The Challenges in Law Firm´s Governance

In this present discussion, I am going to talk about corporate law offices (with dozens or sometimes hundreds of lawyers and partners), designed to serve medium and large companies with all their universe of legal challenges in an increasingly regulated and complicated world.

Before discussing the topic itself, let us contextualize a little better this entity called “law office”, in the subjective and objective fields.

In the first one, the subjective, we have the following:

Traditionally, these offices are formed by a group of lawyers who have certain features in common as: technical quality in specific areas of law, entrepreneurial spirit and good relationship, who decide to get together due to the mutual use of each one of their skills. They may have grouped themselves in two completely different times of their lives, that is, in the very beginning of their individual careers, or as a “split” of a bigger office, but the reasons remain the same.

Under the rational point of view, this amalgamation makes all sense once the technical complementarities create a more comprehensive capacity. Nevertheless, these members who are already partners are human beings and as such, they must have something bigger than a simple technical-commercial interest to keep them together as time goes by.

In addition to the technical affinities, other ones (not less important) of a purely emotional-psychological  nature should also be part of the choice of this partnership, that is, companionship, trust, common goals of long run and, the most important of all, personal and ethical affinities!

As already mentioned in another past discussion, it is necessary to understand how the lawyer thinks, how he behaves, and which kind of educational training he had in the past. This professional has a very low tolerance to failures, a high degree of skepticism, a great autonomy and low resilience and at last, little or no academic training in management. (see Professional Help in Law Firms Management).

Another point to be considered is the outdated concept that the great majority of office leaders have that “a law office is not a company”, compounded  by other concept existing in the status of the class that says that law has no trading objective.

In the second field, the objective, we have the following:

Again I go back to the origin, in the incorporation and evolution of those offices, which most of the times, start as small offices with scarce or almost no administrative structure. The problem is not related to starting up with a poor administrative structure, but, on the contrary, to consider that this structure is a necessary evil and a minor component in the organization.

This concept ends up, along the way, creating a deficient administrative structure, and also poorly remunerated (where the cheapest professional ever is hired), and, as a consequence, poorly prepared and with a low intellectual capacity, generating a gap among the three structures (administrative, productive and managerial), and mainly unable to supply the management with information and high quality reports and in due time.

The governance, in order to exist and to be effective, must be supported by a tripod formed by an active leadership of good quality, a motivated team that is aware of the values and objectives of the institution and a technical-administrative infrastructure that is able to provide support for decision making. In the offices, it is essential to assume that these entities are companies that aim at getting profits, and need to be treated accordingly.

Leadership is an innate feature (there are several books that even classify its styles) that not all people have naturally in their personalities, but in its absence, may be learned and trained!

One of the major roles of a leader is to establish (and clearly communicate at all levels) the values and targets of all organization in a clear way so that each person can be completely engaged when performing his/her job, taking decisions or having any other professional attitude involving the institution and himself/herself.

Team motivation is probably the most difficult part to be achieved as it involves human relationship and the way how the managers deal with their subordinates. In law offices, companies that are solely and exclusively formed by people, there is one more complicating factor as the leadership is not exercised due to a chart with strict departments and job posts, but, in fact, almost exclusively by the professional respect (technical know-how) that each attorney has towards  his/her most experienced  mate. And your “boss” does not always fit in this situation!

In those less strict structures, the existence of a structure of attraction and maintenance of talents made up by a clear career plan with the well defined attributes that the institution expects from its stakeholder at all levels and a judicious assessment method and reward and the offer of professional challenges at the same level of each stage of the career are determining factors for the creation and maintenance of a motivated and productive team.

Last, but not least, the technical-administrative structure represents, in my opinion, the Achilles’ heel in most offices because, as we have already said, it is considered to be a necessary evil and receives less attention and investments.

For the achievement of an administrative structure that is coherent with the productive structure we need to invest in order to hire qualified staff, to do a lot of training and to invest heavily in applied technology.

The creation and standardization of procedures, the pro-active maintenance of all registers and, mainly, the determination of which information must belong to those registers, form the frame work for the creation of a robust and reliable database in which the reports used in the decision making actions are reliable. Good quality systems (specified for the sector) and a robust IT structure are fundamental, but alone, without the previous part of this paragraph, do not solve the problem.

The metaphorical comparison I always make with the computers, the data they are based on and the reports they create is that they are mere “fans”. If you open a bottle of perfume behind it, this fan will spread the pleasant scent of that perfume across the environment, but, if in the other hand, you open a container with shit, the fan will spread this unpleasant stench across the room!

External and experienced support, exempt from interactions and internal relationships can help a lot in the guidance and training of leaders and in a more effective and professional management of their businesses.