Jack Killion

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Is Your Firm's Culture a Competitive Advantage?

Is Your Firm's Culture a Competitive Advantage?
Every organization has a unique culture. Every law firm has one—whether a one-person firm or a leading international one. Certainly families have their own cultures as do schools, corporations, charities, governments and countries. Cultures can be an important competitive advantage or can drag on performance. In my career as a management consultant, business leader and owner, entrepreneur, adjunct business school professor and board member or trustee, I have observed thousands of cultures. Very few are truly top notch and very few are deliberately developed. Too often the culture of an organization "happens," generally reflecting the style and actions of the organization's leaders.
You can safely assume that as the world economy becomes more global, more volatile, more competitive and more complex, the organizations that thrive will be the ones with a deliberately crafted culture that attracts and retains talented difference makers and fosters open, fluid cooperation, collaboration, loyalty, trust and innovation throughout the entire organization. Organizations that "get" the importance of having and developing a strong culture will have an enormous competitive edge. Going forward this will be one of the key challenges faced by law firm leaders.

What Does a Winning Culture Look Like?

It begins by recruiting the right people. The knowledge age is replacing the machine age and people are the new "capital equipment" driving profitable, sustainable growth. Recently I met the CEO of Ferrero USA, responsible for the successful roll out of the Nutella brand in the United State. He talked about the Ferrero culture being a competitive edge. When we went deeper into their culture, the very first thing he emphasized was the importance of recruiting the right people in the first place. The company would rather run short-handed than make a poor hiring decision.
Having a winning, high performing culture also means giving the people the training and support needed to excel. I have been into many professional firms in which those with obvious "rainmaking" abilities avoid bringing in new business, fearing that the support needed to handle a bigger work load just won't be there. Attracting new business will just mean they have to put in even longer hours. In one case I know, a junior partner of a leading regional law firm hired and personally paid a part-time assistant $30,000 a year to help him keep up with his workload. This was his defensive move to protect his career in a firm that skimped on backup support services. This is not how a winning culture gets developed.
A winning culture knocks down its silos. Law firms, as well as most other types of organizations, too often operate in silos with limited communications and sharing of resources, clients and opportunities among the litigation, trusts and estates, intellectual property, family law, criminal, real estate and corporate finance silos. Often the various silos are battling each other for better compensation, more partnerships and bigger shares of the support services. The internal competition and lack of teamwork and camaraderie hinders or prevents cross selling of firm services with the obvious hit to the bottom line. The silo effect becomes an even bigger issue in law firms with multiple office locations operating in their geographical silos. Having fun while developing trust and respecting and valuing each other's work just doesn't happen easily among partners in a law firm's siloed environment. Our firm has been into many law firms in which the partners spend very little time together learning about each other both professionally and personally and developing the level of team work needed to be super successful.
If you want to have fun sometime, pass around a questionnaire to be answered by each partner that reflects how much they really know about their fellow partners. What does their spouse do? How many kids do they have and how old are they? What are their passions and other areas of interest? What groups or clubs do they belong to? How are they involved in their communities? What are their personal or family challenges?
A winning culture minimizes the challenges created between the various levels within an organization. Everybody within a law firm, from the managing partner to the youngest associate to the receptionist manning the front desk, needs to feel important, trusted, respected, valued and committed to helping grow the practice.
Responsibility for sensibly eliminating barriers to growth that come from having a rigid, layered organization falls on the top management and their actions. They need to set the example with their actions of how members of the firm at various levels can and should work together.
Here's an example of a New York law firm's top manager reinforcing their rigid multi-layer way of working together. Recently, our business development coaching firm was asked to propose a program for helping grow the practice (actually starting with stopping the serious business decline) of a major nationwide law firm.
While the partner kept us cooling our heels in the reception area (he was too busy to start our meeting on time) we started talking with the receptionist who was an absolute joy to meet and a really special face of the firm for visitors to meet. She had been with the firm for eight years. She lived in the Poconos and commuted by bus over two hours each way, often longer. She left home at 5 a.m. and often did not get home until 8 or 9 p.m. Doing a rough calculation in my head, I concluded that in eight years with the firm she had made at least 2,000 round trips, sitting next to 4,000 other commuters, some of whom must have been clients for her firm. When I asked her if she had a business card from the firm to give people she meets on her trips to/from the city, she said no. When I asked her if she frequently talked about other riders' businesses she said yes. When I asked her if she ever referred a fellow traveler to any of the partners, she said no. She really didn't know the partners and what each did.
Later in our introductory meeting with the senior partner in this 150-attorney office, I steered the conversation around to their very special receptionist. He didn't know her name. He didn't know how long she had been with the firm. He didn't know her commute. He knew nothing about her family (married with two kids) or her educational background or her aspirations. He could not think of a way she might positively impact the growth of the firm and the New York office's practice specifically.
I was hardly surprised this firm was struggling. I think their struggles will only get worse under leadership this distant, this removed, this uncaring.
We were retained by another local, four-partner family law firm. The partners were frustrated they were the only ones bringing in new business despite a health bonus system to incentivize others in the firm to attract new clients. They described the bonus system as being available to everyone in the firm. They corrected themselves when I asked if the bonus system included the bookkeeper, the receptionist and the paralegals? I asked if all these and other support staff had their own firm business cards. Again, no.
In a country with about a 50 percent divorce rate, I think the receptionist, bookkeeper and paralegals are almost as likely to run into a potential new client as are the four partners. Again, the layered mentality to developing a successful practice was a barrier to new opportunities.
A winning culture has everyone drinking the same Kool-Aid. Everyone, not just the professional staff, understands the mission and goals of the firm. Every firm member has to be committed and feel a responsibility for doing their share to grow the practice. Everybody working in a law firm, or any other type of organization, is the face of the firm, at least briefly, when they come into contact with people.
I am astounded by how many law firm leaders fail to realize that even the lowest level employee is part of the firm's brand and culture. If a person is important enough to hire, then they are certainly important enough to develop and be made to feel an integral part of the team.
A winning culture is transparent. It's astounding how many organizations, including law firms, share very little key information with their employees. This is particularly harmful when the business is struggling or going through changes and people's stress and anxieties go up and rumors replace facts.
The lack of transparency often can drive the better performers—the ones with the most appeal in the market—out of the firm. The weaker performers, those with less market appeal, stay and get consumed by fear and worrying. Performance slips further down. Security is a key driver for people. Employees need to know the health of and plans for the organization. If they cannot be trusted with information critical to their own future, can they be trusted to continue making their best efforts and remain loyal to the organization?
Recently a major national professional firm was merged into a top five international firm. Word got out. It always does. There were blogs gossiping about the anticipated transaction months before it actually happened. Despite the rumor mill, the top management of the firm being acquired shared the information openly and honestly with very few people in the organization. Even some/many of the more junior partners were virtually left in the dark.
Competitive firms moved quickly and decisively to poach away the firm's top talent. Client service tailed off. Many clients that were aware of the rumors and unable to get an honest explanation took their business elsewhere.
When the merger did happen, many in the firm being acquired felt betrayed and frightened for their future.
I have owned and headed companies that struggled in tough economies. I have owned and sold companies, including one to a European-based acquirer. In all cases, once I had a clear path I wanted to pursue, I was totally upfront with all of the people during in-person meetings at multiple locations. We clearly laid out the facts, the reasoning, the actions being taken and the benefits to those remaining with the company. For those being downsized, we were equally upfront. We provided as much notice as possible. We extended benefits as long as possible. We made many successful introductions and referrals to their future employers.
I recently met a young, talented woman who had developed a solid career in the media buying industry. She had been with the same firm for nearly five years and was earning over $300,000 with salary and bonus serving as the Executive VP, Business Development. I was connected with her as a possible client of her firm. A couple of weeks after we met, she was terminated with 60 days severance pay by the recently formed new management team. It was obvious to me that the company was looking to replace her at a lower compensation level. What kind of a jolt to that company's corporate culture do you think a move like that created? Do you think there were alternative ways to manage this talented performer's role with the organization? I moved my account to another service provider.
People on your team who put their futures and their family's security in your hands need to understand clearly the conditions under which they are working with your organization.
A winning culture has servant leadership focused on performance improvement. Everybody in an organization is important. They all deserve to be treated fairly and with the same high degree of trust, respect and honesty. They need to be given the tools and training to do their jobs. Then top management's really critical role is to eliminate the barriers to people performing exceptionally.
If a law firm is headed by leaders who are constantly out of their offices going through the organization asking "What can I do to make your job easier and to create more personal upside for you?" what do you think this would do for the firm's culture and performance?
Jack Killion is co-founder and partner in Bluestone + Killion, a firm coaching professionals and corporate leaders to accelerate their own careers.Originaly published in the New York law Journal February 2nd, 2015  Read more here:
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