Are Your Law Firm Management Practices on the Verge of Obsolescence?

By Dr. Thomas J. Venardos

Obsolescence Begins With Deteriorating Professional Partnerships

There appears to be a trend, in some well-established law firms, that indicates partnerships are deteriorating because of management problems. More basically, few administrators or management teams have solutions to keep them from deteriorating. Many lawyers are leaving the more established firms to create their own firm or join others. More often than not, lawyers rarely remain employed with their established firm to manage their way through the problems by coming up with viable solutions. Few lawyers want to take partial responsibility for the problems, and would rather use the excuse of blame. This seems to be the easiest way to get out of the conflict and move on. Many times personal and professional accountability do not seem to be a viable behavior as part of the management solution.

Updating Management Solutions to Solve Professional Problem

First, it is important to admit there is a problem within the law firm. The earlier the admission, the better chance there is to resolve it. This is usually accomplished by internal surveys, looking at balance sheets, or using outside consulting services to uncover major issues. When problems are discovered a small management team should be assembled to strategize how best to attack them.

Second, once problems are identified, all employees should take responsibility for them and begin looking at solutions. Responsibility and accountability are critical and essential to solving problems. Some people feel like burying their heads in the sand, while others just want to run far away from the problems. Still others may deny there are problems. Your options are few: ignore them, deny them, or solve them.

Third, an objective person should be identified to help with the action plans and time lines which must be enforced to resolve these problems. This independent person should have the power to make things happen in a reasonable and timely fashion.

The Basic Problem Is People’s Unwillingness To Resolve Conflict

Nearly all problems in law firms can be traced back to people who tend to ignore or avoid interpersonal conflict. Therefore, it is extremely important to have managers and management teams who like people, enjoy being around them, and like to solve their problems. After all, there are many aspects to people that have to be balanced: personal egos, strong or dogmatic beliefs, different kinds of thoughts, and buried feelings. So a manager is, a manager of people first, and problems second.

Furthermore, the manager is dealing with a complex social structure. This includes people who have power because they have been in the firm longest. It also includes people who have the most access to knowledge-like computer data and office policies. And finally it includes people who bring in the most money and have the biggest client following.

Managers and management teams need to be trained in people skills-especially working with colleagues. They need to learn how to transition from being a lawyer to being a manager of people, which amounts to learning the skills of a professional psychological counselor. They are, in a way, responsible for the survival of the entire law firm. There is a need to learn better face to face communications skills and not think that others will change simply because they are asked to do so.

A few questions you might ask yourself about becoming more managerial should include different ways to address conflict. How do you approach others with the difficult problems of law firm survival? How do you deal with others’ feelings of frustration, anger, disappointment, and disgust? How do you make others become more accountable for their actions? How do you actively listen to personal problems and complaints and make it a real conversation with true professional outcomes?

Going To The Next Level Of Interpersonal Skills

Individuals can generally be classified into several groups in a law firm. Depending on the percentages you have in your law firm, you will need to work with them differently. Below is a partial list of groups that may exist in your firm:

Partners-owners of the firm
Associates-those climbing the ladder of success
Laterals-those lawyers coming from other law firms or a solo practice
Just out of school-new lawyers with a fresh twist on issues
Women & minorities-new types of lawyers with novel ideas and perceptions
Mature workers-new lawyers coming from other career areas, (e.g., business, education, health care)
Law firm professional managers-experienced business professionals in charge of law firm management and marketing activities
Age-tiered lawyers-lawyers coming from different generations: Xers (30 and below), boomers (31 to 54), war babies (55-60), and pre-war babies (61+)

This demonstrates the kind of diversity which can exist in your law firm and how difficult it can be to effectively communicate and manage such groups. To accomplish this task it takes a lot of patience, fortitude, and people psychology to be effective.

Forget The Way It Used To Be And Focus On The Way It Is Going To Be

There was a time when lawyers could say to office staff “I am going to practice law, and you take care of all the office matters.” Not any more! Now it is imperative for every lawyer to be a businessperson first, a people person second, and a lawyer third, otherwise the law firm could experience serious business problems which many times results in loss of clients, lawyers, and valuable staff.

What does this mean for the lawyers in the law firm? It means self-education that results in learning about business principles and concepts. They will need to learn where their firm is in the business cycle. They will need to learn to read a balance sheet. There is a need to know how to assign money to develop current training budgets for firm technology, marketing strategies, and professional development. Finally it is important for lawyers to learn about “people psychology.” This entails learning effective human communications, motivation, and socialization work skills.

Learning New Management Tools

Part of what attorneys and management teams should learn when dealing with colleagues is how to solve problems using organizational negotiations, professional conflict resolution schemes, and redevelopment structures with value center criteria.

Financial restructuring is critical. Placing an emphasis on re-training all attorneys is the key to developing effective marketing styles, improving use of non-billable hours, applying technology to be more productive, improved billing procedures, and learning cost effective law practice methods in this new age.

Compensation packages must also be overhauled since much of the success of the law firm is based on financial matters that include expenses, collections, client satisfaction, client referrals, and marketing strategies.

Don’t Try To Reinvent The Wheel

Both attorneys and administrators are guilty of this and most times it does not work. Everyone asks for it and many outside consultants and advisors promise it, but it still does not work. What is it? In a nutshell it is promising a quick and easy solution to an organizational culture problem that is very complex. Because it is complex it takes months or years to change. It takes much energy, sophisticated and experienced organizational knowledge, planning that includes professional commitment, and endurance.

Below is a list of items that you may want to avoid if you hear them from others. These are simple answers to complex problems.

All we have to do is replicate successful models of other law firms or businesses.
We can accomplish change in your law firm by having a seminar or discussion about the problems.
Let the consultants do all the work, that is why we are paying them.
Use computers and computer programs, it will do all the work for us.
Let the law firm administrator worry about the problems.
All we have to do is tell everyone to work harder.
We can let some attorneys go who are not producing.
Just use the results from the last consultant that are in that bound book on the shelf-it has all the answers.
We are only responsible for ourselves and not the others or the law firm.
Don’t listen to anyone, we have been doing it right for years.

Becoming An Effective Manager Or Management Group

Learn how to think and practice in group terms-what is best for the law firm?
Communicate at all levels-everyone should have the same information with no hidden data or information!
Delegate to various lawyers or self-directed work groups in the law firm the tasks that will follow time lines. Much work can be accomplished more quickly when this approach is used.
Identify and use concrete goals that everyone in the law firm understands. Management can then remind everyone of the goals as they are periodically measured.
Take time to listen to the firm staff. Being a sounding board can be advantageous when everyone appears too busy.

Assessing The Status Of Obsolescence In Your Law Firm

When you hear “we have all the right answers,” “we don’t have any problems in this law firm,” or “claim that what is being said today about change is inconsequential and irrelevant,” then beware of obsolescence. The consequences of this kind of thinking can be found in many of those ailing law firms that are stumbling into the twenty-first century, only to become very ill and die from lack of professional managerial attention because of their serious organizational symptoms. What are these organizational symptoms?

Below is a brief list of the major symptoms (check off the ones that apply to your law firm). By checking five or more of the following symptoms there may be a perceived problem of obsolescence in your firm. Further discussion with others in your firm is recommended to confirm real issues that need attention.

A lack of general exuberance about the law firm’s potential.
There is prevalent back stabbing among lawyers in the firm.
The right hand does not know what the left hand is doing.
Most people are going in their own direction without respect to others or the goals of the firm.
There is trouble meeting monthly expenses.
There is high turnover among staff.
People are apathetic about their jobs.
Pessimism prevails in the law firm.
Few people talk to each other, or greet each other in a pleasant fashion.
Blaming others for problems runs rampant in this law firm.
Partner relations are souring.
There is no firm leadership.
There is no clear vision for the firm.
Partner compensation is a major issue.
Sick leave by staff is increasing.
Micro-management is the primary style of managing people.

If you do believe that your law firm’s management practices are becoming obsolete, then you need to begin the process of correcting it. This needs to be done primarily by several of you calling it to the attention of everyone and beginning your plans for reconstruction. How does this work?

Admitting and identifying all the problems.
Being totally accountable for yourself and the law firm.
Getting credible and reliable financial data about the law firm.
Planning short and long-term strategies for the new management practices with the assistance of an outside source that you trust and comply with.
Sticking with the plan and altering it as necessary during its implementation.

A Final Word

You can be assured law firms that are serious about implementing positive change can do so. The results they get can be measured. These results are then translated into a successful law firm that can meet the challenges of the community and twenty-first century.

Dr. Thomas J. Venardos is an adjunct management consultant with Olmstead & Associates, Legal Management Consultants, St. Louis, MO, and President of Venardos Management Group, Organizational Performance Consultants, located in Albuquerque, NM. Dr. Venardos may be contacted by e-mail at tvenardos@olmsteadassoc.com.