This month’s meeting of the Boston Legal Business Development Roundtable was the first time we invited an outside speaker. Seven senior business development professionals from Boston’s largest firms talked with Dr. David Nersessian about his work as Executive Director of the Harvard Law School Program on the Legal Profession, and discussed recent trends as viewed from the academy and from the trenches.
We began with a discussion of associates: what, if anything, should law schools do to prepare them to develop new business? And our answer was... well, there was no simple answer.
Law firms have wildly different ideas about how associates should be involved in developing new business, or even whether they should. At one extreme, some firms see business development as the single most critical skill in any associate’s long term success. At the other extreme, some firms honestly don’t want associates to think about business development, or anything else that distracts them from generating more revenue. If an associate is billing 2400 hours, and encouraged to bill more, when exactly is she supposed to be developing new business?
For firms that do want associates developing business, law schools provide poor preparation. In fact, some at our meeting said law schools don’t prepare associates to do many of the things that matter in their careers. As one participant put it: “The irony of even a top tier legal education is how little it teaches about real world business issues, or core sales and marketing tools such as networking, asking probing questions that uncover pain, pipeline development, or building a brand--all skills that are arguably important to succeeding in a leading law firm in today's world. Add that to the increasingly challenging economic model--higher associate salaries and less willingness among many leading clients to pay for their services--and you have some serious questions about the value early associates bring at all...they're highly compensated but ill equipped to develop or serve a market that doesn't want to pay for their services.” (Note: Every Roundtable participant reviewed this draft for accuracy before I posted it. However, as in earlier blog posts about this Roundtable, I am not naming the individuals I quote, to protect confidentiality, and assure a frank and open discussion.)
“Associates have not been trained to understand their clients’ true needs,” said another, “and we lawyers see the world in narrow terms, with shadows everywhere.” Clients don’t want to spend money preparing for highly improbable risks or theoretical complications. They want someone who will take a hard headed, cost-effective approach to the most critical risks, and lawyers are not trained to think this way. If I controlled the way lawyers are trained,” said one person, “I’d teach them how to put themselves in the shoes of the people who hire them.” (I thought this comment was absolutely on the money, and it inspired me to buy a psychology text on how to train people to increase empathy. More about that in a future post.)
There was also a discussion of the lowering of trust between partners and associates. In the good old days, not that many years ago, an associate who started at a large firm had a reasonably good expectation of either staying there for life and being made an equity partner in seven years or so or moving on to a great position with a client or another firm. These days it can take ten to twelve years to make partner in many firms, and the percentage of people who actually do so is way down.
Then again, it is human nature to reminisce about the good old days. The idea that the law used to be more of a profession and less of a business “probably could be traced back, generation by generation, to English practitioners in 15th century Chancery courts." But as Miles Davis famously put it, “The world has always been about change.”
And there is no question that this is a time of change. It’s no wonder that partners pay too little attention to associates. Partners have their own problems. What once felt like lifetime tenure can now be challenged by de-equitization, layoffs, or even the dissolution of firms with hundreds of lawyers and a century of history. In a profession that is more mobile than ever, it is hard for anyone to find the time to build relationships
“The business model of many law firms is not aligned with the needs of clients,” said one participant. Law firms make money by billing more hours. A large litigation matter can create a feeding frenzy, in which firms create a money tree by throwing every available lawyer at the problem. In a global market, clients need to cut back on legal costs, and also get more predictability in fees and general counsel are under enormous pressure to manage external firms. The low trust that exists between associates and partners also exists between clients and their firms.
One way or another, law firms must find better ways to understand and meet the needs of their clients. Some data that will help will soon be released by the Harvard Program whose Corporate Purchasing Product, is the first academic study of “the ways in which S&P 500 legal departments assess, procure, and manage outside legal services.” The Program's research team is analyzing the results of “in-depth, 90+ minute interviews” with 45 general counsel in four key industries with significant legal needs (investment banking, commercial banking and savings, pharmaceutical and medical manufacturing, and petroleum), as well as detailed answers to written surveys completed by the chief legal officers of approximately 25% of the S&P 500 companies.
When the results are released a few months from now, you will be among the first to know.