I’ve noticed a common thread in my recent discussions with law firm leaders, and it all relates back to the core founding principle of most law firms: partnership.
Conversations about the evolving legal industry inevitably lead to how much firms are able to change, and how quickly. And with that come discussions about balance. How far can firm management really push their partners when, after all, they are partners?
The dictionary has a special definition for partners by law, noting they are people “associated with another or others as a principal or a contributor of capital in a business or a joint venture, usually sharing its risks and profits.” But just how much are they sharing in the decision-making? And when a new model of law requires more businesslike (read: cutthroat) decisions, sharing equally in those risks and rewards becomes almost untenable.
My sense is that many firm leaders, whether it be at the top of the Am Law 100 or the bottom of the Second Hundred, are genuinely struggling with this issue. Some may also be using it as a shield to protect against having to make the difficult changes the industry (and their client base) requires.
I have to admit I would often roll my eyes at the constant refrain of how important culture was at a law firm. All that seemed different in the descriptions, after all, was the firm name. But I’ve come around to believing there is some truth to how much culture can seep into the business functions of a firm. Many firms attest to leaving profits at the door as a result of decisions based on culture and commitment to partnership (though PPP growth may not back that up).
All this is to say that I wonder how much partnership values and culture are protecting firms and how much they are hindering efforts to adapt. This issue of The American Lawyer is flush with examples of how firms are trying: trying to differentiate themselves and grow among their Am Law 200 competitors; trying to improve diversity within their walls; trying to manage their offerings and staffing to economic realities, real and prospective; and trying to decide whether to merge or grow organically.
Would those efforts be easier if the partnership model wasn’t in the way? Or are the firms that are holding onto partner values doing themselves a favor by protecting against things like one anecdote I recently heard about a firm whose partners all took a pay cut to bring on a lateral at a guaranteed price. (That story makes all-partner votes on what brand of coffee to buy sound attractive.)
There are no easy answers to any of this. I think the next generation of lawyers, hailed as the ones who will bridge gaps in technology or work-life balance, could equally help move firms to a more businesslike environment. But will that require also moving away from the LLP to some other model? A bigger acceptance by the general partnership that not all partners are created equal? Or a greater willingness by firm leaders to do what’s best for the organization rather than the individual partner?
There are no simple solutions, and balance is often the best approach. In the end, maybe it’s culture that will truly end up differentiating firms after all.