In a Bloomberg interview last October, Citi's Dan DiPietro, chairman of the bank's law firm group, said that he maintained a "somewhat robust watch list" of firms in potential trouble, ranging from "very slight concern to oh my God!"
COGNITIVE DISSONANCE
Here's a summary:
Culture is important, but associates' productivity is a function of the hours they bill.
Culture is important, but associates face diminishing chances that years of loyalty to a single firm will result in promotion to equity partnership.
Culture is important, but lateral hiring to achieve revenue growth has become a central business strategy for many, if not most, big firms. It has also exacerbated internal equity partner income gaps.
Culture is important and, if a firm loses it, the resulting instability may cause that firm to disappear.
As you try to reconcile these themes, you'll understand why, as with other Hildebrandt/Citi client advisories, the report's final line is my favorite: "As always, we stand ready to assist our clients in meeting the challenges of today's market."
Steven J. Harper is an adjunct professor at Northwestern University and author of the forthcoming book, THE LAWYER BUBBLE — A Profession in Crisis (Basic Books, April 2, 2013). He recently retired as a partner at Kirkland & Ellis, after 30 years in private practice. His blog about the legal profession, The Belly of the Beast, can be found at http://thebellyofthebeast.wordpress.com/. A version of the column above was first published on The Belly of the Beast.
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NJ Librarian
Has the relationship between legal and non-legal staff been measured in terms of culture and whether or not the relationship has any effect on success?
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Mr. Scattergood
Business schools are not the reason for the failure of law firms. In business school, the students learn strategic planning methods where the focus is on the profitability in the long-term. The focus should never be on short-term profits. Lawyers are used to hiring experts for everything, so they think they are hiring a business expert when they pay thousands to one of these so-called consultants. In business school, students are warned about these consultants and trained how to scrutinize their information.
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