Before we get to the challenge fast-growing firms face, let me ask: Are you watching my FREE Lateral Link Rainmaker Series? It’s available on YouTube. My latest program will teach you how to prepare a business plan that works. If you are interested you can use my 2019 ATTORNEY BUSINESS PLAN TEMPLATE.

When I was being heavily recruited, I wanted to join a firm that was on the move. I wanted to be part of a firm striving to get better. I found what I thought was the perfect firm-and it was for a few years. But, then…

A few years ago I read a Harvard Business School Working Knowledge interview with Thomas J. DeLong: New Challenges in Leading Professional Services:

Professionals in professional service firms are reporting greater frustration, unmet needs, lack of shared purpose, poor morale, etc.

I believe those issues are even more true in fast-growing law firms. I have some first-hand experience.

It was 1998, my old law firm was on the front page of the National Law Journal as the fastest growing firm in the United States.  I was the lawyer who told the reporter:  “At Jenkens & Gilchrist you can dream Texas-sized dreams.”

To be noted as the fastest growing firm was very positive, but there were some underlying challenges our firm leadership either did not see or saw but didn’t address. Jenkens lost its shared purpose. If your firm is growing fast by adding lateral lawyers, you may encounter the same challenges.

In 1999, the Dallas Business Journal published an article: Jenkens & Gilchrist has `never been stronger’. If you have a few minutes, the article is worth reading. We had recently added the Chicago office that would ultimately lead to the demise of the firm.

You might also read a Dallas Morning News Article: How Jenkens Lost Its Way.

Your firm might be a collection of very talented independent contractors, each with a unique story, unique challenges, and unique dreams. If so, you have fiefdoms. A lack of trust/experience will cause partners to hoard their client’s work and will prevent partners from abandoning their own interest in favor of your clients and your firm.

As your firm grows and adds lateral partners you may be challenged to maintain or even identify your constantly changing core values. For example:

  • What does your firm stand for?
  • When you talk about the (name of your firm) culture, what is it?
  • How does your culture or the way you serve clients differ from your competitors?
  • What do you want to be?
  • How does each practice group and office fit into the what your firm stands for and what you want to be?

Years ago I read:

The foundation of cooperation is not really trust, but the durability of the relationship. It is readily evident that firms which have grown through mergers and senior level lateral hires always have less internal cooperation than those which have grown from within.

I remember going to a Jenkens & Gilchrist firm retreat where the theme was “One Firm.” I should have saved the tee shirt and hat with that catchphrase on it. It was a nice theme, but simply not true. A more accurate theme would have been Jenkens & Gilchrist will give you “the platform to build your own independent practice.”

Is it any wonder a fast-growing firm struggles with cross-selling and a lack of office/lateral integration? You won’t achieve success as a fast-growing firm by accident. You have to be very purposeful in your efforts to build trust, collaboration and shared values.

  • I too was a partner in one of the largest law firms in America, indeed, the second largest firm in the world at the time, which wound up as the first major law firm to implode in 1987. Some carry the fact that they were with Finley Kumble as badge of shame, some as a badge of honor, but most have brought along lessons learned at Finley Kumble to advance their careers. Former partners have gone on to not only distinguished careers, but many have risen to important leadership roles in various AmLaw 200 firms.
    What are some of the important lessons learned? These lessons can only be learned by taking a post mortem:
    Institutional use of personal pronoun, lack of integration of clients; disincentivizing cross marketing . The culture of the firm was pockmarked with describing clients as “my” client; my patron. In ten years at the firm nobody, from leadership down, ever described a client as “our client” or the “firm’s client”. Court victories or major transactions closed were described as “I won” or “I closed a major deal.” The result was the message that partners, all largely laterals, owned clients, in the same way that they owned their clothing. These partners were transitory, as were their clients and their own bespoke attire. The consequences were many: Talented partners, when asked to work on matters by department chairs would always first ask “whose client is this?” If the partner claiming ownership of the client was not viewed as “important” partners, these partners, more often than not, declined to work on the matters, claiming being swamped with work to be done for clients of key players. Clients were never integrated in to the firm; rather, they were personal baggage which could come and go with partners who touted client ownership, and threatened to pack their bags and leave with their baggage, if yearend compensation was not to their satisfaction. As the fish smells from the top, so too were the demands of management members in this regard. More than once, executive committee members openly begin discussions with other law firms and they had to be cajoled and importuned to stay. These supplications ultimately were only granted with the provision of an extra pile of cash.
    Singular focus on “originations”. While paying lip service to equally rewarding minders, finder and grinders, it was only finders who were rewarded. Life at Finley Kumble consisted of small alliances. For example, I was a litigator, with a rather handsome book of business. “My” clients frequently needed services of other specialists in other disciplines cold only be cajoled to service these clients by “barter” and other private deals among other firm partners. Typical pacts among partners included deals where I would agree to provide litigation support to corporate partners’ in exchange for my counterpart agreeing to provide these corporate partners with litigation needs; agreeing with others to share “origination” credit. The originators were the partners with big swinging appendages; service partners were mushroom partners, kept in the dark and fed muck. Cross marketing was alien to firm culture.
    Lack of accountability by management and absence of any democracy or transparency. North Korea today has far greater democratic leadership. Management operated in great secrecy, completely covert. On the extremely rare occasion of a branch partners meeting, firm leadership would simply say we’ve only got a few matters of minor relevance to cover. Partners soon understood that this was code for “management has decided on important changes and you are here to rubber stamp these decisions.” A message was openly regularly conveyed: Any dissenters from management decisions would be viewed as not being “team players” and would suffer financially adverse consequences. On one occasion of a visit by the head of the head of the firm’s California office, it happened that a meeting of the New York partners was scheduled. The California leader was utterly and openly and perplexed. He complained loudly of the waste of time and said that there never was a partners’ meeting in California. Many partners, including me, had our names added to the firm’s mailing list so that we could find out what was happening at the firm. In my ten years at the firm, there were only three firm-wide partners’ meetings: Two days of socializing and one formal partners meeting held on the last day with formal attire required. The chairman’s rationale: No revolution ever occurred by people dressed in formal attire.
    Collections, Collections, Collections. Virtually the only time most partners met with the firm’s managing partner was a monthly tete-a-tete in which the firm’s chairman had one and only one purpose: To demand that partners to improve cash collections from “their clients.” Subtle forms of persuasion was applied: The 20th century version of waterboarding. A true story: several months before I was to be elected to the firm’s partnership (after being out of law school for five years), I was responsible for handling a matter of great complexity, with extremely high stakes and a significant amount of publicity, which produced a considerable amount of publicity, and rather handsome monthly fee income, as teams of lawyers were assigned to the matter. As the matter was winding down to our client’s advantage, the managing partner summoned me to his office. He commended me on the great credit brought to the firm by the matter. He then reached to the credenza behind his desk and placed a twelve inch high computer run, which contained the detailed time entries for the matter. Jerry, he said, you are about to be elected to the partnership. You must now start thinking like a partner. I know you worked hard on this case and it looks like it soon will be over. Because the stakes are so high, our client has been paying us huge sums of money monthly without question. As a partner, you should take the firm’s needs in to account. The firm’s interests would be better served if you kept this case going for many months. I nonetheless wrapped this case up quickly, much apparently to the MP’s displeasure. My early admission to the partnership was happily not affected.
    Jerry Kowalski