Producing Benefits Through Firm Culture

What tools can be used by an executive committee to take a fresh look at its firm, sustain a successful culture and make strategic decisions? Remember: No decision is a decision! Let's ask some questions about your executive committee.

Casey Stengel once said: “It's easy to get the players. Gettin' them to play together, that's the hard part.” This article identifies the tools that provide a better return on your investment in human and technological resources.

Have you ever heard of the wheel theory? If the big wheel turns one-eighth a turn, the next smaller wheel tied to it turns three times, and the next smaller wheel turns 10 times. When the big wheels are vacillating from one direction to another, the wheels at the bottom are spinning first one way and then another. Every change in direction or focus causes friction and insecurity which surfaces as small crises and inefficiency. For example: when a member of the executive committee decides to adopt a “minority opinion” and broadcasts that fact to those around it, you have dysfunctional behavior and an inability to make things happen. It divides the firm into constituencies who cannot act as a focused group and therefore waste time and effort arguing about where the firm is going and how to get there.

Where should an executive committee spend most of its time?

A box is divided into four quadrants of activity: Quadrant I contains Urgent and Important activities. Quadrant II contains Not Urgent and Important activities. Quadrant III contains Urgent and Not Important activities and Quadrant IV contains Not Urgent and Not Important activities. (Source: Steven R. Covey's “Time Management Grid” which appears of page 151 of his book, The Seven Habits of Highly Effective People.) According to Covey, if fire departments did not spend any time in Quadrant II setting up ways to prevent fires, there would be a fire station today on every corner. Executive committees have the same problem: By spending all of their time in Quadrant I and III, they create crises downstream in the organization. Most crises that arise from such inattention to Quadrant II issues cause a destruction of the glue that holds a firm together. Thus, administrators should encourage their executive committees to spend time in Quadrant II thinking about improving the flow of legal services to clients.

The next step is to improve upon the “norms” of your law firm. I have yet to find a successful law firm that doesn't have, in some form, the following:

• Values and Beliefs known and followed by everyone in the firm. A series of statements that differentiate the culture of the firm from other firms. A good statement: “We believe that responsively serving the interest of our clients benefits all lawyers and employees of the firm.” A poor and vague statement: “Everyone is important to us.” How? Why?
• A Vision statement that describes the kind of firm it wishes to be from the perspective of the partners and employees and the clients. The vision is a focused concept with a sense of noble purpose and a plausible chance of success. A good statement: “To be recognized by our clients as their problem solvers providing innovative and cost effective solutions.” A poor and vague statement: “We want to be the best law firm in Chicago.” Why? How?
• Mission Statements at the firm, department, client segment, and practice group levels that are clear, yet concise. The mission statement reflects the vision of the organization for internal communication and priority setting. The mission statement is an internal document.

Particularly, a mission statement communicates how the law firm must do business ' now and in the future ' and should provide enough information to encourage the development of strategies, programs, and activities which will be consistent with the vision and help achieve it. It defines the core clients, the value it offers those clients, and any special means it will use to create value for them to win and keep their business.

A mission statement should inform the reader about most of the following:

1. Market Segment (client segments), eg, fast growth companies, wealthy individuals and estates, commercial loan and workout divisions of large commercial banks, and similar segments.

2. Market Location and Size, eg, Chicago, Cook and surrounding counties, North-Central U.S., national, and international.

3. Market Services (bundles of services offered by the firm as defined by the clients), eg, a broad range of services that help start-up companies grow and prosper, trademark and patent protection, capital formation, and similar sets of services that meet the needs as defined by and add value to the clients identified in the Market Segment above.

4. Position in the Market with respect to the market segment, location and services selected, eg, dominant, preeminent, participant, special niche.

5. Profitability, eg, very profitable, profitable in line with the general market serviced, competitive or even “comfortable” profitability.

For example, a vague statement would be: “To provide services to young, entrepreneurial companies needing business transaction services.” A better statement would be: “Smith & Smith seeks to be in the top ten law firms serving the business interest of growth oriented, privately held companies based in the Chicago metropolitan area. Our core services are capital formation for the owners and management of the risks that could dissipate essential and critical business resources. In order to sustain the investments to accomplish this mission, Smith & Smith must maintain a ninety-five percent realization rate on its best market billing rates.”

The Next Step: Living The Statements

Now blow up copy of the values, vision and mission onto a poster board and take them with you to all executive committee meetings.

For many firms, constant reference to these statements enables the executive committee to focus on the right issues and makes their decision process more efficient. During every meeting, the members refer to the statements and ask: “How does this decision or effort reinforce the values, vision, and mission of the firm?” For example, “We have decided to eliminate our charges for non-direct costs such as facsimile and copies for the purpose of supporting our values, vision, and mission as follows….” and “Our realization on billing rates will go up from this effort because….”

At least once a quarter, the executive committee should prepare for and commit at least four hours of meeting time to Quadrant II thinking. Make a list of strategic issues and keep updating it. Focus your time on what can specifically be done and make small improvements where success can be measured.

Every firm needs the touch stones described here to deal with the increasing number and complexity of decisions required to succeed in this competitive environment. Without them, the units of the firm churn away with little synergy and, worse yet, with far too many leaks in client service and net income.

What tools can be used by an executive committee to take a fresh look at its firm, sustain a successful culture and make strategic decisions? Remember: No decision is a decision! Let's ask some questions about your executive committee.

Casey Stengel once said: “It's easy to get the players. Gettin' them to play together, that's the hard part.” This article identifies the tools that provide a better return on your investment in human and technological resources.

Have you ever heard of the wheel theory? If the big wheel turns one-eighth a turn, the next smaller wheel tied to it turns three times, and the next smaller wheel turns 10 times. When the big wheels are vacillating from one direction to another, the wheels at the bottom are spinning first one way and then another. Every change in direction or focus causes friction and insecurity which surfaces as small crises and inefficiency. For example: when a member of the executive committee decides to adopt a “minority opinion” and broadcasts that fact to those around it, you have dysfunctional behavior and an inability to make things happen. It divides the firm into constituencies who cannot act as a focused group and therefore waste time and effort arguing about where the firm is going and how to get there.

Where should an executive committee spend most of its time?

A box is divided into four quadrants of activity: Quadrant I contains Urgent and Important activities. Quadrant II contains Not Urgent and Important activities. Quadrant III contains Urgent and Not Important activities and Quadrant IV contains Not Urgent and Not Important activities. (Source: Steven R. Covey's “Time Management Grid” which appears of page 151 of his book, The Seven Habits of Highly Effective People.) According to Covey, if fire departments did not spend any time in Quadrant II setting up ways to prevent fires, there would be a fire station today on every corner. Executive committees have the same problem: By spending all of their time in Quadrant I and III, they create crises downstream in the organization. Most crises that arise from such inattention to Quadrant II issues cause a destruction of the glue that holds a firm together. Thus, administrators should encourage their executive committees to spend time in Quadrant II thinking about improving the flow of legal services to clients.

The next step is to improve upon the “norms” of your law firm. I have yet to find a successful law firm that doesn't have, in some form, the following:

• Values and Beliefs known and followed by everyone in the firm. A series of statements that differentiate the culture of the firm from other firms. A good statement: “We believe that responsively serving the interest of our clients benefits all lawyers and employees of the firm.” A poor and vague statement: “Everyone is important to us.” How? Why?
• A Vision statement that describes the kind of firm it wishes to be from the perspective of the partners and employees and the clients. The vision is a focused concept with a sense of noble purpose and a plausible chance of success. A good statement: “To be recognized by our clients as their problem solvers providing innovative and cost effective solutions.” A poor and vague statement: “We want to be the best law firm in Chicago.” Why? How?
• Mission Statements at the firm, department, client segment, and practice group levels that are clear, yet concise. The mission statement reflects the vision of the organization for internal communication and priority setting. The mission statement is an internal document.

Particularly, a mission statement communicates how the law firm must do business ' now and in the future ' and should provide enough information to encourage the development of strategies, programs, and activities which will be consistent with the vision and help achieve it. It defines the core clients, the value it offers those clients, and any special means it will use to create value for them to win and keep their business.

A mission statement should inform the reader about most of the following:

1. Market Segment (client segments), eg, fast growth companies, wealthy individuals and estates, commercial loan and workout divisions of large commercial banks, and similar segments.

2. Market Location and Size, eg, Chicago, Cook and surrounding counties, North-Central U.S., national, and international.

3. Market Services (bundles of services offered by the firm as defined by the clients), eg, a broad range of services that help start-up companies grow and prosper, trademark and patent protection, capital formation, and similar sets of services that meet the needs as defined by and add value to the clients identified in the Market Segment above.

4. Position in the Market with respect to the market segment, location and services selected, eg, dominant, preeminent, participant, special niche.

5. Profitability, eg, very profitable, profitable in line with the general market serviced, competitive or even “comfortable” profitability.

For example, a vague statement would be: “To provide services to young, entrepreneurial companies needing business transaction services.” A better statement would be: “Smith & Smith seeks to be in the top ten law firms serving the business interest of growth oriented, privately held companies based in the Chicago metropolitan area. Our core services are capital formation for the owners and management of the risks that could dissipate essential and critical business resources. In order to sustain the investments to accomplish this mission, Smith & Smith must maintain a ninety-five percent realization rate on its best market billing rates.”

The Next Step: Living The Statements

Now blow up copy of the values, vision and mission onto a poster board and take them with you to all executive committee meetings.

For many firms, constant reference to these statements enables the executive committee to focus on the right issues and makes their decision process more efficient. During every meeting, the members refer to the statements and ask: “How does this decision or effort reinforce the values, vision, and mission of the firm?” For example, “We have decided to eliminate our charges for non-direct costs such as facsimile and copies for the purpose of supporting our values, vision, and mission as follows….” and “Our realization on billing rates will go up from this effort because….”

At least once a quarter, the executive committee should prepare for and commit at least four hours of meeting time to Quadrant II thinking. Make a list of strategic issues and keep updating it. Focus your time on what can specifically be done and make small improvements where success can be measured.

Every firm needs the touch stones described here to deal with the increasing number and complexity of decisions required to succeed in this competitive environment. Without them, the units of the firm churn away with little synergy and, worse yet, with far too many leaks in client service and net income.