Yes, it happens. We’ve seen several situations where the firm’s Managing Partner or Chair can’t bring themselves to make decisions–some arguably critical to the firm’s prosperity and vibrancy in the long run–because they fear some partners will object.
Some partners will always object; it makes them feel better, plus it’s just what they do.
But true as that is, it’s too glib; we need to dig more deeply. For starters, we need to distinguish between perfunctory, pro forma, reflexive objections, and those that touch the existential core of the partner/firm bond.
The first type can be handled by reassuring them that they are indeed the smartest person in the room, that you’re exceedingly grateful they offered that valuable input, and that you’ll take it into consideration before you decide anything.
Next, proceed to do exactly what you had in mind at the start. Within a week after it (whatever “it” is) happening, they’ll behave as if the world was always thus.
We’ll get to the second type of objection momentarily, but before that let’s turn to the Managing Partner’s perspective. What exactly are you afraid of? Instigating a fifth column of malcontents trying to undermine you behind your back? Facing an actual challenger when your term comes up?
Not to throw cold water, but if you elevate the prestige and status of your title as Managing Partner over the best interests of the firm, don’t wait for a challenger to unseat you: Resign now.
Are you thinking along the lines of, “It’s more complicated than that”? If you h ave in mind that you must do your homework in advance of announcing a decision, in the form of explaining, explaining explaining, and listening and listening and listening to your partners’ inputs, then we violently agree. You should have done that already and I’m assuming you have. In other words, in the analysis here I’m assuming you’re past that stage. If not, return to “go.”
Now, shall we proceed?
Decades ago, Peter Drucker wrote that “Rank does not confer privilege or give power; it imposes responsibility.” Or, if you want to go back another couple of millennia before that, Proverbs has this to offer (11:2): “When pride cometh, then cometh shame: but with the lowly is wisdom.”
It would behoove you to think the same way.
Now back to those restive partners seeing your proposed decision as an existential threat to the social contract between them and the firm. Here’s where leadership shows itself, or doesn’t.
Fortunately, you’re not alone. Almost 50 years ago, in 1970, Albert Hirschman published the classic Exit, Voice, and Loyalty, which addresses what proper options are available for members of organizations who are dissatisfied with a direction the organization has taken. The book has sold strongly throughout the intervening years and is a classic, if a somewhat obscure one, in the annals of proto-behavioral economics.
And although he was writing as primarily an economist and therefore focused on corporations and for-profit firms, his analysis fits a wide variety of human organizations from the family to street gangs, organized religion to political parties, and even the dynamics of dysfunctional public school districts.
To oversimplify, Hirschman analyzes the options of the dissatisfied member or participant as being:
- Exit: Simply quit. Leave an organization, if a client switch your buying to another firm, and so forth.
- Voice: Agitate internally for change; organize petitions, solicit management, file complaints, and of course today invoke social media and hope for virally magic goodness. And lastly:
- Loyalty: Decide that, all things considered, you’re going to stay no matter your disagreement.
Of course, not all options are equally available to members of all social groups. Exit, for example, is not an option from your family, short of truly cataclysmic schisms. Nor is voice an option if the manufacturer of your globally distributed commodity product (copy paper, ethernet cables, cardboard boxes) cuts their quality, or if (say) Facebook changes its news feed selection algorithms. And some law firms are acutely sensitive to “voice,” others bordering on implacable.
But the most critical option here for our purposes is the final one, “loyalty.”
This invokes the social compact I mentioned earlier, and which is pivotal in this context. May I emphasize the word Hirschman uses? It’s not “stay” or “remain,” nor is it “seethe” or “resent” or “resign yourself.” It’s loyalty. You are a loyal member of the team. You had your say and the coach/manager/platoon lieutenant decided you all were going another way. To put it in the vernacular: Shut up and get with the program.
There is no fourth option.
Specifically, remaining on board and fomenting that fifth column is not permissible, nor is behavior worthy of hormonal junior high-schoolers: No rumor-spinning, no “nasty nice” verbal daggers, no passive-aggressive resistance. Understand–and live–the reality that as a member of a partnership you are embedded in a reciprocal relationship: The partnership may owe you certain things such as baseline fairness and clarity about its governing principles, but you equally owe the partnership duties such as (thank you, Cardozo), “loyalty.”
Now we can get back to the Managing Partner.
When you contemplate making the decision that is certain to invite dissension, you need to be prepared to discuss the principles of Hirschman’s organizational construct plainly and directly. You will (I assume!) have offered ample opportunity for “voice” ahead of time, so that leaves the unexercised options on the table for your partners at two: “exit” or “loyalty.”
You need to make it clear to them the binary decision in front of them. If they choose “exit,” everyone lives. It’s a free, and large, country, with a lot of law firms out there. If they choose “loyalty,” they must understand its full implications. And you must be prepared to call them to account if they cut corners on loyalty. And above all you need to have that conversation utterly free of self-interest or self-regard. If your provocative decision is truly in the long-run best interests of the firm (we can stipulate to that, can we not?), then that is the end of that inquiry. Its implications for your tenure or the voiced attitudes of your partners are not properly admissible in your thinking.
And if you have “admitted” them into your decision-making, that means you’ve permitted yourself to be afraid of your partners.
Ultimately, of course, this calls on you to live out the indissoluble link between leadership and courage. As one who knew something about leadership with existential stakes and constituents who had already tried to play the exit card put it:
“You cannot escape the responsibility of tomorrow by evading it today.” (Abraham Lincoln)
But there is a fourth option: neglect.
Most of the updates to Hirschmann’s framework add neglect. Especially in the organizational context (as opposed to the consumer), there is a meaningful difference between ‘disagree and commit’ and ‘disagree and impede’.
Casey: Always a welcome contribution; thanks. “Neglect” is a fascinating addition to Hirschman’s taxonomy. In the ASE framework, I would pigeonhole it as a nasty subcategory of “loyalty”–sort of loyalty with a big asterisk, standing for whatever suits your metaphorical tastes: Illegal doping, a constant low-grade fever, simmering insubordination, etc. I was trying to address the purer and genuine version of “loyalty” when I ruled out behaviors such as resenting.
But we all know, don’t we, that you have put your finger on a very real and depressingly widespread behavior pattern of partners. Thanks again.
There is another that is peculiar to professional services firms, however – play the externalities.
Most MPs have grown up in a firm – they have longstanding social relationships with these partners.
It took an MP I knew far too long to make a decision he knew was right, but on the same day he took a brave call and took a proposal to partners that would cost him his role and the firm’s name, he lost his four “best friends” – the people who had gone away together for his 50th.
Another MP client explained his wife was now ostracised at the golf club due to a correct performance review of a partner that was a long-standing friend.
To properly take the Adam Smith view, you need to consider the whole system that the MP operates in, including the externalities.
Touche. MPs do indeed operate in a web of social, emotional, and historic/contextual networks, and neglecting the consequences that making the tough calls can inflict on those networks is not true to life as professionals live it.
I suppose I could counter by suggesting that this is a back-door argument for considering external and not just internal candidates when the new-MP selection process kicks off, but it will take us a few decades to get there. (Intel, unhappily for it in the news as of yesterday, has already announced their search will embrace inside and outside candidates; but then they’re presumably run as a proper business.)
Tough stories to hear, indeed. I wonder if any (other) partners were ever grateful to the MPs you cite for making the tough call? And I wonder if, after they finished their courses of therapy ( 😉 ), they were at peace with what they decided?
I kind of want to push back on the concept that our hypothetical MP should completely disregard the impact the decision may have on his or her tenure on a couple of different grounds. For one thing, no one is that selfless in reality. That just is not human nature, and certainly not the way most MPs who have risen through the ranks of a typical firm have been socialized over many years. Just an unrealistic expectation in my experience. And that’s OK. MPs are just people too after all. Now, it can’t be the dispositive factor, but the human element has to be allowed for here.
The second reason is a purely economic one, although related to the first. Compared to their CEO brethren in the corporate world, few MPs have the economic safety net to make the truly difficult calls and institute sweeping change like a CEO does. If a Fortune 500 CEO wants to turn the aircraft carrier around and go in a completely different direction, so be it. It may ultimately be their funeral. But if they fail, they have a major cushion in the form a generous severance package along with the substantial equity comp they received as part of their package. Barring some major transgression in the role or outright bankruptcy, CEOs who make bad decisions and gets ousted for them usually walk away wealthy people by any metric you choose. Some CEOs even get a second chance somewhere else after some image rehabilitation. An MP? None of that. At best, if you fail, you get demoted back down to a rank and file partner after a usually messy and painful removal process (forced or not) and have to build your practice back up starting from near ground zero. There is no severance; you are paid out yearly in ordinary income just like everyone else. And you have an extremely low chance of moving anywhere else unless you maintained an active practice (does anyone do that in the AmLaw 100 any longer?). Nor is there any long-term equity compensation to see if your bet(s) paid off.
Truly big, bold decision-making in the face of some staunch shareholder opposition (the toughest calls) requires the decision-maker to (i) have his or her economic interests directly aligned with those the firm, and (ii) have at least some downside protection. Otherwise, most people, whether they are lawyers or not, aren’t going to take that kind of plunge.
Dear Skeptic: Thanks for your comprehensive and thoughtful observations.
I do have an additional thought on the economic consequences to an MP who loses his/her support vs. a CEO meeting the same fate.
Partners in law firms–MPs or rank and file–have by hypothesis chosen a “low beta,” high-security career; they may not garner extreme wealth but they will surely never be limited to even a (statistically) middle class income, either. They will do quite well financially, thank you, even if they’ll never be in the stratosphere of the hedge fund, p/e, and i-bank jockeys.
The lawyers, eyes wide open, chose their own low-risk, and still very very good return, long since.
Our hypothetical disenfranchised MP will be able 99% of the time to return to full-time practice in the firm, perhaps with a couple of years’ spooling up to a full client load. The mortgage will not be foreclosed, and he/she will be able to finish their life with a clear conscience that they did what they thought best even at high personal risk–no small reward, in my book.
It would repay the effort, in considering this thread, to re-read the ASE posts of 01-Aug-14 (“Why are you leading”) and 21-Aug-14 (“Do you love what you do? Really”. They deal, as I read them, with the connection between leadership and stewardship, and implicitly with the distinction between authority and responsibility within structured organizations.
Nice article Bruce and, living as I do in Scotland/UK, the “EVL” model certainly resonates, given that politics here in recent years sometimes feels like it’s been taken over (and not for the better) by “E” factors – for countries, companies and individuals.
Anyway, on law firms, if I may pick up a few ideas from your piece and run with them –
1. For me, one of the great “obvious-once-pointed-out” insights from Hirschman is that making “E” easier reduces the tendency to stick around and make things better, in all sorts of contexts. In the world of law firms, “E” certainly isn’t diminishing, and in some markets (e.g. London, Hong Kong) is on the up in recent years.
2. Relatedly, whatever an MP would *like* to see from partners by way of “loyalty”, there are of course many reasons why people stay, and how they behave when they do but crucially, it seems that the “rational element of calculation” may be increasing and that the “cost of disloyalty” to a large law firm isn’t particularly high these days, and may even be reducing for various reasons, including the important ones explored in your recent piece about “The Death of Lockstep.”
3. These days, in a large law firm, a truly differentiating, dial-moving proposal is going to have an element of risk – indeed, I would go beyond that and say that anything truly meaningful is likely to be harmful to the interests of some partners or (perhaps even more to the point) perceived as such.
4. And all that is even before one gets into complicating factors such as the generational issues and the pressure to keep distributions up.
The list could be continued but I offer it simply to illustrate that, while I certainly don’t disagree with what you say about the need for leadership, I can easily imagine why even the postulated MP, with only the firm’s best interests in mind, may have a certain justified fear of their partners, without any element of selfish interest.
I’m not suggesting that the MP should just give in to that fear, my suggestion is simply that, in making meaningful proposals these days, there is likely to be an objective basis for fear which goes beyond the hypothetical MP’s personal interest in maintaining his or her tenure, and that it’s worth recognising this in order to face it clearly.
Also, I wonder if even the most selfless MP may not necessarily be wise to offer too stark a “love it or leave it” choice, as opposed to accepting a lower level of “L” from at least some constituencies.
Anyway, great thought-provoking article, as ever 😉
The rich dialogue of comments here constitute a juxtaposition of what I think of as the “competitive virtues” and the “compassionate virtues.” I began with a column focused on the first set of virtues–achievement, performance, winning, prowess, and of course first and foremost courage. Some readers have responded (thank you!) by counterposing the compassionate virtues–mercy, humility, friendship untainted by calculation, and judging not lest ye be judged.
There may be a larger context I might have been remiss not to have drawn attention to in my original column: What type of firm is this? Is it a high-demand, high-performance, high-reward environment? A “lifestyle” firm? What values and behaviors are paramount and celebrated? Accomplishment and excelling? Compassion, humility, and empathy?
Without articulating what type of firm our (courageous or fearful) MP is leading, it may not be fair or just to evaluate their behavior.
Certainly the market does, and should, have room for both types of firms, and other more intermediate variations.
We are, in other words, creatures both of intention and aspiration, and of circumstance, context, and sociocultural history. Both the novel and the traditional are valuable, but organizations often need one in a much greater dose than they need the other.