The two (complex and sparsely populated) are of course joined at the hip. Complex organizations are hard to mimic and challenging to maintain at a high operational level and, let’s face it, lawyers can reach quite senior levels in their firms blissfully free of exposure to management or, really, Business 101.
That brings us to the first characteristic of Splendid Grays, which can be a show-stopper right out of the blocks: The senior people running the place must be drawn primarily from across a well-balanced blend of business professionals:
- COO,
- CFO,
- CMO,
- CIO,
- pricing and project management specialists,
- data analysts,
- client relationship managers,
- process optimization experts,
- interface and design developers;
- and much much more.
Yes, they will “run the place” in intimate partnership with the lawyers, but the lawyers’ role will be constrained and not imperial. They–and the business professionals alike–need to do what they do best and can have no right to second-guess others in their specific areas of expertise.
This will be hard, bordering on impossible, for many lawyers to swallow. Lawyers are so used to being in charge at law firms, lock, stock, and barrel, that they may almost be unaware of it, and if brought to their attention, any other state of affairs will be ruled out as unthinkable.
Lest you think I jest, my partner Janet Stanton was presenting at a large law firm retreat about a year ago, when she made the seemingly anodyne observation that referring to “non-lawyers” within the firm was demeaning: “Are there ‘non-doctors’ in hospitals?,” she asked rhetorically. The rather plaintive objection was immediate: “But, then, what are we supposed to call them?”
And have you noticed how many senior people at law firms running (for example) marketing or technology or “innovation” initiatives have JD’s? Yes, to some extent it’s a statistical artifact resulting from people with JD’s tending to spend their formative years inside law firms, but the voiced preference of many law firm leaders that those positions be filled by JD’s is clear and present (and highly irrational).
May I point out a certain asymmetry here? It would never cross the mind of a business professional to second-guess a lawyer’s litigation strategy or transactional negotiating technique, but it seems irresistible for lawyers to presume they “know better” than almost any businessperson, and to get in their way, second-guess them and veto their decisions if they can get away with it, and of course demoralize and demean the businesspeople in the process.
This reminds me of the school of thought among foreign relations experts that the concept of “national sovereignty” stands for respecting each nation’s right of self-determination and autonomous governance, unless you happen to be China, in which case it means China’s sovereignty over other nations as convenience and self-interest might dictate.
As is often the case, then, one of the foremost challenges to adopting a strategic positioning–in this case that of being a Splendid Gray, with all the high-powered business and operational expertise that entails–is that the native culture of the firm onto which the strategy is being grafted will reject the implant, its life-saving or therapeutic benefit be damned.
I have no snappy riposte to this dilemma and no “seven habits…” to help you get over it, but if you aspire to being a Splendid Gray, get over it you must.
The market will not be kind unless you do, because remember, the competitive set of Grays is not just other Grays, but in-house departments (we can do this non-brain surgery ourselves) and NewLaw. Being a Splendid Gray means far more than being better than other middle of the pack Grays (outrunning your friend in the woods, as the old joke has it), it means outperforming the bought-and-paid-for expertise of inhouse counsel and beating NewLaw at its own game of predictability, reliability, repeatability, and relentless cost minimization.
None of this will be possible if you can’t bring yourself, and your partners, to (a) seek out and hire the most highly qualified business professionals you can persuade to sign up; (b) pay them their full market worth, and maybe a risk premium on top of that because they’ve seen what can come from signing up for a tour of duty at a law firm; and (c) get out of their way.
Few firms will be capable of doing that, or of sticking with it long enough to see it bear fruit. That’s why the Splendid Gray quadrant is sparsely populated. And why squarely planting your flag there could be richly rewarding.
Business professionals who “run the place”? To me, that implies those people would have some measure of control over the assets of the business and how they are used. And there is really one source of hard power in a law firm. Control over comp. So unless you are talking about turning that over to the business professionals, those C-suite roles above are not going to be “running” anything in a practical sense. Administrating? For sure. Equal voice at the table on issues that really matter? Under the most progressive and dynamic managing partners, perhaps. Having at least partial control over lawyers’ individual destinies within the firm? Nope, not happening under current partnership structures, and probably not under any structure short of outside capital coming in and dictating that kind of change. Almost sure career suicide for any managing partner who tries it.
Dear Skeptic:
Thanks for your contribution; I fear that you have gone straight to the heart of the matter.
If I may essay a distillation and re-ordering of your thoughts:
Do I have that right?
For readers who agree with my paraphrase of your thoughts, the inescapable conclusion is to extend my observations (permeating the column) that being a Splendid Gray is (a) hard, and (b) very rare to a more radical conclusion, namely that it is (a) impossible and therefore (b) must tend towards the null set.
That pretty much cedes the market for predictable, consistent, high-quality, reliable, low-cost, process-optimized provision of repetitive and repeatable legal services to sophisticated in-house departments and NewLaw.
The only question I would pose back to Skeptic and any other interested readers is this: Will this make lawyers happy? Is elevating their immediate personal career planning preferences over the long-run success and health (alarmists will argue survival) of their firms their “revealed preference?”
Well, I would posit this, as I believe it is the key question. What’s in it for the people who are being asked to give up that control and still retain all the economic risk of the firm structure? Your prescriptions (spot on I believe) as to how to become a Splendid Gray are nothing short of an entire renegotiation of the essential social contract between the firm and its partners, as ill-conceived as that contract may be. And that sort of renegotiation requires both parties to come to the table to get to some sort of workable compromise.
Is the payoff just survival of the firm for some undetermined period of time? That alone would be a pretty tough sell in most firms unless the firm was already facing some sort of major crisis. Or is it something more? Maybe much more? How compelling is the business case for the change? Does senior leadership have the abilities to conduct this sort of comprehensive market analysis AND the charisma to persuade people to act on it?
The reality is that the vast majority of Grays likely fall somewhere between well run and poorly run. And for most current partners, basic competence (some honest mistakes balanced by some moderate successes) works OK. Not optimally, but well enough for most partners to make a good living with some say over their career paths. With forward visibility as to the firm’s prospects, say, five years hence. That’s not a bad deal. And that doesn’t mean those people don’t think about the next generation or don’t wake up every day trying to make the place better than they found it. It just means that people in that position usually require some preexisting existential problem to undertake existential change. Or they have to be properly incentivized to act.
I suspect the Big 4 – and clients, as you mention – will more-than dominate the Splendid Gray quadrant.
This is probably the most realistic/probable outcome.
Don’t you have to wonder what all the ambitious 35-45-ish partners at non-Splendid Gray’s think their management is up to?
The previous comments focus on lawyer values of autonomy and dollars. Can’t deny those are widespread. But there are those of us, at all levels of the profession, who aspire to be builders. For us, “Splendid Grays” is the ony place to be (and a great name for a fantasy footbal team). Having a marketing or finance person show us how to do things better isn’t “giving up” anything; it’s using the expertise of those who know better to help us do better. Why can’t everyone embrace that? To me that looks a lot less like “autonomy” and more like “ego,” combined with “fear.” Thanks for a wonderful, inspiring, thought-provoking series.
Bob: Bravo! (and not for your kind words). Too many
peoplelawyers, I fear, try to camouflage ego, and more than a whiff of condescension towards non-lawyers, as their hard wired instinct for autonomy. I, and I have to believe the vast majority of readers, appreciate your calling a spade a spade.At least in my career, I have always been insatiably curious and eager to learn from others who have done a lot more of XYZ than I have. It’s not just a more interesting way to live (expanding one’s horizons), it makes one a far better professional and psychologically feels profoundly liberating. Closing down one’s (mental/intellectual) shell has always struck me as childish and, yes, fearful.
I won’t even go into the clarion call for adopting an attitude of stewardship that is front and center in your remarks. That’s a very large topic undercut by firms’ very structures: The blinding visibility of PPP, structural short-termism (no non-competes, no “equity” in any economically meaningful form), consensus-as-king and supermajority partnership clauses, etc.
Thanks again.
I can definitely see a long-term future for (1) really large, well-capitalised corporate grays that can invest in all these diverse skills, make it work culturally and achieve economies of scale (2) separately-managed gray operations within maroon law firms (because of the “nature of the firm” benefits which exist despite the significant challenges – a topic for another day).
Adding in the reality that tech is more of a threat to grey than maroon models, the thing I really struggle with is to see a long-term future for modestly sized independent greys who aren’t linked to a strong maroon engine.
In other words, “go big or go home.”
Too simplistic?
On the other hand, I think the complexity of many types of legal practice is widely underestimated and that large numbers of independent maroon law firms will still be around for the foreseeable future, given the huge numbers of niche legal markets and the limited benefits of scaling maroon organisations.