The Managing Partner's Role in Leading Change

Stephen P. Gallagher,
LeadershipCoach.us

Managing professionals has always been a difficult job in the best of times, and as we approach what appears to be even more challenging business environment, law firm leadership—and particularly the role of managing partner—will become increasingly more complex. I'd like to examine the role of today's managing partners in light of how connections within a firm and between the firm and the outside world are evolving. Let me start by stating that, I believe law firm leadership can no longer operate under some of the old assumptions:

• Expecting blind loyalty from employees in exchange for job security.
• Delaying decisions for days, weeks, months, or years.
• Accepting mediocre job performance.
• Embracing consensus and avoiding conflict.

Several years ago I wrote an article, "How Law Firms Should Respond to New Forms of Competition (New York State Bar Journal, June 2000). In this article, I suggested that we were in the early, turbulent days of a revolution as significant as any other in human history. Over the past two years, the Internet has tightened its grip on the lives and livelihood of more people. This competition among and between all professional service providers has given the consumer the opportunity to shop among the various professions for many of the services that have been traditionally provided by attorneys. Today, managing partners' face many new challenging questions: “Who are our competitors? Where do our core skills lie? Should we abandon our most successful, long-standing business?

Those individuals who manage professionals must begin dealing directly with the forces that are reshaping the way people live and work. According to former university professor and psychotherapist, Morris Shechtman, the rapid rate of social, cultural, political, and economic change in the world today has created a high risk culture.

“In this high risk culture our businesses and our lives are in a constant state of flux, and there is no room for safety nets. To succeed in such a culture, we must learn to work with change, not deny it. And with our safety nets gone and our external props kicked away, we must learn to work together in new ways while we find sources of stability within ourselves.” [1]

As a managing partner working within this high risk culture, you will need to create an environment that is: more tolerant of dissent; more supportive of experimentation; and at the same time, more committed to shared discussion and learning. Increasingly, managing partners are finding out that, while money plays a part in the discussion to leave or stay with the firm, other factors seem to matter more. Law firms are beginning to look more seriously at career development, responsibility, professional satisfaction and overall law firm atmosphere to supplement compensation packages. I’d like to examine some of the ways leaders in this high risk culture handle themselves and their relationships. My emphasis will be on both the personal and the professional.

1. Emotional Leadership and Direction
In a new book, Primal Leadership: Realizing the Power of Emotional Intelligence,[2] we learn that organization’s climate can be traced to the actions of one person: the leader. More than anyone else, the boss creates the conditions that directly determine people’s ability to work well.[3] More than anything else, the managing partner needs to create the conditions that will bring people together. Research indicates that a leader’s emotions are contagious, so my first suggestion is, “If you can not take the heat, get out of the kitchen.”

Research also shows that leaders have more trouble than anyone else when it comes to receiving candid feedback, particularly about how he/she is doing as a leader. [4] If you, as a leader can not get your co-workers on the same wavelength emotionally—feeling in synch with the firm’s goals—people may think they are doing a “good enough” job, but the firm will not be able to reach its full potential. If this is the case, Daniel Goleman and colleagues suggest that, a supposed “leader” may manage—but he does not lead.”[5]

According to Morris Shechtman, “In this high risk culture, employees needs to understand why it’s important to change from good soldiers to challenging employees. In the past, employees were paid to get work done in a prescribed manner and not irritate the boss. In our new high risk culture, if employees fail to challenge bosses when things aren’t right, they’ll be fired.”[6] Managing partners, like leaders of any organization have more trouble than anyone else when it comes to getting candid feedback, particularly about how they’re doing as a leader. Research indicates that the higher a leader’s position in an organization, the more critically the leader needs that very kind of feedback. Managing partner disease refers to this information vacuum around a leader created when people withhold important (and usually unpleasant) information.[7]

According John Kotter and James Heskett, two of the world’s foremost experts on business leadership, “Culture can have powerful consequences, especially when they are strong. They can enable a group to take rapid and coordinated action against a competitor or for a customer. They can also lead intelligent people to walk, in concert, off a cliff.[8]

Leadership and Team Building--Try New Things
There is a great deal of research from the behavioral sciences supporting the notion that people prefer to spend time with people who are similar to themselves. However, if your firm hires only new people whom insiders like and feel comfortable being around, you should expect to continue to rely on ONLY past history, well-developed procedures, and proven technologies to grow your business. In these times when most companies are experimenting with new procedures, inventing and testing new technologies to satisfy customer demands, to enter new markets, and to gain an advantage over competition, hiring new kinds of people will be key for your firm's survival.[9]

The performance challenges that firm's face--for example, client satisfaction, technological change, competitive threats, and regulatory threats are forcing firms to, "avoid the mistakes of looking for the seeds of tomorrow in yesterday's fields." [10] Stanford's James March points out that in the long run, no company can survive by relying on established and proven actions. To make money, later, companies need to try new things, to "explore" new possibilities. This means experimenting with new procedures, hiring new kinds of people, and inventing and testing new technologies.[11]

The Threat of “Highly Marketed Mediocrity
In order for firms to survive and thrive during difficult economic times, there is strong evidence that firms will need to innovate on broad fronts. To the client, your firm exists only to create value for them, to provide them with results. This is not the time to continue business as usual. Fortunately, there are a number of things managing partners can do to help the firm thrive in these difficult times.

Leadership and Firm Governance
Law firms, like many companies have been trimming their work forces for months now, to control costs and stay competitive in a weak economy. In a recent study of senior executives of Fortune 1000 companies conducted by Wirthlin Worldwide -- a market research firm for Accenture, found that nearly half of the executives surveyed identified leadership and management as the most sought after skill. According to the Ed Jensen, a partner at Accenture, “The continuing competition for top talent indicates that companies and employees are under increasing pressure to do more with less.” [12]

Practice What You Preach
According to research by Daniel Goleman, the leader’s way of seeing things has special weight, so group members generally see the leader’s emotional reaction as the most valid response, and so model their own on it.” [13] A managing partner who, for whatever reason, can not or will not make timely decisions should not be leading a firm.

Creativity Results from Action – Not Inaction
Research on creative output shows that creativity is largely a function of sheer quantity. [14] Stanford professor, Robert Sutton demonstrates that it is impossible to generate a few good ideas without generating a lot of bad ideas. According to Sutton, “if a company wants to encourage people to keep generating new ideas, to test them in unbiased ways, and to avoid reverting to proven ideas and well-honed skills, rewarding success isn’t enough. You have to reward failure as well.”[15]

This is a very difficult concept for law firm leadership to implement. Whether people are doing something—or nothing is one of the best metrics for assessing people who do creative work. However, "doing something—or nothing" is difficult to track in reviewing billing hour reports. According to Sutton, "inactivity is the worst failure, perhaps the only kind of failure that deserves to be punished if you want to encourage innovation."[16]

Managing Talent
At every level, managers must identify where most value lies. The key to success lies much less in technical know-how than in excellent leadership to push through and build upon organizational change. The people at the top will set the tone in a firm.

Ready-Fire-Aim
Law firms need to pay particular attention to, what Jeffrey Pfeffer and Robert Sutton refer to as the "smart talk trap." This is a syndrome where inefficient companies hire, reward, and promote people for sounding smart rather than making sure that smart things are done. In such organizations, talking somehow becomes an acceptable—even a preferred—substitute for actual doing anything.[17] This particular syndrome can wreak havoc with billing hours and client services if left unchecked.

Become a Learning Organization:
A company’s success depends greatly on the collective skills of it’s employees—it’s human capital. Companies that spend more on training and development outperform those that spend the least. According to the Knowledge Asset Management survey, “companies that ranked in the top 20 percent or so in spending on training and development would have earned an average of 16.2 percent, annualized, in the five years through 2001, or 6.5 percentage points a year more than the Wilshire 5000 index.[18] There can be intense pressure on firms to increase current earnings by cutting expenses like those of employee training. Such expenses also carry indirect short-term costs, like reduced productivity while employees are being retrained.

Committees, Meetings—Meetings, Committees
Another leadership challenge in many law firms today is the amount of productive time lost by groups that hold meeting after meeting to discuss and write detailed plans about the new products and services they hope to develop, but never quite get around to realizing. Additionally, when everyone in these groups always agree, it may mean they don't have many ideas to share. Or it may mean that avoiding conflict is more important to them than generating and evaluating new ideas. Regardless of the reason, lack of conflict and dissent means the group is unlikely to express and develop many valuable new ideas.[19] These groups should also be disbanded and their leaders removed and retrained.[20]

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[1] Shechtman, M.R., Working Without A Net: How to Survive & Thrive in Today’s High Risk Business World (New York: Simon & Schuster, 1994), 5.

[2] See Goleman, D., Richard Boyatzis, and Annie McKee, Primal Leadership: Realizing the Power of Emotional Intelligence (Boston: Harvard Business School Publishing, 2002).

[3] Kelner, Jr., Stephen P, Christene A. Rivers, and Kathleen H. O’Connell, “Managerial Style as a Behavioral Predictor of Organizational Climate” (Boston: McBer & Company, 1996).

[4] Goleman, D., Richard Boyatzis, and Annie McKee, Primal Leadership: Realizing the Power of Emotional Intelligence (Boston: Harvard Business School Publishing, 2002), p. 92.

[5] Goleman, D., Richard Boyatzis, and Annie McKee, Primal Leadership: Realizing the Power of Emotional Intelligence (Boston: Harvard Business School Publishing, 2002), p.21.

[6] Shechtman, M.R., Working Without A Net: How to Survive & Thrive in Today’s High Risk Business World (New York: Simon & Schuster, 1994), 23.

[7] The CEO disease was first described with this title by John Byrne in “CEO Disease, “ Business Week, 1 April 1991, 52-59.

[8] Kotter, J. P., and J. L. Heskett, Corporate Culture and Performance (New York: Free Press, 1992), 1.

[9] March, J. G., "Exploration and Exploitation in Organizational Learning," Organizational Science 2 (1991): 71-87.

[10] Hammer, M., The Agenda: What Every Business Must Do to Dominate the Decade (New York: Crown Business Press, 2001), 254.

[11] March, "Exploration and Exploitation."

[12] See Marino, V., Diary: Cutting too Close to the Bone, New York Times Sunday, March 31, 2002.

[13] Goleman, D., R. Boyatzis, and A. McKee, Primal Leadership: Realizing the Power of Emotional Intelligence, (Boston: Harvard Business School Press, 2002), p. 9.

[14] Simonton, D. K. , “Creativity as Heroic Risk, Failure, and Acclaim,” in Creative Action in Organizations, ed. C. M. Ford and D. A. Gioia (Thousand Oaks, CA.: Sage, 1995).

[15] Sutton, R., I., Weird Ideas That Work: 11 1/2 Practices for Promoting, Managing, and Sustaining Innovation, (New York: The Free Press, 2002), P. 95.

[16] Sutton, R., I., Weird Ideas That Work: 11 1/2 Practices for Promoting, Managing, and Sustaining Innovation, (New York: The Free Press, 2002), P. 99.

[17] Pfeffer, J. and R. I. Sutton, "The Smart Talk Trap," Harvard Business Review (May-June 1999): 135-42.

[18] Hulbert, Mark, Strategies: Within Companies, Too, Education Proves Its Value. (New York Times Sunday, March 31, 2002., Section 3, p. 6.

[19] [19] Sutton, R., I., Weird Ideas That Work: 11 1/2 Practices for Promoting, Managing, and Sustaining Innovation, (New York: The Free Press, 2002), P. 85.

[20] Sutton, R., I., Weird Ideas That Work: 11 1/2 Practices for Promoting, Managing, and Sustaining Innovation, (New York: The Free Press, 2002), P. 99.