Here’s advice for managing partners on how to balance the tension of current realities with the long-term interests of the firm.
Effectively navigating your law firm requires making good decisions, as both a leader and a manager. Here’s advice on how to balance the tension of current realities with the long-term interests of the firm in your decision making.
As a leader, you are charged with steering the firm and getting buy-in and commitment from your partners on the direction you are headed. So, just as you would establish the route for a driving holiday, you need to decide what course you will follow based on the firm’s goals. But as a manager, you also need to handle the flow of changing realities that come your way. In driving, you have to keep your eye on the dashboard for minute-by-minute inputs and be aware of bad weather and construction zones that require altering your original course. Again, it’s the same with your firm—you have to keep a close eye on the firm’s finances, keep your people aligned with the firm’s goals and interests, and navigate your way through the challenges that result from today’s realities.
Calculating the range of scenarios. Shareholders don’t like surprises—especially of the financial kind. Consequently, you need to watch the numbers closely so that you can competently discuss best- and worst-case scenarios to keep your partners informed and committed to the course. If you aren’t comfortable with managing the numbers yourself, you might consider having another member of the management committee take on the role of financial partner. Be sure, however, that you continually stay on top of the firm’s finances through regular updates and dashboard reports so you can make timely decisions in response.
In addition, virtually all of your decisions as a managing partner will affect one or more of your colleagues, in one way or another. Accordingly, you should look at each decision from three perspectives: What will the impact of this decision be on the individual (me, him or her)? What will the impact be on the group (the colleagues in place today)? What will the impact be on the firm as an entity that presumably will be around long after you retire? I, we, it: Think it through.
You must also look at the potential impact of decisions over time—as in, what will the effect be in five days, five months and five years? If, for example, you decide to lay off some of your associates, in five days the partners may be grateful for the action you’ve taken, while within the same time the press may have wind of the layoffs and you could have public relations issues. In five months, you may need some of those associates back if some of your practice groups get busy with deals resulting from government stimulus or if the economy itself turns upward, while within the same time (and on through the current year) the payouts to suspended associates will have little positive effect on the firm’s profitability. And in five years? If you mishandled the situation, there may still be negative lore about your firm at law schools, with recruiters and in the community. Five days, five months, five years: Think it through.
Keeping trust while changing course. Often leaders are criticized for giving a clear, concise message one week and changing course the next week. But in bad weather like the economic climate in 2009, changing course may be essential to survival. The key is to link the previous week’s statements to this week’s decision, explain the new inputs that are affecting the situation and clearly communicate to all stakeholders why and how the change is being made and when it will take effect.
In this way, you will retain your credibility and keep the trust of your partners. And as Stephen M. R. Covey eloquently frames it in The Speed of Trust, you earn trust through both your character and your competence. So keep your eye on the dashboard, navigate carefully, and make decisions in response to external and internal changes with a balance of character and competence—all the while remembering that what you do sets an example that will cascade through the firm.
Karen MacKay is President of the consultancy Phoenix Legal Inc., focusing her work on leadership and strategy execution for law firms. She is also a member of Law Practice’s Editorial Board.