Law firms give lawyers minimum billable hours targets to meet. There is nothing wrong with setting expectations, I guess. The theory is that you make the lawyers aware of the firm’s expectations, and they then work to achieve them. Transparency is good.
I recently authored an article about law firm compensation systems, lamenting how they are usually laser-focused on billable hours and business brought in, but not so much on all of the other skills required to build a great firm. Of course, there is a great deal of lip service paid to the so called ‘soft factors,’ but the conversion rate of lip service to cash for ‘soft factors’ is not particularly great.
Many years ago, the managing partner of my firm, who I will call Sid because that was his name, had on his desk a replica of a dogsled with a team of dogs in single file. There was a pithy saying attached to the sled which read, “if you are not the lead dog, the scenery never changes.” Think about that for a minute. No, I mean really think about it. Take a moment to focus on exactly what every dog following the lead dog had to look at for the entire trip.
I was once hired at a firm to replace a much more senior corporate lawyer who I will call Carl.
One of a number of things which Carl had done to cause the firm to search for a replacement was that he had gamed the compensation system. Under that system, Carl was paid a bonus based on a percentage of his billings, without reference to collections. This would be a fatal flaw in any compensation system, but at the time the firm was new to that type of thing and had not yet figured that out.
Let’s say that a partner at a law firm has been there for quite a while and is getting older, a situation in which I once found myself.
And let’s say that the partner is done with working lots and lots of hours and wants out. Perhaps the partner has become tired or has had a health scare or no longer deals with stress as well as he or she or they once did or finally realizes that there is more to life, or whatever.
I have two stories to tell. One of them is 40 years old. The other is 4 weeks old. They are remarkably similar and do not reflect well on law firm cultures. Unless, of course, you think that these two stories are atypical. I will leave that to you to decide.
Every so often law firms hold lawyer retreats, which are generally broken into three segments.
In the summer of 1976, I worked for the largest law firm in Montreal, which was Ogilvy, Cope, Porteous, Montgomery, Renault, Clark & Kirkpatrick, as a student doing research. You likely do not know that name, but you may recognize the name of its successors Ogilvy, Renault and Norton Rose.
In law firms, partners are represented by two separate yet equally significant groups. The innovative partners who drive the firms forward, and the old guard who advocate for the status quo to protect their incomes. These are their stories.
Lawyers are not generally known for their accounting expertise.
It is not that accounting concepts are too difficult for lawyers to learn. In fact, a lawyer can be a very quick study when working with accounting concepts which are relevant to their files.
The problem arises when it comes to matters which affect their own income. In these cases, lawyers tend to apply their creative talents and their persuasive skills to cloud the issues in their favour.
Warning: The article below contains 30 seconds of material about accounting. Please power through and do not tune out.