Here’s one of those Evergreen Topics beloved of management consultants and publishers, and since I’m both it’s irresistible.
Better yet, the table is set by the always-worthwhile Alex Novarese, editor in chief of Legal Week, in his current weekly column, “The legal profession’s dirty secret…it’s still a profession”.
So yes, that’s the Evergreen Topic: Are we a business or a profession?
Here’s how Alex introduces the topic:
In many minds it was decided years ago that the legal profession is that only in name, having long since abandoned professional status in any meaningful sense to become a business. The reasons for this conclusion are so obvious – expansion, financial transparency, adoption of modern management practices etc – that they barely need recounting. And, like most cliches, it became one because there’s a good deal of truth in it.
And, yet, the longer I observe lawyers and law firms, the more convinced I become that the law remains basically a profession – rather than a business in the sense that many understand it. The outward changes that made people think of law firms as businesses were significant shifts but, in terms of the underlying ethos, they have had a surprisingly cosmetic impact. The mindset of a profession, good and bad, largely remains.
Of course, the dichotomy is more emblematic than real, and the more deeply you probe the more the distinction seems strained.
Understand: That is not because the two are similar, allied, or even kissing cousins. They’re not. It’s because, slice it how you will, lawyers are in charge of law firms, and organizations reflect the personality characteristics of those in charge.
For better or worse, and I’m a devout believer that it’s for better, law firms are increasingly subject to market forces. It’s not that they were ever immune, but in the quieter decades of Institutionalized Clients For Life, the waves of market forces were gently lapping at the beach and weren’t crashing surf beating noisily and showily against the rocks and sand (the rocks and sand ultimately lose that fight, and although it can take time, the outcome is foreordained).
But back to lawyers and their personalities. Alex astutely notes, and I have long believed to my core, that the years and years devoted to the long selection process works in ways intended and unintended.
On a personal note, faithful readers will know that I majored in economics as an undergrad, and also did the coursework for the MBA at night at NYU’s Stern School of Business while I was working as a securities lawyer at Morgan Stanley/Dean Witter. Full disclosure: Yes, I fell short of the formal degree. What can I say? Life happens.
What I’ve learned from that academic training, and in the school of life – having started two companies – is that “thinking like a lawyer” is antipodally opposed to thinking like an entrepreneur.
How so?
Let me count the ways.
Present a law firm with a new idea and the first reaction is, “Who else is doing it?” (We’re deathly afraid of being first.)
Present a business with a new idea and the first reaction is, “I hope no one else is doing this.” (We desperately would like to be first.)
Serendipitously, for those of us who can’t get enough of this stuff, the current Fortune has a cover story, “What Happened at Pfizer,” on the downfall of Jeff Kindler, their quondam CEO who was not only a lawyer but a Supreme Court clerk, a star litigator at Williams & Connolly, a star at GE where Ben Heineman recruited him, GC of McDonald’s at age 40, and then GC of Pfizer before becoming CEO. But you can’t take the lawyer out of the man:
From the moment he entered management, Kindler was marked by two traits. First, he remained a confrontational trial lawyer: He sought knowledge through interrogation; he was skeptical of what he was told, even when it came from people who knew far more about a subject than he did; and he bored in relentlessly on small details, always searching for the sort of nuance that could make or break a legal case — but seemed trivial in other contexts. The second: For all Kindler’s talents, he remained palpably insecure, acutely sensitive to anything or anyone he feared might undermine his standing. Some years later, after Kindler was named CEO of Pfizer, a CNBC reporter asked him on-air whether “a guy who sold chicken” — Kindler — was qualified to run a pharma company. He didn’t talk to CNBC again for more than a year. (emphasis mine)
Sound familiar? These may be fabulous and necessary skills for a gifted litigator, but they have no place in the boardroom business whatsoever.
They also evidence another trait which may drive high performance as a zealous advocate but which are pure caustic acid in a business environment: “[Kindler was] a person who agonized over decisions even as he second-guessed everybody else’s actions.”
You second-guess everyone else when you have low levels of trust, and you agonize over decisions when you’re insecure. (Going into attack-dog mode, which Kindler repeatedly did according to the story, is also an expression of insecurity.)
Then there’s an almost perverse inability to set priorities. When one is an omnivorous information consumer, everything matters. (But everything doesn’t matter.)
Still, with Pfizer floundering, Kindler turned up the heat on his deputies even higher. He bombarded them with long BlackBerry messages filled with questions at all hours of the day and night. He regularly scheduled conference calls on weekends. He seemed oblivious to executive vacations. He expected immediate responses to his questions, making no distinctions between urgent matters and routine ones.
All that didn’t just make life miserable for Kindler’s team; it also clogged the company’s decision-making process. Kindler was a voracious consumer of information — often a strength but increasingly a weakness. “Jeff heard something or read something,” one former HR executive recounts, “and there would be a barrage of e-mails in the middle of the night.” The next morning, staffers would have to divvy up the directives. “It was triage.”
Sound like any partners we know treating associates badly?
But rather than pursue the Manichean compare/contrast game, let’s itemize some of the ways in which “professionalism” and “business” might converge.
- Quality: Without question, impeccable quality gets you a seat at the client competitive bakeoff table. And depends upon a high degree of professionalism. At the level readers of Adam Smith, Esq. are playing, quality is not a differentiator; or, to put it more bluntly, clients can’t tell the difference between 99.5% and 99.9%.
- Client service: Professionals should (rightly) take pride in client service, but businesses also know it’s far more often than not the key differentiator. If you don’t “get” client service, think about it by inverting the perspective: What do you expect from lawyers junior to you within your firm?
- Great lawyering: Sure, comes with the territory. Not a differentiator.
- Responsiveness: A start, still table stakes
- Friendliness: Now we’re beginning to get somewhere
- Humanity, self-deprecation, irony, a touch of sass, self-awareness, resilience in the face of setbacks, genuine interest in you: These are the keepers.
- You’re the “client” of those junior lawyers and you know what you respond to. Why do you think your clients are any different?
Unfortunately, that about exhausts my impoverished imagination about the intersection of business and professionalism, with one seminal exception:
Economic strength–business strength–is a prerequisite to embracing the highest standards of the profession.
Corner-cutters rarely come from the highest ranks, and stark monetary necessity can be the mother of many inventive professional evils.
So are lawyers as a species ever going to be great businesspeople? I have my doubts–as does Alex.
Try the following thought experiment (again, imagining attitudes towards an innovation). Would the word “lawyer” more credibly substitute for “pessimist” or for “optimist” in the following quote? And same for “businessperson? Substitute it for pessimist or for optimist and have the sentence still scan credibly?
“Pessimists see the difficulty in every opportunity; optimists see the opportunity in every difficulty.”
— Churchill
I’m afraid I rest my case.
Does this bode well for UK firms facing the arrival of the Legal Services Act? Just a question.
A regular reader writes:
In consulting engineering, we do two quite distinct types of work. One I will call “extension of staff”: we provide additional resources to Clients, usually junior with some supervision, to undertake tasks that could be done by company-hired staff. The work is undeniably important to Client, but routine, at least for the most part. Client prefers to outsource this type of work because it is cost effective to do so: the overhead costs for the engineers/scientists doing this work are the responsibility of the engineering firm (and for a variety of reasons are probably lower), and there is greater flexibility left with Client. This is cost-plus contracting on an hourly basis, and because engineering firms mark up their junior staff at a proportionally much greater rate than they can do for Principals, the “extension of staff” work is the main economic engine of most engineering consulting businesses.
Quite separately, there are projects or tasks that are very far from routine. Client senses that there is an issue – might be a risk, might be an opportunity – but does not have the training, experience and insight to even fully define the matter, much less work out how to properly consider it. This is where the consulting engineer gets to operate as a professional, as an expert. This is the work that, as students, we thought we would be doing and wanted to do. But it actually takes a long time – certainly more than a decade and often two [if ever] – to be able to do this kind of work well, to return high value to Client.
In most firms, this high-level, professional work is a small part of the total revenue stream, and a smaller part of profit (because of smaller margins). But it is an important part of the overall business of the consulting engineering firm for two reasons. Economically, it establishes new projects, the execution of which has to be accomplished overwhelmingly by the junior and mid-level staff on a new “extension of staff” model. But it also continues to illustrate to the junior staff that there is that real, professional function out there, if they can prove themselves up and develop the nous of the elite consultant.
Some of my work (OK, these days, a lot) coordinates with lawyers, in-house or outside or both. My observation is that, to some significant degree, law is done the same way. There is no binary difference: it most be both a business and a profession if the goal is to be a high-performing undertaking.
