Lately there’s been heightened discussion of whether firms’ Managing Partners should be full-time CEO’s, or whether the traditional custom of their being active practitioners, billing gobs of hours on real live client matters and managing the firm the rest of the time, should be maintained. Partly using as a journalistic "hook" the Dewey/Orrick non-merger, The Wall Street Journal even wrote about it earlier this week.
Their verdict: There are pros and cons.
"Should top law-firm managers have active law practices?
Pros:
Lawyers respect great lawyers
Client contact keeps you current with business needs
Sends message that law is a profession
Cons:
Lack of focus on strategic planning
Lack of time for communicating with colleagues
Lack of time to recruit"
I’d like to delve into this a little more deeply.
At many firms, there is simply no policy, formal or informal: The firm chair practices or not, as he or she happens to prefer. Exhibit A in this is Mort Pierce, head of Dewey, who bills a jaw-dropping 3,300 hours/year and who freely admitted to the WSJ that "Management is not my passion."
Before proceeding another syllable, can we just step back here a moment?
Can anyone in the audience imagine the reaction if the CEO of, say, a Wilshire 5000 company dropped that quote into the eminent pages of the WSJ? Right: They would be frog-marched out of the executive suite before lunch. (I make this pluperfectly obvious observation only to point up the chasm between law-firm land and corporate-land.) Sorry; lost my head. Back to the show.
At other firms, the compensation system may unduly reward the personal hourly productivity of partners: Unless there’s an explicit exception for the Managing Partner, self-interest will dictate an absentee-manager approach. The calculus is not complex: Take on an often-thankless job while impairing my current earnings and, through losing track of clients, tarnish my future earnings as well? I respectfully decline.
Yet how irrational—nay, bizarre—is this? Law firms where the Managing Partner continues an active practice are no different than, say, airlines run by pilots carrying full flight schedules. Things might continue to perform perfectly satisfactorily on a day to day operational level, but one would have to question their ability to cope with fundamental strategic and economic changes. And I can also tell you which airlines I’d invest my money in: Not those run by pilots.
In our own industry there may actually be some empirical evidence that firms executing a calculated long-term strategy need full-time Managing Partners. The WSJ piece quotes David Wilkins, the director of Harvard Law School’s Program on the Legal Profession, as saying “firms that have radically moved themselves up the prestige ladder and the profitability ladder and expanded their geographic scope have had full-time leaders," and he cites as examples Orrick under Ralph Baxter and Bingham under Jay Zimmerman (I would add Reed Smith under Greg Jordan and K&L/Gates under Pete Kalis).
But the job of the Firm Chair has far more constituencies than that of a rank-and-file partner, whose monolithic constituency is "my clients." Consider this:
| Lawyers | Clients | |
|---|---|---|
| In the Firm |
|
|
| Outside the Firm |
|
|
As if this weren’t enough, there are all the other normal "hygiene" components to management that you’re responsible for.
Now, perhaps, we can reimagine the question about whether Managing Partners should actively practice. Isn’t the choice really this:
- Bill 1,000 or so hours to a handful of clients—whose interests always come first, remember—and manage the firm, essentially, after client demands are satisfied. Or
- If you’re serious about contributing the highest value you possibly can to the firm, resolve to be a single-minded driver of strategy and competitive strength in our ever-more-challenging environment.
Of course, if I were the one being asked, since I’m at the absolute 180° opposite end of the spectrum from our friend Mort Pierce, I would choose Answer B in a heartbeat. Which only restates the deeply human truth that if you’re not passionate about what you’re doing, you better keep looking.
