Leadership Transition in a Law Firm

How does a law firm transition leadership from the founders or the current set of leaders to the next generation of leaders? There are three models of transition: King to Prince, CEO with credibility to COO with credibility and accepted founder/leader to people who should become leaders. Obviously the last model is the most difficult to execute. The approach for this transition model is also applicable to the first two. The King to Prince will probably not make the transition because benevolent despotisms crash if the Prince has not gone through a credibility building process. The CEO to the COO assumes the COO has gone through the process outlined below.

Has Leadership Taken a Backseat?

Over the years, I have found that leadership has levels, most of which need to be experienced to produce a successful leader. There are exceptions, but for the most part, leaders have to go through each level. Those who think they have earned the right to be leaders may try to skip a step in the process, but if they don't have the vision and capability to be leaders in the first place, skipping a “learning level of leadership” will backfire. However, there seems to be a lack of leaders in law firms today, creating a need for potential leaders to skip a level. The following is a process for skipping a level without creating a management crisis in the firm.

What got firms into the position of not having a next generation of leaders? Increasing pressure to maintain personal compensation levels has put pressure on lawyers to bill more hours and control more billings. Leadership is not perceived as important because individual profit performance is more important to compensation than leadership. But leadership is critical and here is why. First, leaders enable individuals to excel because they encourage people in the firm to collaborate and be accountable to each other for the success of the firm. Second, leaders enable people to understand and comply with the core values of the firm, which encourages them to have a calling higher than their own personal agendas. Third, leaders create a learning organization which empowers people who take risks to improve client service and execute a collaborative team approach in delivering legal services while measuring performance based upon the activities that will improve the competitive position of the firm.

Leaders Bring Vision

I have asked groups of managing partners from very successful firms what they looked for in the next generation of leaders. Here are their three responses:

• The next leaders care more about the firm than their clients recognizing that if the firm does not work in a collaborative way, their own clients will suffer.
• The next leaders care more about the development of associates into team leaders than hoarding those associates for their own clients and matters.
• Finally, they care more about the firm's client service than their personal production of billings.

Leaders enable people to excel. People excel when they understand what is expected of them and they like where their firm is headed. The current leader must develop what he or she thinks the vision of the firm should be based his or her history of guiding a successful firm. A vision is focused beyond platitudes. It must show a value creation premise that people can actually picture existing. A vision has a noble purpose – something that is really worth doing; something that can create value, make a contribution, make the world a better place and win people's commitment. A vision is plausible – something people can realistically believe to be possible and, if not perfectly attainable, at least plausible to strive for. A good example that shows focus, shows a purpose for the firm, has a plausible chance of success and shows the how a firm will add value is: “To be the leading firm in the Southeast in providing management-oriented solutions to complex corporate legal issues faced by sophisticated businesses and industry in the region.”

Next, the leader must recruit a small group of younger leaders in the firm who will buy into that vision; we'll call them the core coalition. The leader must encourage collaboration. A true partnership is supposed to be a collaborative effort. Collaboration is defined as a group of people bound together by a common vision and who are accountable to one another for the accomplishment of the vision. Collaboration is not collegiality. Collegiality is defined as a group of people bound together by a common profession and independent of one another in their actions. With collaboration as the foundation stone, lawyers and staff feel they can trust others to perform the critical tasks needed to make the firm competitive and strong. Collaboration encourages a reinforcement of core values and a learning organization.

A leader calls people to a higher purpose through the establishment and reinforcement of core values. How does the leader develop them? The leader, with the core coalition should recount the stories that made the firm successful over the years. These stories show how people treated clients, how the most successful lawyers and staff were mentored and treated with respect, how the ethics and the integrity of the law firm are reinforced, and how the firm dealt with getting a fair return on the timekeepers while adding value to the services the firm offered. Now the leader and the core coalition must make a covenant that they will reinforce and live by the core values. Of course, they will see others in the firm who do not want to abide by those values. The core coalition members must put themselves in a coaching role to help the violators see the benefits of the core values and help the violators conform.

Some examples of core philosophy values may include:

• “Operating ethically as individuals and as an organization.”
• “Mutual respect and loyalty between partners, employees, and the firm.”

The people values may include:

• “Open, honest, and direct communication.”
• “Enthusiasm and positive attitude.”
• “Accepting and respecting people for their individual contributions.”

The performance values may include:

• “Consistently meeting or exceeding the needs of our internal and external clients.”
• “Consistently producing a high value-added, quality legal services and products.”
• “Long-term partnering relationships with our clients.”

The leader creates a learning organization; where people are encouraged to be innovative and take risks in improving the effectiveness and efficiency of the practice. In the learning firm, the result of a mistake is not punishment and ridicule but coaching and encouragement. As lawyers and staff see the firm's efforts to improve the quality of their practice and their life, they become more enthusiastic, more focused on client service, and unplanned turnover is reduced. Clients see this enthusiasm and the firm's lawyers and staff become partners and not vendors. Financial rewards will follow. The coalition of current and future leaders must adopt the learning organization model and constantly remind their teams how the firm's vision is being sought through activities that improve the competitive position of the firm and not through internal competition for piling up hours and billings. Support teams must see that the surrounding structures – reward and recognition systems, for example – will be in tune with the new behavior. This type of transition process will, over the years, anchor the behavior in the fabric of the firm and build the credibility for the new leaders. This approach has been used successfully in building leaders through change programs related to realization improvement, turnover reduction, evaluation of new offices and mergers, governance revisions, partnership review and evaluation, and planning. Here is a planning example.

I was asked by the managing partner of a firm who was a friend of a West Coast firm to help them make the leadership transition because he could see many of the most promising young leaders getting discouraged about where the firm was going. They would soon bolt or conduct a destructive coup. The most credible leader, the managing partner, assembled a task force around himself including another visionary, senior partner and a “transition” partner from a younger group who had credibility with both the senior and junior partners. He also brought in two junior partners who were very well respected by their peers. The leader had a clear understanding of the vision and the core values of the firm and asked this coalition to revise, add to, and confirm them. The covenant was made to support each other in a planning effort that would look at the directions their clients and markets were taking the firm and identify clear trends. They were to identify the issues and implications that had to be put on the table for the firm to be responsive to the client needs while sustaining the profitability of the firm. Not only was each member tasked with getting the input from their peers but they were also asked to put a plan together, build a consensus within the partnership for their plan, create the measures to determine progress, as well as take the responsibility for creating an action plan and executing that action plan. As part of the initial meetings, the coalition identified what it had to do to be successful and established critical measures that would demonstrate progress. Measures included completion of certain activities by a particular date and the production of documents that would be used to explain the trends, implications, and course of action to the partnership. The compensation of each member of the coalition reflected their contribution, or lack thereof to the effort.

Over the years, this task force became the recognized track to leadership in the firm. Every 3 years, two of the members would rotate to take on other leadership positions in practice group leadership, recruiting, practice development, associate development, or other critical firm activities. As a check, the managing partner had full discretion over who could participate as a member of the task force.

Transition to Vision

Leadership transition is tough. It requires a common understanding and commitment to a vision and a set of core values. Transition requires a core coalition of people who are willing to spend the time and take the risk of bucking the culture of independence and individual profit centers. With a collaborative effort and a covenant to support one another, there will be change. I once heard a great managing partner make the following, very insightful statements to his core coalition: “Remember that the core coalition is a team focused on positive change. For the purposes of decision making, a team may be defined as follows: A group of people who need one another to produce a result.”

How does a law firm transition leadership from the founders or the current set of leaders to the next generation of leaders? There are three models of transition: King to Prince, CEO with credibility to COO with credibility and accepted founder/leader to people who should become leaders. Obviously the last model is the most difficult to execute. The approach for this transition model is also applicable to the first two. The King to Prince will probably not make the transition because benevolent despotisms crash if the Prince has not gone through a credibility building process. The CEO to the COO assumes the COO has gone through the process outlined below.

Has Leadership Taken a Backseat?

Over the years, I have found that leadership has levels, most of which need to be experienced to produce a successful leader. There are exceptions, but for the most part, leaders have to go through each level. Those who think they have earned the right to be leaders may try to skip a step in the process, but if they don't have the vision and capability to be leaders in the first place, skipping a “learning level of leadership” will backfire. However, there seems to be a lack of leaders in law firms today, creating a need for potential leaders to skip a level. The following is a process for skipping a level without creating a management crisis in the firm.

What got firms into the position of not having a next generation of leaders? Increasing pressure to maintain personal compensation levels has put pressure on lawyers to bill more hours and control more billings. Leadership is not perceived as important because individual profit performance is more important to compensation than leadership. But leadership is critical and here is why. First, leaders enable individuals to excel because they encourage people in the firm to collaborate and be accountable to each other for the success of the firm. Second, leaders enable people to understand and comply with the core values of the firm, which encourages them to have a calling higher than their own personal agendas. Third, leaders create a learning organization which empowers people who take risks to improve client service and execute a collaborative team approach in delivering legal services while measuring performance based upon the activities that will improve the competitive position of the firm.

Leaders Bring Vision

I have asked groups of managing partners from very successful firms what they looked for in the next generation of leaders. Here are their three responses:

• The next leaders care more about the firm than their clients recognizing that if the firm does not work in a collaborative way, their own clients will suffer.
• The next leaders care more about the development of associates into team leaders than hoarding those associates for their own clients and matters.
• Finally, they care more about the firm's client service than their personal production of billings.

Leaders enable people to excel. People excel when they understand what is expected of them and they like where their firm is headed. The current leader must develop what he or she thinks the vision of the firm should be based his or her history of guiding a successful firm. A vision is focused beyond platitudes. It must show a value creation premise that people can actually picture existing. A vision has a noble purpose – something that is really worth doing; something that can create value, make a contribution, make the world a better place and win people's commitment. A vision is plausible – something people can realistically believe to be possible and, if not perfectly attainable, at least plausible to strive for. A good example that shows focus, shows a purpose for the firm, has a plausible chance of success and shows the how a firm will add value is: “To be the leading firm in the Southeast in providing management-oriented solutions to complex corporate legal issues faced by sophisticated businesses and industry in the region.”

Next, the leader must recruit a small group of younger leaders in the firm who will buy into that vision; we'll call them the core coalition. The leader must encourage collaboration. A true partnership is supposed to be a collaborative effort. Collaboration is defined as a group of people bound together by a common vision and who are accountable to one another for the accomplishment of the vision. Collaboration is not collegiality. Collegiality is defined as a group of people bound together by a common profession and independent of one another in their actions. With collaboration as the foundation stone, lawyers and staff feel they can trust others to perform the critical tasks needed to make the firm competitive and strong. Collaboration encourages a reinforcement of core values and a learning organization.

A leader calls people to a higher purpose through the establishment and reinforcement of core values. How does the leader develop them? The leader, with the core coalition should recount the stories that made the firm successful over the years. These stories show how people treated clients, how the most successful lawyers and staff were mentored and treated with respect, how the ethics and the integrity of the law firm are reinforced, and how the firm dealt with getting a fair return on the timekeepers while adding value to the services the firm offered. Now the leader and the core coalition must make a covenant that they will reinforce and live by the core values. Of course, they will see others in the firm who do not want to abide by those values. The core coalition members must put themselves in a coaching role to help the violators see the benefits of the core values and help the violators conform.

Some examples of core philosophy values may include:

• “Operating ethically as individuals and as an organization.”
• “Mutual respect and loyalty between partners, employees, and the firm.”

The people values may include:

• “Open, honest, and direct communication.”
• “Enthusiasm and positive attitude.”
• “Accepting and respecting people for their individual contributions.”

The performance values may include:

• “Consistently meeting or exceeding the needs of our internal and external clients.”
• “Consistently producing a high value-added, quality legal services and products.”
• “Long-term partnering relationships with our clients.”

The leader creates a learning organization; where people are encouraged to be innovative and take risks in improving the effectiveness and efficiency of the practice. In the learning firm, the result of a mistake is not punishment and ridicule but coaching and encouragement. As lawyers and staff see the firm's efforts to improve the quality of their practice and their life, they become more enthusiastic, more focused on client service, and unplanned turnover is reduced. Clients see this enthusiasm and the firm's lawyers and staff become partners and not vendors. Financial rewards will follow. The coalition of current and future leaders must adopt the learning organization model and constantly remind their teams how the firm's vision is being sought through activities that improve the competitive position of the firm and not through internal competition for piling up hours and billings. Support teams must see that the surrounding structures – reward and recognition systems, for example – will be in tune with the new behavior. This type of transition process will, over the years, anchor the behavior in the fabric of the firm and build the credibility for the new leaders. This approach has been used successfully in building leaders through change programs related to realization improvement, turnover reduction, evaluation of new offices and mergers, governance revisions, partnership review and evaluation, and planning. Here is a planning example.

I was asked by the managing partner of a firm who was a friend of a West Coast firm to help them make the leadership transition because he could see many of the most promising young leaders getting discouraged about where the firm was going. They would soon bolt or conduct a destructive coup. The most credible leader, the managing partner, assembled a task force around himself including another visionary, senior partner and a “transition” partner from a younger group who had credibility with both the senior and junior partners. He also brought in two junior partners who were very well respected by their peers. The leader had a clear understanding of the vision and the core values of the firm and asked this coalition to revise, add to, and confirm them. The covenant was made to support each other in a planning effort that would look at the directions their clients and markets were taking the firm and identify clear trends. They were to identify the issues and implications that had to be put on the table for the firm to be responsive to the client needs while sustaining the profitability of the firm. Not only was each member tasked with getting the input from their peers but they were also asked to put a plan together, build a consensus within the partnership for their plan, create the measures to determine progress, as well as take the responsibility for creating an action plan and executing that action plan. As part of the initial meetings, the coalition identified what it had to do to be successful and established critical measures that would demonstrate progress. Measures included completion of certain activities by a particular date and the production of documents that would be used to explain the trends, implications, and course of action to the partnership. The compensation of each member of the coalition reflected their contribution, or lack thereof to the effort.

Over the years, this task force became the recognized track to leadership in the firm. Every 3 years, two of the members would rotate to take on other leadership positions in practice group leadership, recruiting, practice development, associate development, or other critical firm activities. As a check, the managing partner had full discretion over who could participate as a member of the task force.

Transition to Vision

Leadership transition is tough. It requires a common understanding and commitment to a vision and a set of core values. Transition requires a core coalition of people who are willing to spend the time and take the risk of bucking the culture of independence and individual profit centers. With a collaborative effort and a covenant to support one another, there will be change. I once heard a great managing partner make the following, very insightful statements to his core coalition: “Remember that the core coalition is a team focused on positive change. For the purposes of decision making, a team may be defined as follows: A group of people who need one another to produce a result.”