The Old Guard

Author: Richard Stock - Lexpert (April 2006 at p. 117)

Changing something important in a law firm is rarely a gradual process. Either a crisis will precipitate a change or a small group of individuals with enough influence will lead the change. However, the group members need to hold formal positions such as office managing partner, practice / industry group leader or be a member of a compensation committee. Even then, partners with the most influence in the firm are often those who manage the relationships with the firm’s significant clients. Regardless of their age, they are the “old guard.”

The guard is always alert to the slightest variation in the firm’s business priorities and to the requirements for legal services of significant clients. Smaller law firms will thrive with as few as 10 such clients, while larger firms may need only 25 to 50. Managing partners and group leaders must form coalitions for change with the "old guard” to execute important decisions such as opening a new office, firm merger, changing group structures, modifying the compensation system, or managing legal / business clients in a different way.

Service and Costs

It is in the interest of every law firm to be more vigilant in managing relationships with its key clients. No one is eternal and demographics are a reality. Because of this, some firms have built strong client service teams. They systematically survey their clients for overall satisfaction, for service levels, for results, and about pricing. Moreover, they are careful to minimize the incidence of partners acting as “lone gatekeepers” with premier clients. Typically, the managing partner plays a greater role in overseeing the “business-to-business” relationship with the client while the relationship partner manages service delivery. The process is well thought out and carefully executed in the very best firms.

The trade literature in legal services reports regularly on corporate law departments that quickly change preferred law firms because of service delivery issues and cost considerations. Significant corporate and institutional clients are notoriously sensitive to surprises on bills and rate increases. Law firm leadership must ensure continuity of its service delivery teams. However, it is just as important to conduct a thorough review of pricing “strategy” for preferred clients. Annual increases combined with 10 % discounts for volume will always place a client relationship at risk when service delivery is not exceptional.

Managing the Transitions

Most law firms have seen dramatic erosion of their leverage in work distribution over the last 10 years. A ratio of one fee earner to one partner is good, but it is the exception. Perhaps clients see more value (read effectiveness) in the work of partners compared to that of associates. Yet sometimes these same clients are effectively prevented from developing relationships with other members of the firm. Some of the “old guard” prefer to act as a gatekeepers to better ensure quality, cost-effectiveness and service delivery. But over time, the client contact changes, and client relationship partners themselves move on or retire. The smart law firm builds teams with multiple contacts because it is a sensible investment in continuity of service and sustainability of the firm.

But just how is this arrangement managed with the “old guard,” who typically is a very successful partner with a lot of influence with the client and in the firm? The first step is to insulate the relationship partner from economic loss for building teams and delegating work. Compensation systems and the committees running them must make allowances for such transitions. In fact, they should consider paying partners more than they would otherwise receive for such transitioning to teams.

Still, this is not enough. Nature does not like a vacuum. Professionals would rather be busy than not busy enough, and often they would rather be busy with familiar, low-risk activity. Some firms have innovated by removing more routine work from partners. Others have begun to involve managing partners in building “business-to-business” relationships with premier clients. It is a puzzle which challenges managing partners and group leaders to earn their keep.