A wheelbarrow of frogs

The recent stories of senior City partners and their expenses are not very instructive, although perhaps we should not be so surprised – either at their behaviour or the reaction of their fellow partners. Lawyers are imperfect at the best of times.

What is far more interesting is what this says about managing partner risk in professional service firms, and in particular in law firms (we don’t share quite the same world view as accountants, architects and others).

The crux of the problem is the tension between a firm’s need to manage its partners and the fact that they are “highly educated individuals who require a large degree of autonomy and discretion to be able deliver very personal and highly tailored services to clients” – the quotation is from Too Many Chiefs, a study on decision making in professional service firms by Tim Morris, Professor of Management Studies at Oxford’s Säid Business School.

The problem with autonomy and discretion is not just the sense of ownership entitlement that so often accompanies them, but the risk of partners pushing boundaries when they can (and when they actually see them!). And to compound the problem, this type of behaviour is often culturally acceptable to fellow partners.

And going back to the expenses stories, don’t miss the on-line comments: I particularly liked this from Anonymous on the report in The Lawyer on Hogan Lovell and the allegedly errant Christopher Grierson,

The way that this has been dealt with, and the fact that the police have still not been involved, has simply confirmed my view of City firms as moral vacuums dominated by sociopaths.

I am not sure about the moral vacuum bit, but that anonymous commentator must surely have been reading a 2009 post by Venkatesh Rao (Venkat) in ribbonfarm.com, The Gervais Principle, Or The Office According to “The Office”, in which he identifies the “sociopath” layer as comprising ‘the Darwinian/Protestant Ethic will-to-power types who drive an organization to function despite itself’ and then states the Gervais Principle,

The Gervais Principle is this: Sociopaths, in their own best interests, knowingly promote over-performing losers into middle-management, groom under-performing losers into sociopaths, and leave the average bare-minimum-effort losers to fend for themselves.

So now you know.

And why a wheelbarrow of frogs? I once heard Nigel Knowles describe managing his partners as akin to pushing a wheelbarrow of frogs uphill in the rain.

A legal education

Loved this from a somewhat snide article in the guardian.co.uk, Making the would-be barristers of tomorrow face harsh realities of today

Undergraduate students to a large extent have unformed minds,” hit back Cambridge University professor Christopher Forsyth. “There is a danger of teaching them to advise before they have a mastery of conceptual thought.”

Same goes for quite a lot of lawyers.

And as for the jaw-dropping comment from City Law School associate dean Susan Blake,

The law is an attractive profession. And a success rate of one in 10 is a hell of a lot better than you get with the lottery

she clearly missed out on being taught by Professor Forsyth.

Countdown to a new dispensation

An interesting piece in this morning’s FT by Jane Croft, Legal firms set for ‘Tesco law’, based on a recent survey by Smith & Williamson on whether, and to what extent, the top 100 law firms will use the deregulation of the legal services sector to raise external finance.

What is clear from this survey is that the top end of the legal market is preparing to take advantage of the Legal Services Act and, if the rumour mill is to be believed, so too are the external providers – whether Tesco, the AA etc. None of this is surprising.

But what about the “squeezed middle”? (Not mentioned by Smith & Williamson).

In my previous Lawslot Redux post, now six months old, I said that in the hurly-burly of practice it is sometimes difficult to take time out to think about what may be needed. I might also have added that the current economic environment is making fee earning work an imperative (no time for posts).

Yet as Giles Murphy of Smith & Williamson notes,

The provision of legal services will change radically in the next five years with consolidation, external capital, new entrants and mergers with other professions; those who are best prepared will be in a strong position to take advantage.

He is talking about using external finance to develop and grow faster than your rivals. And competitive advantage may be obtained in any number of other ways – but I am not convinced that the profession as a whole has yet come to grips with what the Legal Services Act will actually mean for us day-to-day. It is going to be an interesting run up to October.

Even turkeys know Christmas is coming

In The end of inevitability Jordan Furlong challenges the legal profession to think about its future. In a few short paragraphs he identifies the key issues that will shape how law is practised in the future. And it is not just that there are profound changes happening in the relationship between lawyers and their clients, but that it seems most lawyers are simply not aware of them.

It is a sobering post. For Furlong, it is that almost complete lack of awareness of the legal profession that is the real issue,

The one thing that concerns me most, as an observer of the extraordinary change in this marketplace, is that the majority of the profession has no idea what’s coming. Most of the lawyers with whom I’ve dealt over the past several years simply can’t envision a world where lawyers aren’t considered essential to the social and economic fabric. They might recognize that times are tougher and costs are rising and prices have topped out and clients are more demanding. They might be resentfully aware that providers outside the profession are entering the market with lower-price offerings, and they might grudgingly accept that technology allows things to be done faster and cheaper than they used to be. But they’re not putting it all together. They’re not following this road to its conclusion, because they can’t really see how the world could get along without us. The inevitably of lawyers is our fundamental precept, and it has become a mental block.

This is as true in the United Kingdom as it is in North America.

It is certainly difficult in the hurly-burly of practice to take time out to think about what we need to change to stay in the market; and the very fact that we are busy is itself a problem, because it allows us to think that things are, after all, OK: change is not something any of us are that eager to rush into. But choosing to ignore the problem won’t make it go away, and the clock is ticking. And just as Furlong ends his post, ” Lawyers should know better than anyone else what a ticking clock sounds like.”

Twittering the Billable Hour

Why am I on Twitter? The family have stopped asking, and just accept that although I long ago got rid of my BlackBerry and obsession with emails, this has been replaced by an equally worrying (to them) interest in Web 2.0: Twitter, FourSquare, Spotify, Feedly ~ to say nothing of FB and LinkedIn.

It is always easy to justify one’s peculiarities (not least as to you they are not peculiar at all) but lately I have been giving some thought as to whether Twitter is really of any value, other than to boast about my homegrown asparagus. I am quite sure that it is. For me its value lies in the links I find. These may be to legal or management articles or blog posts, be about current affairs, or, very close to my heart, bird sightings. And all delivered (usually with a little help from bit.ly) in 140 characters.

The result is that I have access to an enormous range of thought.

A very good example was a tweet by Patrick Lamb (@ValoremLamb) yesterday, which took me to the Law Society of Western Australia’s website – and ultimately allowed me to download The Chief Justice of Western Australia’s address to the Perth Press Club, “Billable Hours – past their use by date”, given on 17 May to launch Law Week 2010. It is an excellent analysis, given, as the Chief Justice admits, “with a view to stimulating interest and debate, which may in turn accelerate changes which are already evident in some parts of the profession”.

You need to read the speech for yourselves (it’s a pdf on the website). It is pretty even-handed (what would you expect from a lawyer?) and he sets out both the advantages and the disadvantages, which will be familiar to most lawyers here and there. But one particular paragraph caught my eye:

Focuses on hours, not value

Time costing focuses the efforts of the legal practitioner upon the production of billable hours, rather than the production of value for the client. It rewards efforts and not results, promotes quantity over quality, repetition over creativity.

There is quite a lot more like that, but even though the Chief Justice accepts that “time billing has a place in legal service charging” he is quite clear that there are other methods “which encourage efficiency and better allocate risk”.