Are Managing Partners Obsolete?

Author: Richard G. Stock - Lexpert, Toronto, ON. Volume 1, Issue 5, February 2000 pg. 92

The question will be answered with a resounding "Yes!", if the focus is on "managing" in the administrative sense of the word. The traditional authoritarian image of the single individual calling the shots has never been popular in the professional services environment. The disadvantages have long been apparent in the efficiencies that have been sacrificed to a more gradual, consensus-based modus operandi. Finally, it simply is not cost-effective for a partner to be involved in firm administration if that firm has more than 10 lawyers.

More than 10 years ago, MIT's Edgar Schein wrote that "leadership is intertwined with culture formation." Schein believed that building an organization's culture and shaping its evolution are the "unique and essential functions of leadership." As law firms consider mergers or alliances, as MDP permutations dot the global landscape, and as individuals move along the professional services continuum, the demand for leadership in law firms is greater than ever before. If managing partners are leaders, then they are decidedly not obsolete.

Built To Last

The splendid study J. Collins and J. Porras did on the successful habits of visionary companies is eloquently summarized in Built to Last. They carefully compared companies that have been around for at least 50 years and distilled four key findings:

• leaders must be architects and builders for the future, rather than build on short-term metrics;
• the organization must reconcile audacious goals and strategies with practical business economics;
• leaders must preserve a core ideology (culture) and stimulate progress with local autonomy; and
• the organization seeks constant alignment.

One will be surprised to find that only two (Disney with Eisner and IBM with Gerstner) of the two dozen successful companies examined have recruited CEOs from outside the company. Today's managing partners and their firms will both be obsolete if they cannot succeed in building firms to last. Many law firms approaching 30 years of existence are finding their own transitions extraordinarily difficult to complete successfully.

Knowledge Management

As an organization type, law firms have been in the "knowledge management" business from their inception. Northeastern University's Michael Zack suggests that knowledge is "what we come to believe and value on the basis of the meaningfully organized accumulation of information." As a practical matter, organizations need to manage both the content and the process of knowledge. Corporations, government and other repeat users of legal services regularly out-source professional services, in this case, legal matters to law firms. "Strategically managing knowledge, innovation and out-sourcing combine to create a company's greatest future challenge" claims Dartmouth's James Quinn. Managing partners, and practice group leaders, in law firms are not obsolete if they always deliver the right combination for their firm or their group.

The Learning Organization

Ten years ago, Peter Senge's The Fifth Discipline: The Art and Practice of the Learning Organization helped to transform the role of business leaders across the 1990's. Sustainable organizations have existed for generations, but they have been the exception. Law firms are no different. Some have thrived because they have been able to develop a solid vision and leaders, great clients and a strong culture of continuous improvement. Senge suggested that leaders in the learning organization will play three roles-designer, teacher, and steward.

The managing partner, as designer, will be concerned with introducing unconventional practice groups, with moving away from "episodic" file-specific relationships with clients, and even with re-examining ownership status and profit-sharing protocols within the firm. Provided structures follow strategies, then the design specifications are limitless.

The managing partner, must be a life-long learner personally. There are best practices for performance, productivity and innovative client relationships to be applied. These should be researched and customized from other firms and other industries for local application. More importantly, preparing the partners, associates, and other employees in a firm to readily accept change calls for teachers at all levels of the organization. In this respect, the managing partner can be regarded as the Dean of the "faculty".

The managing partner as steward plays a more subtle role. A few firms have been successful where most have not even tried. Not only are all clients firm clients, they are considered a "trust" in the custody of partners, associates and employees of the firm. Such an approach is untenable unless the members of the firm take a long-term view of the organization and of their own tenure. It is as keeper of the firm's culture and values that the managing partner's stewardship can differentiate and sustain the firm, especially when many firms have similar clients, similar economics, and similar workflows.

Is It Too Much?

Managing partners who are leaders will build for the future, will reconcile bold strategies with legal economics, will preserve the firm's culture, and will allow latitude to its members. Managing partners will not be obsolete if they can systematize how the firm continues to deliver the absolutely correct combination of knowledge management, innovation and out-sourcing with its clients and itself. Managing partners who succeed in transforming their firms into learning organizations will not be obsolete. They will be in such demand as leaders that it will be difficult to keep them in the firm and not lose them to other endeavors. Sustainability for the law firm requires that the partners agree to be led.