As the former managing partner of Morgan Lewis and Bockius in Washington, D.C. and now as Practice Leader of one of the nation's leading Energy Practice Groups, Jack Newman offers an instructive insight into the importance of developing and managing in harmony with a specific business plan at the practice group level.

For some lawyers, life isn't all that complicated. They practice law, period. The formidable responsibility for managing and marketing their practices is left to a handful of other attorneys who've become managing partners and group leaders because they have a flair for it, or because there is just no one else available.

Yet managers are often limited in their perspective as well. Most have only run firms of one sort and one size: mid-size general service firms, for example. Some of them became firmwide managers without ever having run a practice group, which may be one reason they're having so much trouble getting along with their practice heads these days!

That's where Jack Newman offers a neat and instructive contrast. He's an active practitioner who also has run a successful midsize boutique, a firm he founded. Today, Newman helps to manage a substantial and well-integrated practice group that is part of a full-service global megafirm.

If a fundamental problem facing the legal profession today is how to get all the different types of managers and practitioners working in synch, it's lawyers like Newman who have worn a variety of hats and walked miles in other people's shoes that help us develop fundamental solutions.

Newman is one of the nation's leading energy lawyers, with a specialty in nuclear power. Like most of Washington's regulatory heavy hitters, Newman's agency pedigree goes back decades. He joined the Office of the General Counsel at the Atomic Energy Commission in 1959 and the staff of the Joint Congressional Committee on Atomic Energy in 1960, where he served as Staff Counsel until 1965.

After a brief stint as General Counsel of a company that later became the nuclear division of Atlantic Richfield, Newman opened his own shop with another nuclear energy practice veteran in 1967. They were two lawyers and one secretary, but not for long. With the first burst of interest in commercial nuclear power, the fledgling boutique grew to about 17 lawyers, expanding beyond atomic energy to encompass broader electric industry work as well.

In 1983, the growing firm merged with a group of electric and gas practitioners to form Newman & Holtzinger, and it became the nameplate energy boutique with, eventually, over 90 lawyers. It was the dominant industry firm throughout the 1980s and into the 1990s, but a nagging question persisted. Could even the firm that personified energy practice continue to thrive with only 100 or so lawyers at a time when electric/gas businesses were deregulating and going global?

Newman & Holtzinger thus found itself facing the question that boutiques of all sorts were (and still are) facing. Reputation was no longer enough. To offer expanding and recombining companies critical mass and fuller service, especially transactional work, the firm would have to leapfrog forward by a couple of hundred lawyers. The only way to do that was to merge with a major international firm that had a substantial enough transactional component to support a high-quality regulatory practice as the industry continued to deregulate.

They considered many offers and chose Morgan Lewis & Bockius in 1994. A number of Newman & Holtzinger partners had practiced there in the past, and the personality fit was a good one. The megafirm's D.C. office had itself arrived at critical mass (it was hardly just an outpost of the firm's home office in Philadelphia) allowing Newman and his colleagues to continue to handle high visibility matters for very large companies.

The core Newman & Holtzinger group that joined Morgan Lewis would thrive there. Its 55 lawyers are almost exclusively devoted to energy. They represent the owners of nearly 40 percent of the nuclear units in the United States and do some work for virtually every major utility in the country as well as companies in related industries.

On the face of it, then, the success of this boutique at Morgan, Lewis suggests great adaptability: It's a change that speaks directly to the art of practice management, and to maximizing client service in any kind of organizational structure.

When we interviewed Jack Newman, the first thing we wanted to ask him was, what is practice management anyway? He seems to be in a pretty good position to know.

Edge: Practice management, along with an emphasis on marketing at the practice group level, has become a byword in recent years, a kind of shibboleth. The problem is that it's easy to talk about, but harder to do. In fact, it's even hard to say what it actually means to manage a practice group in the context of a larger firm. What does it mean?

Newman: It means, in the first instance, meticulous business planning. Practice management is really born of strategic thinking. You have to take into account opportunities and constraints, both in terms of the external environment: who's out there in the business community that you can do something for and the internal environment, the sort of resources you have on hand or can get to carry out that service.

In the internal environment, practice management then becomes a process of looking for ways to improve the timeliness, cost-effectiveness, and quality of our practice. Meanwhile, the external environment has to be continuously monitored with great care to detect trends that affect the practice or present new opportunities. Client-by-client reviews must be done periodically to determine whether we are serving our clients well, whether we might be doing more for them, whether we can introduce them to our colleagues in other disciplines who might help them.

Edge: Do you draw up your own business plan?

Newman: We have a detailed written business plan that is developed and reviewed each year from top to bottom.

Edge: Is there a danger of over-planning? Could the lawyers in the group get so tied in to the plan that, even if it were a very good one, they become less likely to take their own independent creative initiatives?

Newman: I think that danger is just theoretical. We have a very entrepreneurial group. They're constantly finding themselves in situations where they're improvising and making decisions that aren't necessarily covered in the written plan. In fact, we encourage people to think outside the plan.

We'll usually change the plan, if need be, to accommodate their activities. Any danger in over-planning is minor compared to not having a formal business plan at all, and hoping that things will just naturally happen.

Edge: So the plan has to be constantly revisited. How often does your group meet?

Newman: There are annual reviews to help determine if the plan itself ought to be significantly changed or revised. But there are also reviews every 4-6 weeks to assess the group's progress in meeting the goals of the plan, and to determine if changes are necessary.

The business plan is a living document. It has to be. It encompasses virtually everything we plan to do to grow the practice in the coming year. The more alive a document is, the more you need reviews by the group to check on its vital signs.

Edge: Who attends the review meetings?

Newman: Everybody. Associates ask questions, often very challenging questions.

The senior associates are particularly helpful. Their expertise is such that it would be a tragic waste to exclude them from the planning process.

There are six associates in the nuclear energy core group and ten more in the rest of the energy practice. It's not a leveraged practice, since we've got almost 25 partners. But I agree wholeheartedly with the warnings against top-down planning that [your colleague] David Maister has given. We work to make ours bottom-up.

Edge: Give us an example of things that come up in the business plan or in the meetings that pertain directly to practice management.

Newman: We devote a great deal of time to technology and on whether or not we're availing ourselves of the best possible systems. Every other week we have a group luncheon meeting and, at one that's coming up, we're having someone come in to discuss the latest developments in litigation support.

But here's a more specific practice-oriented issue that may come up: We want to make sure that all group work products are disseminated to everyone in the group. That's not as easy as it sounds. Say a lawyer has done an outline for a client presentation. Without discipline, it might be perfectly natural for him to put it in his desk drawer. But we need to make sure others benefit from his work. Maybe it's just an outline, but seeing it might encourage another member of the group to make a similar presentation. Or, the information in the outline itself might prove valuable to other group members, especially since most of our clients are similarly situated.

In other words, these meetings underscore the point that virtually anything done in the practice group is important to everyone.

Every other Monday, we also meet to see who's doing what work. It's my impression that many practice groups have similar work assignment meetings on a monthly basis. I don't think that's enough. We double that.

Edge: A corollary problem to managing a practice group is that well-run practice groups are often hard to integrate into the rest of the firm. Consultants describe real problems in expectations and communications between practice group leadership and the firmwide executive committee leadership. What specifically do you think those problems are, and what steps have you taken to surmount them at Morgan, Lewis?

Newman: We, meaning the energy group that existed before we joined Morgan Lewis, have a very strong tradition of effective business planning and have not encountered such problems at ML B. Our business planning really works to our advantage, and the written business plan is a potent document. We are seen as an exemplar at Morgan Lewis. The firm encourages such planning.

Our written plan covers a multitude of situations and many of the firm's leaders regard it as a model document. It helps in interactions with the firm. Say we need funds for some promotional activity. When we tell firm management that that expenditure is in the plan, they can have a high degree of confidence that there's nothing random here. There's no tension between the group and firm management because such careful planning is just what management wants.

Edge: Does the compensation system reflect group performance?

Newman: Yes, in part.

Our compensation system is affected by the performance of our group, although ML B has a complex compensation system which makes it somewhat difficult to answer with certainty.

What actually happens is that we emphasize to management the group's goals and how a specific group member fits in. I'm not just making vague points about how so-and-so has been a great team player. I'll say something like, as a group, we need a more transactional focus, and so-and-so is essential to our achieving that goal for x or y or z reason. He must be compensated accordingly, or we may not achieve that goal and we may lose him as well.

I truly believe that that kind of input is a significant factor affecting compensation, and that, at least at this firm, it makes up for other quantitatively measured areas in which important group members may not have sky-high numbers.

Edge: Was that something you held out for when you joined the firm?

Newman: No. It was not negotiated.

Edge: What do you communicate about with the Morgan Lewis leadership? How much detail about practice group business do they expect?

Newman: We generally keep firm management advised of our activities. We also notify leadership of possible cross-selling opportunities.

Edge: Cross-selling seems to be a front-burner priority for you and your group. To what other groups do you cross-sell?

Newman: Cross-selling is extremely important, of course, and is integrated into our business plan. We currently cross-sell to the Antitrust, Business and Finance, Environmental, International and Labor Groups.

We circulate our business plan to anyone in the firm interested in our program. There's no sense of proprietorship or internal competitiveness over business strategies. Cross-selling works when everybody shares. In fact, parts of the firm have requested our assistance in their own practice management activities.

Edge: For example?

Newman: At a recent meeting of our senior lawyers, we presented a slide show on how we do client-by-client reviews. Then we moved on to a review of our business volume in the past year and business opportunities (including cross-selling opportunities directly relevant to the people in the audience) for the upcoming year. Then we finished with the to-do lists of specific attorneys, individual marketing plans detailing specific actions, like who'll be making calls to particular clients and why. And all this was presented in language drawn directly from our business plan.

Edge: You not only came from a smaller firm, but it was your own firm as well. How did that present additional problems in running a practice group, and integrating your own leadership into the Morgan Lewis fold?

Newman: Of course it was an adjustment, to find all these rules and procedures that you never had before. But we were all smart enough to know you couldn't run a 950-lawyer firm without them.

Again, too, that business plan acted as a buffer, as did the fact that the Newman & Holtzinger contingent is perceived as being efficient business planners. What we were, culturally, and the way we operate as a small business unit, was appreciated by Morgan Lewis. We'd been doing what we do for 15 years, and so it's a very highly developed system.

The other thing, though, about our business plan is that it's also consistent with firm objectives. It begins with a Morgan Lewis mission statement, not just a Morgan Lewis energy practice group statement. At the same time, our group was itself so well integrated internally that we had very little difficulty integrating our practice and leadership into ML&B.

Edge: Law firms are often very individualistic cultures with power based on books of business. How do you encourage aggressive business getting without fostering the kind of egoism that can disrupt the group?

Newman: Simple. We plan as a group to target and implement specific strategies for reaching particular clients.

Edge: Aren't we then dealing with something that's more art than science? Either the dominant lawyer in a group has the will and the generosity to institutionalize the business or he or she doesn't.

Newman: There is science in it, you can create a situation that encourages institutionalization. Newman & Holtzinger was totally institutionalized, and we carried that over to ML&B. So it was a good fit.

Edge: Does your particular industry and practice require certain kinds of practice management or marketing that might not apply to other areas, even other regulatory areas?

Newman: The clients are bigger. The matters tend to be of longer duration, and we deal with management at the highest level. From a practice management standpoint, it's a garden that needs to be tended very assiduously.

From a practice development standpoint, there isn't a large pool of potential clients. We've got several dozen clients. Morgan Lewis has more than 10,000. So we need to nurse our client relationships with a lot of care. Everybody we deal with really counts, and maybe that's one reason we had to be a step ahead in terms of business planning.

Edge: How do you distinguish yourself from your competitors?

Newman: We do our best to offer services on a very personal basis, while establishing long and enduring ties that survive the particular engagement for which we might be retained, by offering 24-hour on-call service, and at the same time effectively managing costs.

Edge: I can't imagine good lawyers at other firms don't do that as well.

Newman: You're absolutely right. We find client surveys to be extremely useful in this regard, in a way that's not always appreciated. On the one hand, these how-are-we-doing interviews are useful for simply accomplishing what they're meant to accomplish. They show us our strengths and weaknesses over a given period of time. At one point, for example, we found that we were rated very strong as strategic thinkers, helping clients with their business plans. But we didn't rate as strongly as we would have liked for our knowledge of technical issues relevant to clients. So we remedied that.

But we also have a very good sense of where our competitors are also strong or weak. So the client surveys help us benchmark, and that in turn allows us to differentiate ourselves from the competition.

Edge: What does your practice group's marketing plan encompass?

Newman: It encompasses client-specific actions, multi-client practice development, promotional activities, internal betterment programs, and a review of the internal and external environments affecting our practice.

Edge: What sort of promotional activities do you feel comfortable with?

Newman: We favor meetings or seminars or conferences where we can come face-to-face with the in-house decision-makers in our industry. The Edison Electric Institute, the Nuclear Energy Institute, and the energy section of the ABA all have events where the value of our time is maximized because of the contact with people who actually hire lawyers. That's the heart of it.

We are much more discerning when it comes to speeches and articles. We seldom find those engagements lead to new business. The lawyers in our group rarely give more than a total of ten speeches a year. And the cost benefits of writing articles are very dubious. Publishing requires a lot of lawyer hours, and that's very expensive, but I don't see it generating new business very often.

I'm still wavering on advertising because I'm not sure if there's a payback of any sort. We may place some ads in the near future, but we don't just want to advertise the energy group. I'm thinking of a series of six or so ads, each one of which will feature the cross-sell between other ML&B groups and us.

Edge: How do you get people to follow through on their personal commitments to a marketing plan?

Newman: Pure peer pressure. And, to be honest with you, a lot of what the lawyers promise they'll do gets done two days before the monthly or six-week meetings in which we review the business plan.

Edge: Morgan Lewis has a fairly large marketing department. How do you and your group avail yourself of that?

Newman: We do not use the marketing services of ML&B very extensively.

Edge: Why not?

Newman: Because they don't know how to sell as well as we do to our industry. A centralized marketing department can't possibly learn what it needs to learn about all the industries served by Morgan Lewis to a sufficient degree to effectively help us prepare client proposals and write business plans.

The individual offices of the firm have therefore been hiring separate marketing directors.

Edge: Do outside consultants offer anything to groups like yours that are already well ahead of the curve?

Newman: As a check on yourself, yes. I find the PracticeCoach(R) program extremely valuable in that regard. I mentioned before Maister's emphasis on bottom-up planning. When I hear him speak about that, and I'm able to say, yes, that's the way we do it, it's comforting.

Edge: A general question for you: From our standpoint, and from Maister's, when we look at practice groups like yours, aren't we really seeing a sea change in the profession over the last few years? Aren't we really rewriting the old saw, Clients don't hire law firms, they hire lawyers, so that it now goes, Clients don't hire law firms, they hire practice groups.

Newman: I wouldn't go quite that far, but practice groups are becoming more important if not quite replacing the individual lawyer in the practice management and marketing areas.

It's significant that I have two business cards. One is mine. The other is the group's. There are twenty lawyers on that group card, and it fits into the client's pocket just as easily as mine. On that card, the client can find the right lawyer for the right question. Subliminally, the very existence of the card sends a message about the importance of the group as a group.

Edge: One factor affecting group cohesion is lateral hiring. That can threaten the sort of well-oiled group of like-minded partners that you seem to have.

Newman: We have not done a great deal of lateral hiring in the past two years. We concentrate on developing our associates, which is a part of our business plan. When we do look at laterals, we concentrate on knowledge of the industry and, of course, a book of business.

Edge: We're often amazed at the lack of formal training for young lawyers after they join their firms. What sort of mentoring or other training do your associates get in your group? Is that typical firmwide?

Newman: Associate training is vital to us. We have a well-defined curriculum, both tutored and self-taught, and that too is part of our business plan. Associates are involved in some of our business planning activities and I'd say that these training initiatives are also followed in varying degrees in other parts of the firm.

Edge: Here's a good question for this time of the year: How do you measure the success of the group? Do you have numbers to hit?

Newman: Success is measured in terms of how well we met the targets of our business plan; mostly in terms of success in marketing and, secondarily, quantitative results.

Edge: What is a success in marketing' that isn't also a quantitative target?

Newman: Clearly, numbers matter, but, to give you an example, our business plan calls for adding a new utility company to the client roster every year. There's no number attached. It doesn't have to be a pot of gold but, from a practice development standpoint, it's important that we broaden the client base.

Again, that speaks directly to the nature of our market. There aren't a lot of clients in our field, and you can't rely on having anyone forever. So it's vitally important to broaden the base.

Edge: Does your group have a life of its own? What would happen if the present practice manager were not around tomorrow?

Newman: Succession planning is built into our business plan, both generally and specifically for each client.

Edge: Any final thoughts?

Newman: I'd emphasize a point David Maister makes. Much of what we're talking about is planned use of unbilled time. It takes a pot full of hard work to manage and develop a practice. But it's the real work, as David says. It's the effort that produces long-term health and not merely near-term hygiene.