Secrets to successful practice groups
By Susan Raridon Lambreth, Hildebrandt International, Posted December 2007
While most large law firms have had practice groups operating for many years, only in the last five- to 10 years have most Canadian firms made practice groups the primary form of firm management. Prior to adopting this kind of structure, most firms had grown through adding offices, and below the central firm management level, the regional/provincial offices were the main way of managing the firm.
As firms implemented national or firm-wide practice groups, they discovered that they can attract national and international clients, achieve much greater profitability, create more consistent client service across their firm, increase lawyer retention, and more. When it comes to implementation, there are almost as many different structures as there are law firms – there’s no “one-size-fits-all” solution, there are common elements, evident at the both firm and practice group level, in the successful firms.
Keys to success – firm level
First, a firm must select a structure that will allow it to accomplish its strategy. A narrow boutique practice in labor and employment, for example, wouldn’t be a good candidate to adopt a practice group strategy because most, if not all, of the lawyers would be in one practice group. Should these types of firms experience growth, such as U.S. firm Littler Mendelson, they’re generally managed at the office level, with a secondary management structure of industry teams.
Face time is required for group members to build trust and develop a real group identity and commitment to each other.
For most multi-service and multi-office firms pursuing high value work across provincial borders, the structure that makes most sense is one where the practice groups are the primary management dimension and offices are secondary. A few large firms in the U.S. – and a slightly larger number in Canada – still have offices as their primary management dimension, and practice groups are secondary. Our experience indicates that these firms do not usually compete for national work at the same level as firms that are managed primarily through practice groups.
Second, the compensation system must be aligned to support practice group activities – both by the leader and the members of the group. The primary factors for compensation in many firms historically are production and business generation, mostly on an individual basis. For practice groups to be successful, partners have to be compensated, in part, by how their group performs and how they have contributed to that group’s success.
Otherwise, you find that a few partners are “good citizens,” but most of the burden of the group’s work falls on the group leader and there is only a limited amount the group will be able to accomplish.
Third, and related to the second, partners must buy in to being part of the group activity and not just acting like “lone cowboys.” Some law firms historically have been more like a loose confederacy of sole practitioners operating under one roof. Unless they are able to get partners to change – a difficult task – these firms are rarely successful with practice management.
The key areas where individual partner autonomy are most affected are in client intake (which must be controlled by the practice group leader, or someone in firm management above the leader, but with their input), work assignment (where the leader must have the authority to have a partner use someone other than their “favorite associate” if that’s not the best decision for the group) and financial performance (where all partners in the group must feel that their compensation is affected by the group, and thus they will actually take time to train associates, be accountable for the integration of lateral hires, not accept discounted work that devalues the group’s image in the marketplace, etc.).
Firm management must be willing to hold partners accountable for participating in the practice groups, and for not undermining the practice groups. Experience indicates that if you try to have practice group leaders operate without this level of buy-in, they tend to either “burn out or burn bridges.” Then, in a few years, when the firm tries to implement practice management again and do it “right,” the best people for the practice leader jobs either can’t or won’t accept the role..
“Assuming you have a capable replacement, leaving an ineffective practice group leader in the role undermines the effectiveness of other practice group leaders as well.”
Fourth, firm management needs to develop clear job descriptions for all the practice management roles – department chairs, practice group and team leaders, office managing partners, industry team leaders and client team leaders. Then, after consulting with the individuals in these roles, these desc riptions need to be communicated clearly and repeatedly to all lawyers and staff. Practice leaders have less risk of being viewed as “czars” when firm management does a good job of communicating these roles and expectations and getting buy-in from their partners.
Fifth, the firm should select the right people as practice group leaders. Ten years ago, many of the practice group leaders were the top rainmakers or senior lawyers in their groups. According to our surveys, today few of them fit this description – not because a rainmaker isn’t capable of doing the job, but because they typically lack some of the necessary strengths needed for the practice group leader roles, including:
- a firm-first, selfless attitude – willingness to put the group success above their personal practice;
- excellent interpersonal skills and at least good emotional intelligence;
- good personal management skills (they can’t be the person who is always late getting their time in or bills out);
- respect and credibility with members of their group; and
- an interest in, and, hopefully, understanding of, the marketplace for the group’s services.
While there are many other important skills or competencies for the role, these are often the most important. In addition, if a practice group leader is not doing an effective job, firm management must be willing to replace him or her. Assuming you have a capable replacement, leaving an ineffective practice group leader in the role undermines the effectiveness of other practice group leaders as well.
Keys to success – practice group level
The keys to success at the group level are:
- understanding the effect the size of the group can have on the group’s cohesion and long-term performance. Even though they crop up at most firms, groups that consist of more than about 25 members are very difficult to manage. To develop cohesion, management must find ways to have members work toward common goals in smaller groups (preferably fewer than 12 per group);
- ensuring the group develops common goals that both require group activity and are inspiring. The development of common goals is the most important step in building group cohesion. These goals must require group members to work together in order to realize the goals. Goals that can be accomplished simply by each member continuing to do their “own thing” do not build group cohesion and commitment;
- holding monthly meetings focused on the “business of the practice group.” These meetings should address topics such as an examination of the group’s actions aimed at accomplishing its business plan, how the group’s competitors are doing, and what new trends are affecting the group. These meetings are not primarily for training or for workload discussion. Where practice groups cross many offices, these meetings are usually held via videoconference, but today’s large firms have a retreat, held at least once annually, for each practice group, either separate from the rest of the firm or in conjunction with the firm’s general retreat. Face time is required for group members to build trust and develop a real group identity and commitment to each other;
- developing a practice group business plan. This is not primarily a marketing plan, though marketing is an important part of it. A group business plan begins by assessing the market for the group’s services (what trends are affecting the group’s services, clients, etc.), who the group’s main competitors are and how the group is differentiable from them. Then, it needs to have one- to three key goals that inspire group members to make the extra efforts to contribute to the group’s activities. The plan should include what human resources the group needs (lateral partners and associates), what new services the group is developing, how it will train and develop its lawyers (partners as well as associates), how it will use knowledge management to compete, and the business development and positioning steps the group will take. Plans with lots of marketing activities and without the other steps above typically fail;
- recognizing your limitations as a practice group leader in doing the job. The practice group leader who tries to do too much of the job alone usually fails. Instead, leaders must learn to delegate. Delegation is not an admission of failure. In fact, it helps the group members buy into the group goals and what the group is doing and creates a greater sense of ownership. They also need to be careful not to take on too many projects for the group at once and to prioritize so the “urgent does not drown out the important”; and
- not seeing yourself, if a practice group leader, as primarily an advocate or cheerleader for your group. Pushing for higher compensation for all the group members or pushing to have associates made partner, even if they are not yet ready, is one of the quickest ways for a practice group leader to lose credibility in the eyes of firm management. A practice group leader must adopt a balanced approach and recognize that not everyone in the group can get an “A.” While putting all of these elements in place isn’t easy, there are dozens of successful firms who have and reaped the benefits. Start by working on the key elements at the firm level and identify whether any areas are lacking in your firm. While some of them are interrelated, you may not have to tackle all of them at once, instead moving through them sequentially.
For more information on each of these elements and how to address them, visit www.hildebrandt.com and click on “Practice Management.”
Susan Raridon Lambreth is a vice-president at Hildebrandt International. She has acted as a consultant to law firms for 23 years. She has written two major books on this area for law firms – Achieving Peak Performance Through Practice Management (2003) and The Practice Group Leader’s Handbook for Success (2005), along with dozens of articles on the subject. Hildebrandt has conducted surveys of the major Canadian law firms on practice management approaches and of the AmLaw 200 firms in the U.S. She can be contacted at email@example.com or 800-223-0937, ext. 220.