is also important to recognize that different levels of group members view a firm's culture differently. When the results of a cultural inventory are segmented by partners, associates, staff administrators and directors and general staff (paralegals, secretaries, etc.) it is often found that the staff administrators and directors view the culture as being stronger than any other level of group member. The next strongest is usually the senior level of partner management (managing partner, members of the executive committee, practice group chairs, etc.) followed by partners, associates and staff, in that order. Therefore, a firm that attempts to understand and measure its culture only through the eyes of its most senior management risks observing a different culture than is seen by the overall firm.

I believe there are a number of very tangible benefits flowing from this sort of initiative:

• The exercise (described above) allows you and all of the partners to define what differentiates your firm’s culture and take constructive action on correcting or modifying any behavior or activity that may be leading toward “cultural disintegration.”

• Rather than rely on words like "collegial" or "democratic" this instrument gives you a very tangible way to describe and provide evidence of your culture to prospective associates, lateral partners and even to clients.

• It was interesting for us to observe one of the law firms that utilized this Cultural Inventory subsequently scored among the highest satisfaction in an AmLaw Associates Survey – a dramatic improvement from the year before.

• Finally, Denison’s research shows that there appears to be a very direct correlation between certain aspects of a firm's culture and its bottom-line performance. In fact, as a general statement, firms that have a strong positive culture tend to be more profitable than those that do not. This is not illogical, given that a strong culture implies a uniformity of beliefs and assumptions that would naturally lead to a coordinated effort.

I am happy to explore this in more detail at any time should you think it worthy of further consideration.


Measuring A Firm's Culture (article)

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