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It’s been a prosperous ride for many large and multinational firms, but recent survey findings from legal marketing guru Larry Bodine and others suggest it may be coming to a halt. After years of paying soaring rates, clients, he says, are “pinpointing” small and midsize firms offering more personalized and localized service at lower rates. See http://legalmarketing.typepad.com/blog/2005/11/convergance_is_.html. Not so fast, though. Midsizers still operate in a buyer’s market in which client (and attorney) loyalty can turn on a dime. Fierce competition has seen the best firms innovate in order to show something energizing and authentic, building intense trust and new loyalty. The paradigm for successful law firms of the future is emerging in the form of culturally astute and team-focused organizations that also focus on client needs. The timing for client-minded, culture-driven legal services couldn’t come soon enough. “Attitudinal factors” ranks among the most important management practice issues for today’s midsize law firms, according to consultant Joel Rose. See www.joelarose.com/articles/competitiveness_profitability.html. The conventional picture of law firm staff and associates competing to reach the next rung of the ladder and fawning over their superiors is vanishing. Instead, many practitioners entering the field, and many women in particular, consider the style traditional to older and larger law firms a cultural wasteland. Consider the signs recently discussed by the Wall Street Journal and the New York Times. Partners no longer are valued for making the inner circle, only for pulling their weight in terms of productivity and profitability. Associates are second-guessing their billability-focused careers and are leaving their posts at rates never before seen. Even prospective lawyers seem disenchanted, as evidenced by this year’s decline in law school applications. See http://online.wsj.com/article/SB114652612118940925-search.html?KEYWORDS=Law+firm+life&COLLECTION=wsjie/6month; and http:// select.nytimes.com/gst/abstract.html?res=F00A17FB3F5A0C7A8CDDAB0894DE404482. Today’s “Goldilocks” firms-not too little, not too bureaucratic-have what it takes to be pacesetters when it comes to building better office environments for staff, attorneys and clients alike. Remember the old real estate sales mantra, “location, location, location”? The battle cry of today’s successful midsize firms is “culture, culture, culture.” There are several law firm cultural “flashpoints” midsize firms can focus on to better set the tone for a more sustainable and authentic future. In terms of physical space, for example, a creative partnership thinks about how to break down barriers between attorneys and staff, not create them. The private office suites common within historic law firms are impressive, yes, but what do their great expense, size and isolation communicate to others? The fact is that clients can judge a law firm’s service approach even before meeting a lawyer simply by observing the interactions between administrative and staff members. What most favorably impresses clients is whether they feel welcomed and appreciated by the entire firm from day one, not the size of the office or the art on the wall. Midsize firms can gain a leg up on larger, multiple-office firms by making an office environment ergonomic to clients. Sure, cross-continental offices offer nice benefits, but without a central nervous system tying everyone together, it’s tough to build a culture of excellence. If a prospective client gets a sense from staff that the firm is trustworthy and a great place to work (you know-motivated and exciting people hanging around together accomplishing great things), it speaks volumes more than a nice brochure. Firms should allocate real dollars to this and make sure the staff members focus on what they are accomplishing together, not what they will be doing after work. It’s hard to believe in a law firm that has no plan beyond this month’s or this year’s numbers. Firms should ask themselves what they stand for-what do they want the outside world to think about them. While strides have been made in this area by all sizes and shapes of legal services, most firms still struggle with planning simply because it is hard work coming up with a firmwide plan-as opposed to a short-term plan that helps the partners pay their mortgages. But firms can’t expect employees, associates and others to believe in a place they know nothing about. Younger, growing firms have a tremendous opportunity to involve staff at all levels in planning processes, improving upon the practices at older law firms that might be rooted more in legacy, tradition and habit than modern business needs. The real chance to engage various practice areas and cross-fertilize ideas can be highly transformational. Take legal marketing, for instance-an area that midsize firms have helped reinvigorate after trying new approaches and finding that they sometimes worked. Clients can’t be expected to understand what a firm is about, and what it wants to become, unless the firm itself knows and clues them in about it. Law is more than a collection of hours strung together in hopes of a good result. It can be a higher calling and a service to the community. Firms ought to be prepared to explain how they meet that aspiration. The same applies to workplace diversity-partnerships should be willing to take chances. A diverse work force is not built for free and certainly doesn’t happen accidentally. It is hard work trying to understand someone who grew up within a different cultural background and who relates to clients differently; that doesn’t mean he or she isn’t a great lawyer with tons of potential. Moreover, diversity is much more than simply the right thing to do. It’s amazing how it breeds strong office culture, which in turn breeds excellence and innovation with clients. It is well known that corporations are factoring diversity into their law firm hiring and retention strategies. It’s an issue resonating with clients and those outside the profession. In that way, diversity can be about rich communities and client service, and in the end it can lead to a competitive advantage and trustworthiness. Firms are well advised not to wait, but to get to work building a diverse team. Creating a monster Got a $1 million book of business but treat staff and associates poorly? It can take only one partner and one day to destroy years of effort to build strong client relationships. Just ask Hill & Barlow, Shea & Gould and other firms that went under after years of success. If that sort of implosion can happen at large, established firms, it certainly can happen to younger, midsize firms. Firms should be careful not to create monsters by supporting the greedy, arrogant law firm persona well understood by most people. This occurs not only when firms improperly hire and manage staff, associates and even partners, but also if they mismanage nonhuman resources-money, perks, recognition, mentoring and access to special events. Too many compensation practices (monetary and nonmonetary) convey the wrong message and need to be rethought. Take, for instance, the concept of origination credits. Some firms have struck cultural gold by thinking beyond merely rewarding attorneys for individual business generation. It’s not about who brought in the file. It’s about whether the client is being looked after diligently and whether a team of service is being created around the client. Law firms today must regularly exhibit transparent behavior and ethics, especially when it comes to leaders who set the tone. Enough with excusing bad behavior because a partner is bringing in cash in the short term. Firms that people-on the inside and outside alike-stick with have earned that respect. Firm managers who insist on a collegial atmosphere will sleep better at night, and the firm will make more money, too. The new law firm is not in la-la land concerning profitability. To the contrary, having a positive culture is largely about having a successful business in the long term. Partnerships should keep talking about their economic goals, partner compensation tiers and whatever else will keep participants communicating about their reward system. The more communication the better, as long as it fits with the rest of the picture. A compensation system that doesn’t mirror the values and goals of the firm is not a compensation system that works, at least not long term. Midsize firms usually are more accustomed to pooling resources within various sectors of the firm, and as such should have easier times than many larger partnerships in fostering this widespread dialogue. The results of these discussions can be surprising. Some firms, for instance, may find that attorneys are less money-focused but crave flexibility or work-life balance. Other firms may find a strong interest in a specific benefit they hadn’t considered before. The only way to learn is to get it all out on the table. Why is this reappraisal happening? Because people, including clients, want more value. Partnerships should look for specific ways to methodically tap into this sentiment, including direct client communication over service expectations or client surveys covering key perspectives. Marketing research has long been the starting point for corporate marketing strategies, but for some reason has largely escaped the law firm setting. Midsize law firms must develop set structures with client service in mind or risk losing what can be a competitive advantage. Client phone calls should be returned immediately, or steered to alternate contacts such as a knowledgeable associate. This takes teamwork and communication, but also an intentional system of standard operating procedures. Managers shouldn’t forget that many of their clients were employees of private firms for years. They know the routine and many left for a reason-their values did not match those of the law firm. If nothing else, successful midsize corporate law firms recognize that sentiment, and will provide a service that is needed, valued-and sustainable. Succor on the career path Every professional needs a career path, and it’s never too early or late to start. The No. 1 reason associates leave firms is lack of career planning offered. No matter where they stand in the organization, attorneys and staff alike need to know what is expected of them and how they can improve. Attorneys who feel undervalued or overused need to talk to the firm and make sure that they’re being invested in and that their talents are considered at every stage of the game. Midsize firms should want to address this issue head on-something larger firms seem to struggle with. The business of law, after all, is not just about making partner. While a meaningful goal, making partner is simply an indication of a lawyer’s progress in the business of perfecting his or her skills and serving clients. More important is what comes next-the week, the month and the year after that. Lawyers who don’t have an agreement with their firm about that need one. It’s no secret that technology is rapidly advancing, offering a competitive equalizer for midsize firms able to efficiently transform their systems. It also creates an important opportunity to enhance the lives and careers of attorneys and employees. Midsize firms preaching flexibility, for instance, can take advantage of state-of-the-art Web and video conferencing capabilities for remote and home-based setups. However, they should be sure to support these systems with proper overhead and technical expertise, lest they wind up in virtual insanity. Technology should support culture, not the reverse. As discussed, the closeness of midsize firms offers a lot of value, and is something that could be easily cut off by sometimes cold and distant conferencing styles. Early adopters who make this kind of technology investment would be wise to make sure that employees use all available resources to get on the same page. In short, midsize firms competing on the basis of their work environment would be smart to always be looking for the next thing. A static culture is a devolving culture. There is no such thing as permanent law firm cultural nirvana-just meaningful celebrations along the way. While it sounds silly, it really is the journey that counts, not the destination. Firms should take risks and explore options that keep colleagues open to new people, new clients and new ideas. In some significant way, that may be one of the primary differences between growing midsize firms and the ones being left behind-a commitment to restoring trust in law firms and an obsessive passion for reinventing the practice of law. Keith Halleland is founder and shareholder of Minneapolis-based midsize firm Halleland Lewis Nilan & Johnson, where he co-chairs the health law practice. He is founder of the firm’s affiliated consulting company, Halleland Health Consulting. He can be reached at [email protected].

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