March/April 2019

Taking the Lead

Sacrificing for the Greater Good

Linda Klein and John Hinton IV

Recently a cup of coffee with a new acquaintance led to a conversation that provided an inspiring reminder of the importance of dedicated leadership.

The acquaintance recounted her story of eating lunch with the CEO of a nationally known professional services firm. As someone working in the same industry, she was a little star-struck by the entire meeting, but it was the CEO’s explanation of the primary reason for the firm’s current success that most inspired her.

Giving Something Up Rather Than Giving In

The CEO’s firm is in an industry where the current demand for services exceeds the pool of talented professionals to perform them. Not only is acquiring new talent difficult, but retaining existing talent is tough because the talent shortage has created a bidding war for these professionals. Although this challenge is creating problems for the industry as a whole, this CEO’s firm had an able team in place to take advantage of this boom, has retained its team despite the bidding war and has been successful at adding talented new professionals to its group.

Why is this firm able to retain its talented employees and gain new ones in this environment? More important than its current business practices are decisions that the firm leadership made during the lean times.

As recounted by my acquaintance, the CEO said that during the last recession his firm took a different approach to adjusting to lean financial times. It made cuts at the top of the organization rather than at the bottom, as is customary. The CEO and the firm’s other senior members accepted significant pay cuts during these lean years. Yes, this meant personal sacrifice, but it also meant that the organization was able to keep its team intact through the recession. When the economy turned positive, as it always does, this firm was poised to succeed—the organization was full of employees who were both talented and loyal. The personnel appreciated the sacrifices that were made to minimize their burdens during the lean times. The senior members proved they were leaders by taking a disproportionate share of the burdens instead of putting it on those least able to carry them.

Although we don’t know the stories of the impact to the firm’s individual employees, they are not difficult to imagine. Perhaps the recession caused the receptionist’s husband to lose his job of 20 years. The receptionist then became the sole breadwinner overnight. She had children about to go to college. Would she be worried about losing her job as well? Not at this firm.

These decisions by this leadership group, which were both sacrificial and shrewd, were the things that most impressed our new acquaintance, as it clearly resonated with those employees.

The Benefit of Making Personal Sacrifices

What observations can be learned from this firm’s decisions?

First, it’s a reminder of the principle that we reap what we sow. However, as one preacher put it, “You reap what you sow, more than you sow and later than you sow.” This business was loyal to its employees when they needed that loyalty most. Its employees, in turn, were loyal to the firm. However, not only has the return on the firm’s leaders’ sacrifices exceeded those sacrifices, but the true benefits were not immediately brought to fruition.

Are you as a leader in your firm making the sacrifices today that will benefit the entire firm in the future? Are you calling on all of those who are leaders in the firm to make similar sacrifices?

Second, the employees knew about the sacrifices of the CEO and the other firm leaders. They probably didn’t know the full extent of the sacrifices, but they saw their leaders putting the employees’ interest ahead of their own. This is a tricky task. We recommend saying nothing about your sacrifices. Word will get out. Leaders who brag about their sacrifices are seen as insincere. This greatly reduces the benefit. Grandma used to say, “Self-praise is no recommendation.” However, your sacrifices need to be visible to others in the organization to give them reassurance that those at the top care about those who are not. It sets an example that others can follow. Be visible by conspicuously cutting back on your perks. Your leadership team may need a weekend retreat to force the team to disconnect from work and to focus on planning for the future. But does it need to include a first-class plane ticket to a fancy resort?

Third, the type of financial sacrifice that was on display raises the question of margin. Law firm leaders must leave some margin in their life to make sacrifices for the benefit of the firm, whether those sacrifices are financial, time or otherwise. For example, if firm leaders lock themselves through their personal financial decisions into certain lifestyles during the good times without leaving any margin, when the inevitable downturns occur, they are not in a position to readily make the financial sacrifice. Worse yet, when firm leaders do not leave themselves sufficient margin, their decisions can be driven, even unintentionally, by what is best for the personal lives of the decision makers rather than what is best for the organization as a whole.

Summing Up

So ask yourself the following questions:

  • What do you need to sacrifice today for the long-term benefit of your firm?
  • Are you allowing for a healthy amount of visibility of the sacrifices your firm’s leaders are making for the benefit of the others in the firm?
  • Are you and your other leaders positioned with sufficient margin in your time, responsibility and finances to make sacrifices when they are needed?

Identify areas of change today to better position your firm and yourselves for the good times and the better times.

Linda Klein

Linda Klein is a past president of the ABA and senior managing shareholder at Baker Donelson. She is a frequent speaker on law practice, construction and higher education law.

John Hinton IV

John Hinton IV is a shareholder in Baker Donelson’s Atlanta office. His practice focuses on commercial litigation and construction law.