MEASURING VALUES

In a recent NY Times column, David Brooks wrote about the future of our nation, but one observation applies to big law:

“In a world of relative equals, the U.S. will have to learn to define itself not by its rank, but by its values. It will be important to have the right story to tell, the right purpose and the right aura. It will be more important to know who you are.” (http://www.nytimes.com/2010/12/14/opinion/14brooks.html?_r=1&ref=opinion)

Large law firms, too, have become a world of relative equals. That has been an unintended consequence of the transformation from a profession to a business. In pursuit of rank, too many managers rely on B-school-type metrics — billings, billable hours, leverage ratios — as definitive measures of worth. They use them as substitutes for independent judgments based on values that are less easily quantified.

Behavior follows incentives. Partners jockey for internal position and managers focus myopically on short-term profits. They believe that favorable Am Law rankings will distinguish them but, Brooks argues, similar thinking would be a mistake for our country over the long-run.

It’s equally true for big firms. High-paying clients assume that only the best and brightest lawyers will work on their matters. But to attract and retain those attorneys, even the self-described top firms will have to offer more than money. In that contest, values will separate the biggest winners from everyone else.

Of course, in the very short-term, top graduates respond to the urgency of school loan repayment schedules. But as the novelty of a steady paycheck fades, the superstars will yearn for something else. They’ll understand that a firm’s “make more money” mantra limits its vision. For most, it fails to offer long-term career satisfaction. Indeed, the prevailing model doesn’t even contemplate long-term careers for the vast majority of new hires.

The most ambitious and talented new graduates are already beginning to understand the game. As greater knowledge of what lies ahead empowers students to make better decisions, firms viewing their own missions merely as maximizing this year’s equity partner profits will lose the values contest for the next generation’s talent. It won’t happen this year or next, but it will happen.

What are the winning values? Here are some suggestions:

Resisting the deceptive simplicity of short-term metrics. Embracing efforts to shed light on a troubled business model. Requiring decency in all human interactions. Punishing bullies. Providing young lawyers with mentors, training, and opportunities because even the best internal programs are no substitutes for the real thing. (Pro bono programs can help as they advance other important values.) Creating a reality that matches more closely students’ prelaw expectations of what being a lawyer would mean.

Offering realistic prospects for long-term careers. Without tolerating mediocre performers, implementing decision-making processes that minimize the impacts of internal politics and clashing personalities in determining the fate of human beings. Providing meaningful and candid reviews while also jettisoning arbitrary barriers that the leveraged pyramid model imposes on equity partnership entry. Advancing all who deserve promotion.

Conquering the billable hour and its death-grip on associate compensation. Finding a way to measure attorney productivity that rewards those who complete a task efficiently — and penalizes those whose long hours produce big client billings based on diminishing (or negative) returns.

To secure their firms’ futures, thoughtful partners will accept modest reductions from the staggering personal incomes that they’ve enjoyed in recent years. Those willing to make the investment will reap great dividends. Large firms depend uniquely on the wisdom, judgment, and intelligence of their attorneys. The best new graduates will flock to firms cherishing values consistent with a satisfying career, even if it means less money (although in the long-run, it probably won’t).

As for the rest? Much of big law will continue pursuing the highest short-term dollar — wherever it is and whatever its cost to others, their institutions, or the profession. Such is the power of greed. But those who measure everything they value risk creating an unpleasant world in which they value only what they measure.

One thought on “MEASURING VALUES

  1. Once again, you introduce a much-needed voice of humanity into the chaotic law-biz evolution debate.

    I bet it would be interesting if BigLaw partners were to answer a simple question honestly: “Do you feel like a partner?” Not, “Do you feel like an equity shareholder,” a purely economic consideration, but “partner,” which is an emotional one.

    As for creating legitimate career paths, I can’t help but invoke the IT industry’s solution. In an earlier career, I spent most of ten years recruiting in IT and, as a result of that experience and the past twenty years coaching lawyers, I’ll posit that lawyers are similar to programmers, system analysts and engineers: they’re scientists at heart. Many enjoy the science of IT or law more than they enjoy the business of IT or law. In my (admittedly unlettered) observation, they seem to share appreciation for the intellectual rigor, the rule-based reasoning, the innate orderliness of the underlying discipline.

    The parallels continue as programmers and lawyers each become proficient in their respective science. To increase their responsibility, income and stature, both must add additional capabilities and contributions. Often, that takes the form of task- or matter leadership, progresses to leading a project or case, and then to where one is mostly managing people. Such an evolution satisfies the need for career advancement, but many who retain their love for the science dislike the degree to which such advancement increasingly removes them from it. “I like writing code.” “I like practicing law.”

    By “the IT industry,” I refer to the companies who create, sell and support technology — not the companies who are consumers of technology. They are analogous to law firms vs. corporate law departments.

    IT’s answer was, after someone established themselves as credible in the core technology, to offer three primary paths: technology development, marketing and sales, and management. Within each of those, there are degrees of management, etc., but the point is that a hard-core techie can remain such for life and be valued, compensated and appreciated. He’s not compared to the marketing/sales folks, nor expected to be one part-time. Likewise, he’s not expected to run the team, department or company along with accomplishing technical goals. Some techies like that combo, but if you don’t, you can remain a purely technical producer for life.

    Law firms need similar division of labor.

    IMHO, the current arrangement, in which lawyers, particularly partners, are expected to practice law, generate business, manage clients, help run the firm, and develop young talent — is patently insane. No one has that many skill sets or energy, or could possibly be sufficiently interested in so many different disciplines. In some ways, this structure not only serves lawyers and firms poorly, but insults everyone who is a true professional in any one of these disciplines, suggesting as it does that any dilettante can perform them credibly without training or experience.

    Would you allow a dilettante surgeon, squeezing you in between three other, unrelated tasks, to cut you open?

    The Gallup Organization’s research into employee satisfaction shows that the number one satisfaction criterion is being good at one’s job. How simple is that? People want to be good at what they do. When they’re not, they’re anxious and unhappy. They further showed that the only successful model is aligning people’s jobs with their strengths. Until the law biz starts moving down that road, they’ll struggle to make much progress against the current malaise.

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