For years, I’ve been hearing firms describe their cultures as “entrepreneurial,” and I hardly paid the slightest attention. Like “collegial” or “collaborative,” it just seemed like so much white noise. Then finally I heard it once too often and had to face cold reality: I had absolutely no idea what these people—a lot of smart, articulate people—were talking about.
Let’s go to the dictionary, where we find:
/äntr?pr? no?or??l/
1. characterized by the taking of financial risks in the hope of profit; enterprising
Other notions orbiting around the concept of entrepreneurism include engaging in genuine innovation and invention (to the extreme of shattering the status quo), proceeding decisively in the face of profound ambiguity and uncertainty, and shouldering the personal risk of sacrificing years of reliable income provided by others for whatever rewards you can persuade the market to deliver—with a meaningful risk those rewards could be nonexistent.
This is an audience participation column, so I ask you this: Would you describe your own firm as “entrepreneurial?” Are there firms you admire or look down upon that you’d describe as “entrepreneurial?” What mental image or behavior, what cultural archetype or partner personality type, pops into your mind when “entrepreneurial” is used to describe a firm?
Now that you have solidified your own image, I’ll tell you what I came up with when I forced myself to engage in this exercise: Anarchy.
“Entrepreneurial” seemed to me a code word for utter undisciplined chaos: Each partner pursuing his/her own preferences, based overwhelmingly on opportunism and not a roadmap, rigor, focus, or anything whatsoever having to do with a larger integrated strategy—heaven forfend one developed on the premise of a “one-firm firm.”
We’ll get back to anarchy in a moment (yes, I hear disagreement on this score), but let’s stick with “entrepreneurial” for another moment.
Can one really, seriously, be an entrepreneur when an income from several hundred thousand dollars year to up or to way way up, generated by the powerful machinery of the firm one is a partner in, is essentially assured? When one is not remotely putting one’s future livelihood, even for a year or two, on the line? When any personal capital invested will be returned quite promptly and in full, if you bail out? When a painless exit strategy (we’re all elevator assets, remember) is a few phone calls away? When the last Big New Thing that was invented in your chosen industry was the Cravath System ca. 1900—and you’re not dreaming of the 21st Century version 2.0 of the Cravath System in any event? When the number of employees relying on your perspicacity and market savvy for their livelihood is, well, precisely zero?
Or we could approach this from the psychological dimension.
Entrepreneurs are:
- Risk-tropic
- Creative
- Intuitive
- Trusting
- Big thinkers, and
- Extremely resilient.
Lawyers are:
- Risk-averse
- Conventional
- Judgmental
- Skeptical
- Detail-oriented, and
- Over two standard deviations below the population norm on resilience.
As for “anarchy:” We know as well from studies of lawyer psychology that we are autonomy-seeking missiles. We don’t want to be guided, much less managed. This can be a strength in the practice of law, where it permits us to be creative and iconoclastic in our approaches to issues, but when it comes to running a law firm it can be a nightmare for leadership.
Understand what I’m saying and what I’m not saying.
Although I don’t think most firms that call themselves entrepreneurial fit this mold, it’s possible for a firm to be entrepreneurial in how it solicits and prices new business, but for this model to succeed in any firm larger than a very few lawyers, the firm internally must be corporate rather than entrepreneurial. In other words, what allows a firm to be entrepreneurial with its clients is having rules and procedures in place to carry out goals that the firm management articulates and communicates to its staff. A firm of two dozen lawyers or more that lets them all market and price willy-nilly is a confederation and not a true organization.
Perhaps the word is not perfect and perhaps its always difficult to use only one generic word to describe a concept, which is why lawyers love definitions. As long as a particular firm has a clear and shared understanding – that they are also able to articulate to clients and other stakeholders – of what that firm and those partners mean by “entrepreneurial”, I do not see an issue. The same applies basically to any word used to describe the values and culture of a firm. At my firm the point is not a partner’s individual entrepreneurship from the perspective of risk-taking. It is the entrepreneurial _spirit_ of all partners combined in a mission to deliver, with focus and in line with our strategy and values, maximum profit over a sustained period of time. Its the difference between being at a job and being an owner-leader. And, yes, any outsider can be cynical and pick apart any value or culture statement at any law firm, in particular in the current climate, yet that speaks more of the worldview of the person in question than actually provides any meaningful input, analysis or critique of the firm in question.
Bruce, you know the saying “It takes one to know one”? While I don’t think I would describe law firms (the institutions and their cultures) as entrepreneurial, I definitely meet lawyers and law firm leaders that I consider to be entrepreneurs. My tests are whether they demonstrate an investment mentality and whether they take risks with their money or time in pursuit of improved returns. I see lawyers increasingly investing in their relationships with clients and taking risks on the outcomes of matters. I see law firm leaders securing the support of their partnerships to invest in future-proofing their firms. In disclosure, I am in the business of serving lawyers at firms and corporate legal departments. While I realize that it is fashionable to knock the lawyer as entrepreneur, I simply must report that my personal workday is filled with lawyers taking risks and investing in the future. I am not a lawyer, but I am an entrepreneur in the legal sector. I have raised over $100m of institutional capital in building businesses in the legal sector. I have personally put over $10m of personal capital at risk in the legal sector. My first business was a virtual data room software business (now Merrill DataSite); my second business was an LPO, Integreon; and my current business is a legal service provider, Elevate.
I personally believe that this “entrepreneurial” Idea is more about slick marketing and just the trend the whole world seems to be in trying to brand everything.
I agree with @MidRange guy
You cannot be “entrepreneurial” until you’ve developed something that can bring clients value. A business needs to be stable and have the resources to try and be “entrepreneurial”.