Partners think they can do anyone else’s job, but no one could possibly do their job. Because they’re lawyers, they know better than anyone—better than all of them. They think they not only should have a voice but a vote on anything that comes to their attention, be it through formal firm constitutional provisions or at their own whim. They are wrong on all counts.
Countless are the times I’ve heard partners complain, sometimes pre-emptively before it’s even a real and present danger on their hyper-sensitive radar, about being “managed,” or a “top-down approach” at the firm, or “centralized decision-making.”
I have a simple question: What did you think the deal was, in joining BigLaw?
More strongly: Get over your self-important, me-centric view of the world. It’s unbecoming.
Americans, Europeans, Asians, everyone across the world, understands that joining a large organization has pluses and minuses. So does joining a startup, a small company, a nonprofit, a governmental agency. As the weak joke goes, “that’s why they call it work.” By signing up with BigLaw, you subscribed to an implicit social compact: This firm is bigger than me, it has strengths and advantages I could never have created or enjoyed without its size and scale, and yes, there are mutual expectations, limitations, and responsibilities.
Every couple of weeks I receive an email from a partner at one AmLaw firm or another (for the record, there seems to be no pattern) to the effect of “this isn’t the firm I joined.” And 90% of the time I have to tell them they’re right. So they have a choice.
I’ve also seen talented, desirable, and highly marketable groups of partners leave—not just for another BigLaw home—but to form a tasty boutique of their own. If you follow the trajectory of these firms, and I try to do so with the more interesting ones, you find that within a couple of years the all-hands wine and cheese parties in the library Friday afternoon are tailing off, the spontaneous pizza-for-everyone evening orders are more memory than reality, and the firm-wide distribution of full disclosure, open kimono financial statements have slowed to a trickle. In other words, the firm is changing. It’s becoming more “managed” and more “top down.” What a shock.
I know of no pithier, more succinct, or less politically correct declaration of the bones of the social compact that comes with membership in BigLaw than that of Peter Kalis, Chairman of K&L Gates, in an all-hands memo republished on Above the Law a couple of years ago dated December 30, 2010, the day before the firm’s calendar-year fiscal year books closed:
Let me be clear about a couple of things. First, partners and administrators at this law firm are expected to run through the tape at midnight on December 31. Many of you came from different cultures. I don’t care about your prior acculturation. We didn’t conscript you into service at this law firm. You came voluntarily. What we are you are as well.
And that brings me to my second point. We are a US-based global law firm. US law firms operate on a cash basis of accounting. Our fees must be collected by midnight within the fiscal year in which they are due. You don’t get to opt out of this feature because it doesn’t appeal to you. Again, I couldn’t care less whether it appeals to you. It is who we are and therefore it is who you are. Get us paid by tomorrow.
Like it or not, this has the inarguable ear-shattering crash of truth to it. David Lat said as much in the very next lines of the post:
You know, in substance, you kind of have to agree with Kalis. It’s not like the partners were surprised by K&L Gates’s collection policy. Get your money by the end of the fiscal year or it won’t be reflected in your 2010 realization.
And while the tone is, again, aggressive, Kalis doesn’t come off like Steven Pesner here. He’s not toying with other people’s careers or anything. He’s just telling his guys to quit their complaining and get with the program. It’s a bit much, but partners are big (and rich) boys (and girls). I assume they can take it. [Pesner is an Akin Gump partner who sent a memo to associates about the importance of completing their timesheets on a daily basis and telling those not on board with the policy to “re-evaluate your importance.”]
Pretending you didn’t know what you signed up for is either hypocritical or naive. Billion-dollar-a-year enterprises spanning a multitude of time zones demand adult supervision. “Whether it appeals to you” is not germane.
Some closing perspective.
Each of the three “indicators” I’m advocating here should be resoundingly welcomed by lawyers in these firms; you should be lobbying management to provide all of these, in spades. Need I remind you that the market landscape for BigLaw has never been more competitive? That far from the rising tide of the 80’s, ’90’s, and (most of) the ’00’s, lifting all boats, we are locked in a battle for market share? That disaggregation has arrived? That substitutes are cropping up? That the vast majority of law schools, source of our future talent, are burning platforms?
This is not the salubrious environment in which to lay down your arms. Demand your firm pursue all those indicators if they’re not, and redouble their commitment if they are. It’s no exaggeration to point out that your wellbeing depends on it.
Thanks for another thoughtful, and thought-provoking article.
Your closing perspective is what gets me. Some of the paths to improvement seem well-defined; upgrading and empowering the c-suite, for example, would seem to be a relatively quick way to get a leg up on the competition. I understand that for many it won’t be “quick and painless.”
But as someone who competes mostly against BigLaw firms, the slower the better.
Bob and all:
“Quick and painless” is surely the American Disease, at least in our time. I am sure it is not part of ASE’s advice, and it seems solidly counter to most thinking of the Enlightenment that I know, so I imagine Adam Smith, himself, would have found the idea risible in any significant situation.
If lawyers were so smart at running businesses, then no Biglaw firm would ever fail.
May I quote you on that? 😉
Seriously, it is rather an accomplishment to drive a business with intrinsic gross margins of 30-50% right into the ground.
You’re welcome to quote me, though the thought (if not the exact wording) has probably crossed the mind of the management of every large business that’s seen one of its law firms close its doors.
One of the other mysteries about law firms closing is that, compared to their clients, they don’t require much capital investment. General Mills, for example, has 41,000 employees and about $23 billion of assets at balance sheet values, or about $560,000 of assets per employee. Apple Computer has 80,000 employees and $207 billion in assets, or about $2.5 million in assets per employee. By contrast, K&L Gates has about $500 million in assets (including my estimate of the firm’s A/R based on its public financial reporting) and 2,200 lawyers and legal professionals, for assets of about $230,000 per legal professional. As the reported headcount doesn’t include other support staff and administration, K&L’s assets per employee is likely around $100,000 to $125,000. It’s a lot harder to go out of business if you don’t have to sink much money into it.