Stable, transparent, not very complicated, reasonably profitable, and often quite collegial. It also has flaws.

As noted in Part I (330) of this “learning about law firms” series, it’s taken nearly two decades in the trenches, including many years doing applied work with law firms, for a very confusing and counterintuitive insight to come into focus:  Most large firms are not “firms” in the sense of conventional business theory.  Instead, they are a confederation of individual partners building and running leveraged practices in various complementary and adjacent legal specialties.

In today’s essay (Part II), I’ll add a second counterintuitive insight:  For the most part, lawyers pay little or no financial price for organizing themselves as a confederation rather than a firm.  Even in the event of spectacular collapse, as was the case with Dewey, Brobeck, Heller, Howrey, Thelen, and many other large firms, see ALM Staff, “30 Years of Law Firm Collapses: An Annotated Timeline,” Law.com, Oct 29, 2019, there’s always a large cadre of competitor firms looking to give the partners (and their fee-generating practices) a new home.  In most cases, what provides financial security and certainty to an equity partner is seldom the quality of firm-level strategy, or the ability of firm leadership to execute, but instead the health and vitality of their own practice.

This is what distinguishes law firms from conventional businesses. Like Legos blocks, individual law practices can be removed from one law firm and snapped onto another. 
Continue Reading Learning about law firms, Part II: Why confederation is our default model (332)

Lawyers are coming around to the “why” for transformation, but struggle with the “how.” That’s change we can work with.

[Editor’s note:  To keep things fresh, Anusia is periodically handing her NewLaw Fundamentals baton to other provocative change agents in her network.  This month, we are pleased to welcome Anna Lozynski, who, as General Counsel of L’Oréal in Melbourne, Australia, led a large and successful transformation of the company’s legal function.  See “2019 In-House Leaders,” Australasian Lawyer.  Since January 2021, Anna has been in demand as a legal Innovation consultant, tech advisor, influencer & freelance GC. As evidenced by today’s essay, Anna is one of the legal industry’s most persuasive voices for change. wdh]

In 2015, when I pioneered the implementation of legal technology as a General Counsel and self-taught Legal Operations aficionado at the world’s leading cosmetics company, the prevailing questions in the legal industry being posed by skeptical legal lips were “Is Innovation hype?” and “Is it a lawyer’s role to innovate?”

Swipe forward the better part of a decade, in this post-pandemic world, we are observing a plethora of socioeconomic shifts. Many businesses face unprecedented change and guiding the organization and the legal department through this period of transformational change can feel like an oversized ask.
Continue Reading Out with the old, in with the … bold? (331)

“Some things are clearer from a distance.”

20 years ago, I didn’t know very much about law firms, though I was curious and knew law firms were important, at least to students attending law school.  Thus, why not dig into the primary vehicle for a successful and rewarding legal career?

That was my reasoning back in the fall of 2004 when I first taught a course called “The Law Firm as a Business Organization (B573).”  As a junior professor, it was an early win for my career. Foremost, the students gave it strong reviews, which enabled me to teach it again in 2006.  Second, it put me in direct contact with practicing lawyers, as I invited them to class to bring color to the assigned readings. Third, it launched some novel and original research that earned me tenure and opened doors to do challenging applied work in the legal innovation space, including Lawyer Metrics, the Institute for the Future of Law Practice (IFLP), and Legal Evolution.

Now, for the first time in 16 years, I am teaching the Law Firms course, prompting much reflection.  See 2022 Syllabus.  What’s changed more—the law firm market or my perspective?  It’s a close call.
Continue Reading Learning about law firms, 20 years in (330)

A checklist that, if done in order, actually works.

How do you ensure task completion when important projects need to get implemented, when partners seem to have agreed to participate and do their bit, but when you are not really certain that you are going to get committed follow through?

It’s been an old joke within law firms that if a partner has a deadline for producing some task by this coming Friday, when are they most likely to start on it?  And you know the punchline.

Whether it’s in a practice or industry group setting, around the table with the members of your Strategic Planning Committee, or wherever you happened to be working with your fellow colleagues, this seems to be one of the most common challenges and greatest frustrations that I hear about from leaders at every level within firms.  And perhaps worse, the most common excuse seems to be, “I had a client emergency arise.”  And of course, a client excuse trumps everything!
Continue Reading Ensuring follow-through on partner promises (329)

Some of the deepest thinkers on the topic think the answer is yes.

Innovation in the legal sector is primarily carrot driven—those who do it well enjoy greater commercial success.  But would the sector be better off if we went to the trouble of adding a stick (an ethical duty to innovate) to sanction those who fall too far behind?

I asked this question to three thought leaders who work at the forefront of the legal innovation space — Cat Moon, Ed Walters, and Bob Ambrogi — and somewhat surprisingly, all three say yes, offering rationales that are both passionate and persuasive.
Continue Reading Q: Is proposing an ethical duty for legal innovation worth the effort? (328)

Norma Rae (1979), 20th Century Fox.  Photo from The Hollywood Archives, Alamy.

Higher profits come at a cost.  Be careful what you wish for.

As a multiple-decade veteran of Big Law, I vividly remember the many debates about whether practicing law was a profession or a business.  I was often leading these discussions as the firm-wide managing partner of operations of a global law firm.  How could a firm with over 1,000 lawyers, over $1 billion in revenue, and over 20 offices be anything but a business?

In an attempt to gain the latest insights on strategy, finance, human resources, outsourcing, and IT, I eagerly read every issue of Harvard Business Review.  I remember years ago having to overcome the partners’ resistance to being paid only by direct deposit and to increasing the partner-to-secretary ratio beyond 1-to-1.  Now that I am gone from Big Law and managing a law-school legal clinic where I am still practicing law (but with startups and other micro businesses), I frequently question whether being so focused on productivity and efficiency in my former life was worth the price.  Perhaps giving up a few ticks in profits per partner (PPP) would have made my firm a better place.

In this Labor Day essay, I’ll offer some second thoughts on the business of law,
Continue Reading Labor Day reflections, including some second thoughts, on the business of law (327)

Source: Based on Delta Model originally published in Natalie Runyon, “The ‘Delta’ Lawyer Competency Model Discovered through LegalRnD Workshop,” Thomson Reuters Legal Executive Institute, June 14, 2018; see also Post 125 (article by founders of the Delta Model) [click on to enlarge]

Recent changes in ABA accreditation standards are an opportunity to deepen and broaden U.S. legal education in ways that matter to students, employers, and broader society.

[Editor’s note:  Legal Evolution is pleased to welcome today’s guest contribution from Neil Hamilton and Louis Bilionis, who are doing the foundational work of broadening the scope of the law school curriculum — and more daunting, the law professor mindset — to include skills crucial for professional success but also for lawyers’ roles as leaders and problem-solvers who focus on the long-term greater good.

As discussed below, this movement recently won a victory with the change in the ABA accreditation standards to include professional identity formation. Professors Hamilton and Bilionis (Neil and Lou) are at work supplying the first generation of content.  For innovators and early adopters, nothing happens as fast as we want it.  Yet, Neil and Lou are doing everything in their power to ensure the wheels of progress in U.S. legal education are indeed rolling. wdh.]

Recent posts in Legal Evolution have explored the country’s political and economic instability and social strife, theories for national decline, and the special roles and responsibilities of the legal profession to address these challenges. See Posts 312, 319, 321 (exploring duties of lawyers in the present age).  This post focuses on recent accreditation changes in legal education that, we hope, will help new generations of law students internalize the profession’s special roles and responsibilities and thus more effectively address our pressing social and political challenges.
Continue Reading Fostering law student professional identity in a time of instability and strife (326)

Source: “Danny Kahneman on Decision Hygiene,” Jury Analyst, July 22, 2021

Decision hygiene is to product and service selection as testing is to software development.  Skip them at your peril.

Decisions about technology can be noisy affairs.

(Please take a moment to relive one you were part of.)

As Daniel Kahneman, Olivier Sibony, and Cass Sunstein masterfully point out in Noise (2021), noise is different than bias. It’s an independent contributor to infelicitous results in professional (and other) judgments. Noise tends to be an invisible enemy. Bias, more obvious, moves decisions in particular directions; noise just adds errors through unwanted variability. Responsible decision-makers seek to minimize both.

The Noise authors provide vivid examples of judgments in which noise plays a role, including some in law, like judicial sentencing decisions, which have been shown to turn on such things as the outside temperature or whether the local city’s football team won its most recent game. Contexts like insurance underwriting can operate like lotteries. As the authors say, “wherever there is judgment, there is noise” (p 12).  We are all noisy.
Continue Reading Keeping the noise down in tech selection (325)

Unlike sharks, killer whales hunt collaboratively.  Is this the right approach to the legal tech vertical?

Why aren’t more law firms investing in startups and/or launching corporate venture arms? Is corporate venture capital (CVC) a good fit for the legal industry? If not, is there a better model? And then, finally, what does all of this have to do with killer whales?

In this essay, I’m going to attempt to answer each of these questions. I will start by giving a brief introduction to CVC and then I will outline the current models of law firm venture investments, highlighting both strengths and shortcomings. In the second half of this essay, I’ll suggest an alternative model, a collaborative industry-wide approach which I have dubbed “Investing like Killer Whales.” This is the strategy we used when we syndicated an investment in AI-based contract benchmarking startup TermScout.  See Abramowitz, “As Promised, Our Second #Legaltech Investment Announcement This Week,” Zach of Legal Disruption, May 5, 2022 (describing collaborative syndicate approach and why worked well for TermScout).
Continue Reading Sharing my playbook for Legal Tech investment (324)

Examples of ‘Rules of Engagement’ that produce results.

[Editor’s note:  Legal Evolution is pleased to announce that Patrick McKenna has agreed to join Legal Evolution as a regular contributor.  Patrick fills a large gap in our coverage—the daunting challenges of leading and managing in a law firm.  As illustrated by Patrick’s earlier posts, see Post 305 (the perils of shared leadership) and Post 318 (most common pitfalls of law firm leadership training), there is no good substitute for experience and observation. Thus, we are very grateful that Patrick has agreed to share his 40+ years of wisdom. For an introduction to Patrick’s career and writing, see Post 304. wdh]

Whether working with a practice/industry team, an executive committee/elected board, or the members of some firm’s strategic planning working group, I continue to be struck by the dysfunctional behavior that is often present.  For example, how does one deal with the situation where all of your fellow Executive Committee members engage in a lengthy meeting to discuss a challenging, somewhat controversial situation and finally make a decision — only then to discover that following the conclusion of this meeting, a couple of your colleagues were quietly telling partners in the hallways what the group had decided to do, but that they were not in favor of that particular course of action?
Continue Reading The highest performing teams have rules (323)