Tag Archives: authority

The Death of Deference

Lawyers have always been a distrustful bunch, but in the last twenty years the growth of larger law firms on the back of increased accountability and performance management seems to have repressed independence of thought amongst professionals, who have been encouraged to focus much of their effort on fee generation and to leave leadership decisions to the leadership team.

Things are, however, changing. Getting the important decisions made is becoming more arduous, and when the firm leaders think they have pushed a decision through in a professional-service firm, they are increasingly finding that decision being thwarted or ignored by the partners afterwards.

In an environment where speed and flexibility are critical, there are of course an increasing number of decisions that can no longer be channelled laboriously through partners’ meetings. Clearly every-day and week-to-week decisions, such as staffing levels, pricing and infrastructure resources, have to be made swiftly and efficiently. And it is universally accepted that all firms need strong and robust leadership, with a minimum level of consultation and discussion and a maximum level of drive and authority. But in some areas, particularly those requiring long-term change, leaders are also acutely aware of the need to gain wide-spread agreement to their strategies and plans – the need for ‘buy-in,’ to use that overworked phrase.

I am also perceiving somewhat of a sea-change within our western cultures generally – less deference to authority, less respect for tradition, less blind acceptance of leadership. As an example, in my country – the United Kingdom – parliamentarians are flexing their muscles and refusing to vote just on party lines, and many institutions are seeing a rise in ‘people power.’ In the arena of professional services, we have witnessed a huge rise in independent lawyers working as freelancers in virtual and dispersed firms in order to regain their autonomy. In traditional firms, we see an even greater level of scrutiny by partners of the leadership team’s performance, and less tolerance of bullying tactics, amateur superficiality or badly-thought-through proposals

The brutal truth is that there are some decisions where achieving a favourable partnership vote is becoming more and more tricky, and usually not enough on its own to ensure implementation – especially in situations where partners feel the leadership team appears to be trying to enforce blind compliance with the decisions they are promoting. Take decisions that need partners to change behaviours, for example. Partners are unlikely to make large alterations in working practices or in how they do things unless they have been part of the decision-making process.

The trick, for any leader, is to be able to judge between three types of decision. First, there are the sorts of decisions which can successfully be made by the management team without consultation. Second are the proposals which need some level of consultation, but which can be pushed through or negotiated with minimum discussion. Third come the more difficult areas of long-term change which need wide-spread support and ‘buy-in’ to stand a chance of success.

Those in the third category present occasions when the leadership team needs to work hard on ensuring participation and involvement of the partners in the decision-making process. Simply telling the partners what to do is not enough.

Recognising this, many firms have developed a communications approach that at least has the partners feeling that they have been consulted, or that attempts have been made to achieve some level of consensus. But in essence, the scenario often merely changes from a ‘telling’ style to a ‘selling’ one, with the management team employing every trick in the book to railroad and cajole partnership agreement through persuasion and negotiation. It is perhaps no surprise that many partners feel at best guarded and distrustful about the whole process. The sorts of complaints I hear from partners are along these lines:

  • “I feel disenfranchised. I don’t know what’s going on.”
  • “What’s the point in saying anything? The management team never listens.”
  • “It makes no difference to me what’s decided. I’ll probably just ignore it all anyway.”
  • “The managing partner has lobbied to ensure he has enough support – so opposition is pointless.”
  • “I figured everyone else was in favour, so I kept my mouth shut.”
  • “I just wanted to keep my head down.”
  • “Frankly, I didn’t have time to read the papers. I had no idea what we were agreeing went so far.”

Accordingly, to achieve success the modern professional firm needs a greater degree of flexibility, professionalism and inter-dependence with the firm’s partners. I believe a better approach for tricky and important decisions is to try to facilitate some genuine views and feedback so that the partners actually do become involved in the decision-making process and are not merely negotiated into acceptance of pre-ordained solutions. But even where attempts are made to achieve this, success is not easily won. What typically occurs is that the leadership team arranges a partners’ retreat or conference, or a departmental away-day, at which the team will attempt to lead an open discussion and ultimately to feel their way to an agreement. Plans and papers are produced, analysed and discussed, break-out groups established, and action points developed. Sometimes, the partnership will end up agreeing with the management team’s checklist and plans. At other times, little seems to be achieved except a lot of hot air.

But however open and genuine the intent, the consultation process will almost invariably suffer from a fatal flaw if internally led or facilitated. The problem is that it is almost impossible to facilitate a genuinely open discussion if you have already made up your mind that your carefully thought out plans and proposals are the right or only way forward.  Even if the proposals are accepted, a feeling of resentment can often be evident if the partnership feels it has been manipulated in some way, or that the result of the discussion is a foregone conclusion.  What is worse is that superficial external agreement by the partners can in fact mean deep-rooted internal rejection. In other words, it can be dangerous to take silence as consent. In some cases, I have even seen genuinely well-thought-out and sensible proposals voted down by the partners just to show the management team that it cannot always have its own way.

I am not for a moment trying to suggest that the management team should abrogate its leadership and management role in favour of some limp and long-winded form of group decision-making process. But what I am putting forward is that it is often good to get some level of feedback and constructive suggestions from a consultation process before a decision is ultimately made – particularly where long-term change is involved. A genuine facilitation process can achieve powerful results here, so long as the leadership team can avoid being seen as thumping its own particular drum and is prepared to listen and influence rather than control and direct. And it generally can only achieve all that if the process is facilitated by someone other than the leadership team itself. Whilst it is, of course, sometimes possible for these purposes to find an internal facilitator, with the necessary facilitation skills and experience and with no axe to grind, I am finding that it is also an area where the use of an external consultant can add enormous value.

Edge Principal Nick Jarrett-Kerr is one of the leading UK and international advisers to law firms on business issues, strategy, leadership and management. In addition to matters of strategy, Nick has a particular interest in law firm governance, partner compensation, partnership performance criteria and partner development. He regularly leads or facilitates strategy days, retreats, partner conferences, practice group retreats and away days.

When the Monkeys Run the Zoo

In running any business, reaching wise and sensible decisions is never easy. And in competitive markets, many who are charged with managing professional-service firms can suffer sleepless nights attempting to get decision-making right. But trying to get the right outcome can become a ‘worst nightmare’ in firms without a clear governance structure or with a mismatch between authority and responsibility.

Many professional service firms remain acutely political organizations, with much of the firm’s decision-making having to run the gamut of opinion-seeking, back-scratching and adroit manoeuvring before the management team can make significant progress. In an increasingly competitive market, the extreme consensus model (in which every major decision gets delayed until the achievement of positive ratification) is rapidly becoming not only a luxury but a risky way of running a business.

I heard about a law firm recently where a sensible redundancy program got delayed by several months because of the need to get the reluctant partnership in line. In another case, the managing partner told me that the partners just did not seem aware (or had forgotten) that the governance structure of his firm in fact granted the managing partner and the management committee some fairly explicit powers and authorities to get on and manage the firm, and were resisting all his attempts to implement decisions by demanding endless discussion on every issue – the way things have always been done. This is a firm where the unwritten rules of the organization would seem to be trumping the well-documented governance arrangements.

In contrast, I can think of several other firms where the managing partners and the management boards or committees are attempting to manage the firm by force of personality and the goodwill of the partnership, but without any explicit rules, provisions or authorities. I remember attending the management committee of one such firm a few years back. There was no management committee constitution in place and in general it seemed a fairly indecisive talking shop. With my help, some good decisions were reached at the meeting I attended, only to be overturned the very next day by the partners when they didn’t like the decisions that had been reached. In all these cases, problems arise because the monkeys rather than the zoo-keepers seem to be running the zoo.

Please don’t think from what I have said that I am all in favour of a command-and-control style of management, or that I would extol leadership by fear! Indeed, I am a fervent promoter of appropriate and timely consultation between those charged with managing the firm and their partners or members. But it seems to me that law firms tend to suffer more from indecisive management than from over-decisive management.

A balance is needed, and in achieving the right checks and balances between the two extremes of management anarchy and despotic rule, I suggest three checks.

  1. The first check is to ensure that the firm’s constitutional documents reflect the actuality. It has often been said that every firm has two organisational structures – the formal one codified in the constitution and the unwritten version in practice. The governance framework of many firms often starts with some initial provisions in the partnership deed or members’ agreement, and then develops through working practices, resolutions and protocols agreed or simply emerging over the years. Sometimes, the provisions in force vary greatly from actual working practices, and at times the written provisions contradict each other. Regular updating and consolidation reduces muddle and helps to identify gaps and outmoded provisions.
  2. Reviewing and updating the framework is, however, only a start. The second check is to diagnose if the governance framework is ‘fit for purpose’, both to ensure an effective and efficient operation and to enable the management team to lead the firm through the difficult decisions which may be necessary both during a recession and after it. Does the governance framework operate well in promoting performance, building value and protecting against risk? Does it allow an appropriate amount of decision-making authority? Does it give the management team the power to make merger approaches, for instance? More contentiously, is the management team empowered to make partner redundancies as well as staff redundancies and, if not, should it be able to achieve this? Firms should also make some attempt to ensure that their management structures accord with best-practice principles. If an insurer, bank or external investor were to look at the firm, would the governance framework look sensible and well-ordered – would an external party be able to form a view from the constitution whether or not the firm has a chance of being sensibly run? As part of this check, it is wise to examine how the firm’s governance compares with ‘best-practice’ models or with peers.
  3. The third check is to make sure that everyone in the firm understands and accepts the various management roles and responsibilities. All partners need to know where they stand, what is expected of them, and what they might expect from the management structure. It is difficult to hold partners and managers to account at the best of times, and well-nigh impossible if the rules of engagement are vague or wishy-washy.

Reliance on the goodwill and compliant nature of partners is not enough to guarantee a high-performing firm. Firms with no enforceable rules or discipline and no system of accountability will not fare well in difficult times.

To paraphrase Eric Fromm[i], true freedom is not the absence of structure but rather a clear structure which enables partners to work within established parameters in an autonomous and creative way.

The monkeys need to understand who is running the zoo and what the zoo rules are.

 

[i] Escape from Freedom Rinehart 1941

Matching Authority and Responsibility

2-iStock_000021235588_SmallMany law firms remain acutely political organizations with much of the firm’s decision-making having to run the gamut of opinion-seeking, back-scratching and adroit manoeuvring before the management team can make significant progress. It has long been recognised that the extreme consensus model (whereby every major decision gets delayed until the achievement of positive ratification) is a highly inefficient way of running a business. There are many stories of how sensible and timely decisions have been delayed by several months because of the need to get the reluctant partnership in line. In some cases I have observed that the firm’s partners had forgotten that the governance structure of the firm in fact granted some fairly explicit powers and authorities for the leadership team to manage the firm and were resisting all attempts to implement decisions by demanding endless discussion on every issue – the way things have always been done. There are clearly still firms where the unwritten rules of the organization seem to be trumping the well documented governance arrangements – firms where the monkeys appear to be running the zoo.

In contrast, I can think of several other firms where the managing partners and the management boards or committees have tried to manage the firm by force of personality and the goodwill of the partnership, but without any explicit rules, provisions or authorities.

A balance is needed, and in achieving the right checks and balances between the two extremes of management anarchy and despotic rule, I suggest three checks.

  1. The first check is to ensure that the firm’s constitutional documents reflect the actuality. It has often been said that every firm has two organisational structures – the formal codified one and the unwritten version in practice. The governance framework of many firms often starts with some initial provisions in the partnership deed or members agreement, and then develops through working practices, resolutions and protocols agreed or simply emerging over the years. Sometimes, the provisions in force vary greatly from actual working practices, and at times the written provisions contradict each other. Regular updating and consolidation reduces muddle and helps to identify gaps and outmoded provisions.
  2. The second check is to diagnose if the governance framework is ‘fit for purpose,’ both to ensure effective and efficient operations and to enable the management team to lead the firm through the difficult decisions which may be necessary during both good and bad times. Does the governance framework operate well in promoting performance, building value and protecting against risk? Does it allow an appropriate amount of decision-making authority? Does it give the management team the power to make merger approaches, for instance? More contentiously, is the management team empowered to make partner redundancies as well as staff redundancies and, if not, should it be able to achieve this? Firms should also make some attempt to ensure that their management structures accord with best practice principles. As part of this check, it is sensible to examine how the firm’s governance compares with ‘best practice’ models or with peers.
  3. The third check is to make sure that everyone in the firm understands and accepts the various management roles and responsibilities. All partners need to know where they stand, what is expected of them, and what they might expect from the management structure. It is difficult to hold partners and managers to account at the best of times and well nigh impossible if the rules of engagement are vague or wishy-washy.

Reliance on the goodwill and compliant nature of partners is not enough to guarantee a high performing firm. Firms with no enforceable rules or discipline and no system of accountability will not fare well in difficult times. To paraphrase Eric Fromm (Escape from Freedom Rinehart 1941), true freedom is not the absence of structure but rather a clear structure which enables partners to work within established parameters in an autonomous and creative way. Conversely, decision-making can become a worse nightmare if there is no clear governance structure, or where there is a mismatch between authority and responsibility.