Strategic Lapse

Richard G. Stock*

This article was previously published in Lexpert, January 2005.

Turning a new leaf, New Year’s resolutions, and even lightning bolts are not always enough to prompt the members of corporate law departments to do what is most important, as opposed to most urgent. The problem is not particular to law departments. Companies and management consultants have spent a good deal of time trying to disguise, remedy and prevent the gap between strategy and execution.

Management literature now contains sufficient insight and case studies to actually be useful. What were once thought of as back-office departments – legal, human resources, finance and IT - can today be found “at the coalface”. These departments enable companies to develop and sustain the competitive edge in the market. In other words, if they are any good they are inevitably “strategic”. It has become possible across a whole range of industries for the General Counsel and the legal team to have a strategic business plan, or at least to be part of the company’s strategic business plan.

This said, why do companies and their law departments fail to do what they say they are going to do? David Norton and Randall Russell of the Balanced Scorecard Collaborative have identified five factors that inhibit execution of strategy. It is true that explaining a problem does not excuse it. But an awareness by legal management of the pitfalls surrounding implementation and positioning does improve the odds of success. Our consulting experience over the last eight years of working with law departments allows us to interpret the applicability of these factors to the law department.

Executive Leadership Not Mobilized

On occasion, the legal leadership team is not sufficiently engaged to drive execution. A General Counsel takes on the position, commissions a review, and develops a “strategy”. Buy-in from reporting staff is generally not automatic. But even when it is secured, AGC’s or group leaders are unable or unwilling to persuade their own team members and principal users of the need for change. The General Counsel cannot launch the strategy alone. A new “strategic” way of managing is not understood or is not accepted across the board. Legal leadership must share its vision and be able to inspire the entire group to follow in a timely fashion. This is where teamwork begins; implementation doesn’t take place without it.

Strategy Not Translated into Operational Terms

Many companies and their law departments are able to set financial objectives. Metrics such as legal spending or cases / matters resolved are fairly straightforward. But targets to achieve non-economic goals are much rarer. If effectiveness is now one of the most strategic goals a law department can achieve, then developmental objectives to integrate lawyers with business units, risk management focusing the company on the trade-offs between legal and business imperatives, and development of the intellectual capital move to the head of the line. To this, one must add the need to measure service with quantifiable indicators. Again, it is the specifics and operational terms that help answer the all-important question “What difference did the lawyers make?”

Poor Alignment

Medium to larger law departments struggle with how best to align and deploy legal services. Either the lawyers work alone and not in teams with other members of the department, or they are so closely aligned with a business unit or a geographical region that little flexibility exists to re-deploy experienced resources in the department. In other settings, the department is populated with talented generalists who must be all things to all people. As these lawyers enter their third decade of practice, it becomes increasingly difficult to specialize or to keep up with changing corporate direction.

Few View Strategy As Their Job

Compensation for corporate counsel is not designed to reward strategic success. Depending on whether counsel is classified as management, compensation and (bonus) generally depend on corporate services and somewhat on individual merit. It is the exception to find bonuses tied to the achievement of law department objectives. Programs to help lawyers acquire competencies (knowledge / skills) of strategic value to the company are unstructured. Yet leadership and project management skills are scarce in many companies. Legal competencies are simply not enough to succeed as corporate counsel.

Insufficient Communication and Direction

Law department meetings are irregular. When they are held, a review of progress on strategic objectives is rarely at the top of the list. Budget cycles and variances are discussed. But planning and strategy are at best sporadic.

Matters that are urgent deserve the attention of corporate counsel. But they must also be important in relation to the strategic objectives general counsel has set. Otherwise, the department is again failing to do what it said it was going to do.

* Richard G. Stock, M.A., FCIS, C.Adm., CMC is a partner with Catalyst Consulting. The firm has been designated the Preferred Supplier for Legal Services Consulting by the Canadian Corporate Counsel Association. Richard can be contacted at (416) 367-4447 or through the website at http://www.catalystlegal.com.

Do I Think and Act Like a Lawyer or a Normal Person? Can They Be One and the Same?

John Starzynski

Thinking and Acting Like a Lawyer

When we go to law school as highly-intelligent human beings, we are turned out as lawyers. The professional training changes us into skilled legal analysts and practitioners. We learn ways of thinking and acting unique to the profession. There are some personality traits that help in this formation and performance. These factors can also be contributors to the stress we feel personally and professionally. See if you recognize yourself and your behaviours.

Perfectionism. We spend great amounts of time in paperwork – reviewing agreements, dictating affidavits, preparing facta, making file notes and docketing time. It seems impossible to delegate these tasks, but we can get to the stage of believing that nothing, even more general tasks, can be assigned to others and that we have to do it all ourselves. We feel that only we can make sure that everything is done just right. It is an understatement to say that the stress of perfectionism adds to our daily pressures.
Conscientiousness. Many of us have things that must be done according to our personal logic to make our lives work; things such as returning all telephone calls and emails from that day before going home, cleaning all files off our desks every night, or following up on three outstanding accounts every day. We may do this even if it means missing dinner with our family or skipping family events. When this happens, we can feel guilty and overwhelmed. And stressed.
Needing control. We often believe that we can control when other people do things, what they do and how they do it. The reality is that others work on their own schedule, at their own pace and with their own personal priorities. Not recognizing this can add stress to an already busy practice.
Delaying gratification. In law school, we learned quickly that there were not enough hours in the day to read all that was assigned, attend classes, study, write essays, eat, sleep and have leisure time. So, we cut out some of the “unnecessary” stuff like leisure time, eating and sleeping. We learned to “manage,” but most of us had (and have) sleep deprivation and lived (and may still live) on a diet of fast food, chocolate bars, soft drinks and coffee. Leisure time may be that smoke break whenever the stress gets to be too much. The deprivation sometimes goes deeper in that we defer relationships to when we “get around to it”. Even if we enter into a relationship, we may take our partner for granted believing that he or she will understand the late nights, weekend marathon sessions and missed social events. We may not spend any money for fear of not having any after our poor days in law school or the infancy of practice. This can lead to resentment of others around us and stress. In some cases, it can lead to rebound behavior in overspending, social relationships without boundaries or neglect of daily obligations. The result either way is stress.
Need for approval. Whether we want to admit it or not, all of us need approval. In our case, we need our clients to appreciate the hard work that went into their file and our partners to know that we are pulling our weight. However, we are not always comfortable with praise and approval and we may dismiss or negate it when it is given. If a client complains or does not pay our account, we can get defensive, angry and even aggressive. If a partner asks for an explanation of something, we come armed with information and statistics to justify ourselves. Innocent questions or differences of opinion can become major league stressors.
Self-doubt. Some lawyers feel like imposters. We may feel that we have fooled others into believing that we know what we are doing. We worry about getting found out about how little we really know. So we try harder, achieve more, and do more in the belief that no matter what we accomplish, it will not be enough. Imagine the pressure we can put on ourselves.

Thinking and Acting Like a Normal Person

The personality and behavioural characteristics set out above may have helped to get us to the role of lawyer that we enjoy today. It may seem like they are depicted as totally negative traits, but knowing how to temper the extremes will lead to less stress and more balance in our lives personally and professionally. Here is the ying to the yang.

The Courage to be Imperfect. Being perfect all the time is such a tall order that no one can fulfill that lofty goal. Acknowledging that you can only do your best, albeit with a high standard of best, allows for those times when all things do not go perfectly (sorry for the pun) for you. Learn to laugh at life’s incongruities. Learn to laugh at yourself. Things - some good, some bad - just happen sometimes.
Learning to Have Boundaries. It may be more reasonable to make as many quality phone calls as you can before your normal day-ending time of 6:00 p.m. or 7:00 p.m. (many of you are probably laughing at the thought of leaving work so early!) Or tidying up your files on your desk rather than putting them all away so you will know where they are in the morning. Or following up on one account rather than three if your day has been too full. It does not all have to be done today. Prioritize those things that, in life and death, must be done first. The rest is optional and a bonus.
Knowing Your Limits of Control. One approach to control is to ask whoever you are delegating something to how they will do an assigned task, negotiate when it is to be done and set up a system for a progress report. This might alleviate the stress of worrying that your work will not get done properly without you over-controlling or micro-managing. Making it manageable, though, means giving up some of the belief that you can control all of it all the time. Knowing how and when to delegate is a skill we need to learn for our own stress levels.
Feeling Fulfilled. When we delay gratification, we set up resentments for the things we have lost. Setting reasonable boundaries to include work, family, nutrition, exercise and leisure pursuits make all these activities enjoyable and complete in themselves. The trick is to set priorities for what matters most and do not make one activity override the others. This requires tinkering, patience and constant re-evaluation.
Self-Approval. Whenever we rely on others for our self-esteem, we will have many disappointments in life. Recognizing our own strengths and weaknesses will give us a realistic sense of who we are, what we believe and what we stand for that makes other people’s opinions just that – opinions and not judgments.
Self Trust. It took a lot of study, self-sacrifice and intelligence to become a lawyer. There is no book “Lawyering for Dummies” because no one can be taught what we know and how to do it in a little bit of time in a few pages. Turning self-doubt into self-trust is a matter of perspective, realizing that we are our own toughest judges and that, in the grand scheme, we are capable and competent professionals and persons.

What Does It All Mean?

There are always two sides to an issue - on the one hand and on the other. As lawyers, we do this analysis every day in situations that cross our desks and in our personal lives. Every trait listed above that helped make you a lawyer contains good things. Without that perfectionism, control and conscientiousness, you would not have been successful. However, too much of those attributes can turn them into liabilities. Balance is the key to being healthy and happy. It is possible to be a lawyer and a “normal person” with awareness, self-love and boundaries. Ask someone you trust to help you with your personal inventory and journey.

To talk to a peer support lawyer and have a friendly, understanding ear, call the Ontario Bar Assistance Program (OBAP). OBAP provides assistance to lawyers, judges and law students who are dealing with issues of stress, burnout, addictions and mental wellness challenges. To contact the Program Manager, Leota Embleton, call 1-877-576-6227. To contact the Volunteer Executive Director, call John Starzynski at 1-877-584-6227. Or, visit the website at www.obap.ca.

Thanks to Dr. Mamta Gautam, President of the Ontario Psychiatric Association, for her inspiration for this article. Reprinted with author’s permission.

Legal Services in Mature Markets

Richard G. Stock*

This article was previously published in Lexpert, May 2005.

The amount of legal services available to law firms in a given market is “elastic”. Try telling that to a senior associate or to a partner under pressure to build a practice or to top off a practice that has been at 75 % capacity for 3 years. The symptoms are easily recognizable often for lawyers with commercial practices targeting medium-sized and smaller business. Over time, many such businesses have closed down or been sold off. Sometimes, the owners have changed law firms looking to find specialists not available at the initial firm. It seems that “loyalty” goes only so far.

Moreover, the corporate and institutional sectors as well as government at all levels have launched programs to reduce the number of firms that they use. Strategic procurement initiatives can be found everywhere and they have reached legal services within the organization. Only the strongest personal and professional relationships between the client and the firm survive the pressure to reduce the number of firms, to reduce and stabilize pricing, and to realign legal service teams so that they are properly leveraged.

The challenge to law firms in mature markets is spreading to every area of practice. But there are measures that every experienced professional should insist upon.

Know Your Client Business

Not enough lawyers take the time to learn what the business plans are for their clients. Outside of the particular matter or case, they lack the bigger picture. Competitive markets for a client’s products and services, regulatory issues, and turnover of the executive team will force a review of legal service usage patterns. Every lawyer interested in building a long-term relationship should know what is going on with key clients aside from the specifics of the legal issues at hand.

Performance Devices

Expertise for 90 % of all legal work in a reference market is typically available from five other firms. Firm conflicts or the unique experience of a given partner accounts for part of the other 10 %. Strong relationships with clients are built on service, and service depends on turnaround or speed. Few clients give enough lead-time to their lawyers because their agendas are full as well. Nevertheless, like most of us, they want service and results yesterday. The firm that promises tight turnaround and always beats the deadline comes out ahead of the firm that does the work just in time. Assuming that expertise on a file is equal, then superlative turnaround / service will support a 10 - 20 % price difference between competitors.

Cost Reduction

A few firms have recently launched cost reduction programs. But most have not re-examined their business model since the early 1990’s. Very little about cost reduction in law firms is about finding examples of waste. Instead, it is about doing business differently when it comes to the use of space, support staff and associates. There is evidence that firms can reduce their undiscounted weighted rates by $ 100 - $ 150 per hour by introducing fundamental changes to the mix of associates, paralegal employees and other staff. Savings approaching this order of magnitude can be shared with clients as part of competitive pricing strategy, or they can temporarily contribute to firm profitability while client relationships are being built or expanded.

The Client and the File

Sometimes, it’s a choice between being focused on the big picture – the long-term sustainability of the firm and the practice group, or on an individual practice. Too many firms are notoriously poor at cross-selling, or even at asking clients for more work of the same type. Finding just enough work to fill the remaining 150 hours of a practice is missing the mark. The goal is to find a growing volume of quality work from one’s top 25 clients and then ensuring that is passed on to one’s partners, associates and paralegals.

It takes a bit of research to find out the proportion of all legal work a firm is doing for a client in a reference market, and then to find out who else is providing legal services to your clients and the type and volume of work they are delivering. Firms need to target their top 25 clients and adopt measures to be the dominant provider of all legal services to the client. They then need to nail down multi-year partnering agreements for the work to protect and grow the relationship and the income stream. This takes a lot of work and it is essential in a mature market.

Unbillable Time

A firm’s most precious resource is its unbillable time. Again, few firms leverage this time across the partnership by aligning it with its business development priorities. The “elasticity” of legal services in a mature market depends on smart execution that builds and sustains the relationships, re-builds the legal business model, and exceeds performance standards. It takes the unbillable time of many to harness the constellation of relationships and innovation that reside in most firms.

* Richard G. Stock is a partner with Catalyst Consulting. The firm has been designated the Preferred Supplier for Legal Services Consulting by the Canadian Corporate Counsel Association. Richard can be contacted at (416) 367-4447 or through the website at http://www.catalystlegal.com.

LPM Section Survey Results

Last month, the Law Practice Management Section asked you to participate in a survey to give us a better idea of how we can best meet your expectations and needs. We are pleased to share with you what we learned from the sixty-eight members who responded.

A resounding majority (66%) of those responding work in offices with ten or fewer lawyers. 26.5% of respondents reported that they were Managing Partner. 35.3% are Associates in law firms. Respondents were most interested in learning more about continuing legal education (CLE), business development, compensation, current awareness, knowledge management and risk management. Technology also ranked fairly high.

As anticipated, most indicated interest in receiving written materials and attending live programs, rather than participating in on-line web seminars and list-serves. A slight majority prefer live programs in the morning, although significant numbers also prefer noon and evening programs.

From the open-ended responses, we learned that respondents have been most pleased with the written materials they have received, describing them as up-to-date and excellent. There is an appetite for programs with more materials to enhance live sessions. More than one respondent suggested greater focus on small firms and solo practitioners as well as practice outside the greater Toronto area. In terms of substantive content, respondents requested more practice management ideas, information on on-line research, and practice tools, like checklists and resources.

We thank everyone who responded. Our future programs, materials, and events will reflect the feedback we received. Since this Section represents members of firms of all sizes, we will aim to offer a mix of programs – some will appeal particularly to small firms, and others to larger, multi-service firms.

We hope to see you at our upcoming programs:

April 20: Law Firm Finances Series, Part III: Practice Management (Presenter: Richard Stock, Catalyst Consulting) - Breakfast

June 14: Law Firm Finances Series, Part IV: Retirement Issues (Presenter: Richard Stock, Catalyst Consulting) - Breakfast

June 22: End-of-Term Wine & Cheese with a brief presentation by Andrew Kent, Managing Partner of McMillan Binch Mendelsohn on challenges facing managing partners today.

Upcoming Programs

Law Practice Management: Financial Management for Lawyers Third Session – Effective Practice Management

Date: Thursday, April 20, 2006
Time: 7:45 AM
Location: OBA Conference Centre, 20 Toronto Street, 2nd Floor, Toronto

Law Practice Management: Financial Management for Lawyers Fourth Session – Retirement Issues

Date: Wednesday, June 14, 2006
Time: 7:45 AM
Location: OBA Conference Centre, 20 Toronto Street, 2nd Floor, Toronto

Publications

Title Date Interest Area Format Available

Practice Tips for Developing a Successful Legal Practice:Marketing, Networking, Rainmaking and Establishing a Clientele (YLD) 11/29/2004 Law Practice Management, Young Lawyers' Division Binder Download

Building and Running a Successful Practice 10/20/2003 Law Practice Management Binder

Professional Conflicts 10/24/2000 Law Practice Management Binder

Toolbox for a Healthy Practice 3/27/2000 Law Practice Management Binder

Marketing Your Litigation Practice: How To Be Remembered, How To Be Chosen 1/27/2000 Law Practice Management Binder

Multimedia Products

Section Executive 2005-2006

Chair: Lori Brazier, LL. B., MBA
Catalyst Consulting (416) 367-4447
lbrazier@catalystlegal.com

Secretary (Sections): Robert A. Muir
Blaney McMurtry LLP (416) 593-3951
rmuir@blaney.com

Newsletter Editor: Ginevra Saylor
McMillan Binch Mendelsohn LLP (416) 865-7071
ginevra.saylor@mcmbm.com

Technology Liaison: Richard B. Potter, Q.C.
i-lawmarketing.ca (613) 476-8998
rpotter@on.aibn.com

Member-At-Large: David Chaiton
Chaitons LLP (416) 218-1122
david@chaitons.com

Member-At-Large: David B. Debenham
Lang Michener LLP (613) 232-7171
ddebenham@langmichener.ca

Member-At-Large: Charles E. Humphrey
Stringer Brisbin Humphrey (416) 862-1616
chumphrey@sbhlawyers.com

Member-At-Large: John M. Sotos
Sotos LLP (416) 977-0007 x303
Jsotos@sotosllp.com

Staff Liaison: Janet Green
Ontario Bar Association (416) 869-1047 x312
jgreen@oba.org