Originally published in The Legal Intelligencer/law.com
Smart Strategy
A leader is anyone who influences others. Not every leader is an effective one. —The Tilt Institute
Partner autonomy has long been heralded as a distinct strength of many firm cultures. It empowers entrepreneurial action, fosters a sense of ownership and accompanies individual initiative. It exists alongside the right to vote in many law firm business structures today, suggesting the voice of each partner carries weight and ought to be heard. At a personal level, autonomy is a hallmark trait. Lawyers embody it at a greater level than average folks, according to research by Dr. Larry Richard. Autonomy, though, brings with it not only strength, but also liability.
Law firm leadership extends beyond formal titles. It encompasses most roles—from associate to finance manager to senior counsel—that manage, direct or otherwise engage regularly with those around them. As business owners, partners hold significant sway. They are nearly always, regardless of formal title, leaders in their firms. Their decisions—and opinions—on client development, matter management, staffing, and firm policy directly impact the firm’s culture, profitability and long-term trajectory.
The past decade has brought a significant rise in internal conflict within partnerships. Partners, influenced by personal preferences, biases and social influences, are wielding their autonomy to speak out (often forcefully) in favor of or opposition to broader firm decisions. This dynamic is leaving many law firms at a disadvantage. Law firm leaders are increasingly saddled with dissent and opt-out mentalities that threaten firm culture, impede operational efficiency and ultimately hinder the firm’s ability to thrive in a competitive legal landscape.
Understanding Executive Magnification: The Amplified Impact of Partner Decisions
A partner’s attitude about business development, client service, billing practices, and team management sets the tone for the entire team. If a partner prioritizes aggressive billing tactics over client satisfaction, it can damage the firm’s reputation and lead to client churn. Similarly, if a partner stresses billable work for associates over brand-building or networking activities, it can negatively impact the next generation’s ability to be successful upon promotion to partner. This effect is known as executive magnification. Executive magnification refers to the ripple effect a leader’s actions or words can have across the organization. A seemingly casual comment or preference expressed by a partner can be interpreted by associates and staff as a firmwide mandate, leading to a cascade of wasted efforts or misaligned priorities. Think, for example, of a new managing partner who nonchalantly expresses a preference for Starbucks coffee. Within weeks, all of the break rooms have been outfitted with an array of upgraded products and offerings bearing the Starbucks brand.
The Perils of Dissonance: When Partner Actions Clash With Firm Strategy
Perhaps one of the more damaging ways partners deploy executive magnification is in speaking —or acting—in defiance of firm policies, strategies or goals. Whereas the autonomous voice of a partner-as-business-owner is essential in the “board room,” it is imperative partners-as-leaders act and speak in alignment with broader, long-term goals of the firm outside of the board room.
When partners pursue strategies that diverge from the firm’s overall direction, it creates dissonance within the organization. Imagine a scenario where a senior partner, known for their rainmaking prowess, announces proudly she has “never” entered her hours on a weekly basis in compliance with firm policy; or one where a respected partner mocks another for taking paternity leave. Situations such as these not only undermine firm efforts to strengthen financial outcomes and adopt policies to retain talent, they also leave a black mark on culture and diminish productivity and engagement. Misalignments such as these often lead to:
Diminished profit margins: Internal conflict and dissent create friction—lengthening decision times, slowing progress and leading to inefficiencies. Mixed messages and speed bumps force others to navigate politics rather than do their job most effectively. It can leave a firm at a competitive disadvantage. While one firm is spending countless hours attempting to appease the loudest voice in the room, others are making progress and focusing on client service delivery. All of these scenarios cost the firm time and money.
Reduced Productivity and Employee Dissatisfaction: Partner actions that contradict firmwide initiatives spur uncertainty and confusion. This lack of clarity decreases productivity and dampens morale. Employees, unsure of whom to follow or how to prioritize their work, ultimately get frustrated, experience higher levels of burnout and, in time, choose to leave. Plus, negativity is contagious. One “bad apple” on a team or in a room can depress the energy (and output) of the entire group, magnifying the impact of burnout beyond those who are personally experiencing it.
Damaged Client Relationships and Growth Opportunities: Clients partner with service providers that reflect their values, stated business goals and service standards. At a global level, talent is increasingly looking to organizations to take a stand on sometimes difficult political and social issues. These same clients are looking to their firms to do the same. When partner autonomy stands in the way of—or, worse, contradicts—a firm’s outward stance, it can deteriorate trust in the firm, undermining the client relationship. In the past few years alone, many law firms have suffered significant client losses due to controversial choices. Others have parted ways with prized partners whose autonomy exceeds their willingness to align. These challenges will continue to plague law firms in the coming years.
What Partners and Firms Can Do to Enhance Alignment
Foster Open Dialogue and Transparency: Transparent and consistent communication channels are paramount in aligning partners with firmwide objectives. Regular town hall meetings, strategic planning sessions, and internal newsletters should be established avenues for disseminating information and fostering dialogue. Implementing feedback mechanisms through surveys or suggestion boxes allows partners to voice concerns and gain clarity on strategic priorities. Accessibility of leadership at all levels is crucial for maintaining open communication and addressing concerns promptly. Additionally, utilizing technology platforms like internal forums or collaboration tools can facilitate real-time communication and knowledge sharing among partners.
Encourage Constructive Dissent: While open communication is crucial, fostering a culture that embraces constructive dissent is equally important. This allows partners to voice concerns and propose alternative viewpoints. This could involve establishing a dedicated task force to evaluate and address internal disagreements regarding major strategic decisions. Training leaders in effective conflict management ensures that disagreements are handled constructively, minimizing disruptions and fostering collaboration.
Investing in Leadership Development: Comprehensive training programs focused on communication, conflict management and change leadership empowers partners with essential skills. Leadership retreats that include workshops on emotional intelligence, decision-making under uncertainty and team dynamics can equip partners to navigate complex challenges effectively. Providing ongoing mentoring and coaching opportunities helps leaders refine their skills and adapt to evolving organizational needs.
Promoting a Culture of Growth and Learning: Embracing a growth mindset and learning from setbacks fosters a culture where mistakes are viewed as opportunities for improvement. Celebrating successes and encouraging continuous development, such as through mentorship programs and cross-functional project teams, cultivates resilience and agility among partners and employees alike. Creating opportunities for innovation and experimentation encourages partners to explore new approaches and contribute to long-term firm success.
Partner autonomy is a double-edged sword for law firms. While it empowers individual initiative and fosters a sense of ownership, it can also lead to internal conflict and hinder firmwide goals if not managed effectively. By implementing strategies for communication, conflict resolution, and leadership development, law firms can harness the power of partner autonomy while mitigating its downsides. In today’s dynamic legal landscape, fostering a culture of alignment, innovation and continuous learning will be crucial for firms to thrive in the years to come.
Reprinted with permission from the [July 17th edition of the Legal Intelligencer] © 2024 ALM Global Properties, LLC. All rights reserved. Further duplication without permission is prohibited, contact 877-256-2472 or asset-and-logo-licensing@alm.com.