Although lawyers are trained to make arguments, when it comes to management most avoid conflict like the plague. A typical thought process among partners is, “we don’t agree on that issue, so why bother talking about it again?” A managing partner can get away with avoiding decisions on tough issues when lawyers have plenty of interesting legal work to keep themselves busy and incomes are increasing handsomely every year. But when work slows, incomes drop, and other opportunities present themselves to rainmakers, major disagreements come to the surface and threaten the success—and even survival—of the organization.
This fundamental lack of decision-making is rooted in how law firms organize themselves. Changing a compensation system or management structure or investing more resources in one practice than another typically causes substantial unhappiness and turmoil. Add the fact that shareholders expect a high degree of input on big decisions, and it’s no wonder that managing partners do what seems like the easiest thing: nothing.
Not deciding, of course, is a decision in and of itself. And law firm leaders vastly overuse it, believing they would rather pay later than pay now. But those who are successful in navigating their firms through major changes do so by shining a spotlight on the idea that the ultimate price of continued avoidance is greater than the near-term price of a couple of tense partner meetings. For example, it can (and often does) result in rainmakers being lured to competitors by better offers, further diminishing the firm’s revenue.
To create this spotlight and initiate real change, two things must happen. First, the management of the firm needs to create a common understanding of the firm’s current situation by having all partners review and discuss a summary of key performance data. Second, partners must be allowed an opportunity to provide input into about the strategic direction they believe the firm should take.
By taking a comprehensive and honest look at the firm’s financial situation and its outlook for the foreseeable future, then systematically soliciting input from the partnership, management can make the changes necessary to keep the ship afloat. More often than not, this process only happens when a decision is forced—a merger offer, for example. Ideally, however, firms will be engaging in this process on at least an annual basis. That way they can drive change rather than have change drive them.
John Childers understands the decision-making challenges within organizations of all sizes and offers his clients a highly developed expertise in group facilitation. Reach him at email@example.com or at 310–347–5329.