The American Lawyer by Ben W. Heineman Jr. and William F. Lee - May 20, 2010
Law firms have been moving from loosely managed associations of professionals to disciplined business organizations for more than a generation. This shift has caused an erosion of professional values (lawyers' traditional commitment to enhancing society) and has increased the focus on economic return (firms' relentless quest for escalating profits per partner).
But it is now time for a new paradigm for law firm leaders, as past fissures in firms, caused by relentless business pressures, begin to crack open from the earthquake of the Great Recession.
Put simply, managing partners -- working with the partnership -- should seek to forge a better, healthier balance between the firm as professional association and the firm as business organization. Doing this will help increase associate and partner loyalty and morale, improve productivity, create new win-win alliances with clients, better serve society, and enhance the firm's reputation in the profession and in the community. There is, of course, no turning back: Law firms must be run in a businesslike manner. But they should not just be run for the greatest possible economic return. Law firm leaders must emphasize other values as they reorient their firms with respect to their clients, their partners and their associates. And they should redefine their own personal responsibilities and commitments. At the end of the day, they and their partners should restate, for the younger generation, the historic concept of what it means to be a legal professional, which has generally meant that private lawyers have public responsibilities beyond their immediate self-interest and beyond the needs of their immediate clients. We do not underestimate the difficulty of modifying profits per partner relative to other firms as a driving ethos. We do not underestimate the lunar pull of extraordinary absolute compensation in financial services institutions or venture capital firms where envied friends from college earn many multiples of lawyers' pay. We do not underestimate the complex discussion with the star partner about whether she is willing to forgo the free agent draft and give loyalty and community effort to the firm, which provides her with significant compensation, but not necessarily absolute top dollar. But this new leadership mandate is necessary given the secular changes at many firms -- a dramatic end to unceasing growth in associate hiring, leverage, revenues and profits. Additionally, some pillars of practice, such as pyramidal associate structures and the billable hour, are under attack. This new model is necessary even if conditions for economic growth return, because the multiple issues regarding clients, partners, associates and society stemming from the "business model" law firm have been starkly highlighted in the downturn and need to be addressed. Here are our priorities for this new model. (We recognize, of course, that some firms are already addressing these issues.)
• In good economic times and bad, firms should not hire fodder -- but, rather, fewer young lawyers who can be given clear, sequential, systematic and organized competency training, who can have real responsibility and accountability at an early stage in their careers (through pro bono work, if necessary), and who can be part of the firm community (understanding its financial situation and its broad footprint), rather than being fed a steady diet of nonchallenging work in isolation. That also means leavening the loaf of specialization with broader assignments, too. Taking these steps will ultimately involve real mentoring, counseling, and commitment from partners who actually care about the development of young professionals, and who are willing to spend real time evaluating work and discussing, in some detail, strengths and areas for improvement. Meaningful merit-based evaluation, compensation and promotion of associates -- turning away from lockstep treatment -- is based on such a commitment.
Ben W. Heineman Jr., former General Electric Company senior vice president-general counsel, is currently senior fellow at Harvard Law School's Program on the Legal Profession and Program on Corporate Governance, and senior fellow at Harvard Kennedy School's Belfer Center for Science and International Affairs (email@example.com). William F. Lee is co-managing partner of Wilmer Cutler Pickering Hale and Dorr and teaches at Harvard Law School (firstname.lastname@example.org). Heineman is a contributing editor to The American Lawyer.