Before I left my job as general counsel at a software company, I was offered the chance to become general manager of a product group.
Unlike my previous role, the GM job didn’t report to the CEO, but in corporate terms it was still viewed as more important than a “staff” job, because you were responsible for overall profit and loss; product definition and pricing; composition and compensation of your group; and for ensuring service delivery (in a complex software product, there is always a lot of service). My pay would be tied to the financial performance of the group, and while I wouldn’t control the sales organization, a big part of the job was to train and influence sales staff to be more effective in selling your products and to talk directly to customers. I would have to decide how much to invest now to expand sales in the future, but I would primarily be held accountable for this year’s performance.
What the GM no longer did was the traditional role of “middle management,” i.e., to serve as the channel of information from the CEO down through the rest of the company and back up to the CEO, because email (and now Web-based collaboration systems) provide that basic information exchange; and goal-setting, compensation and management information systems provide the basic structure. Instead, the GM’s job was to try to help everyone in the group perform to the peak of their abilities, in large part by ensuring that individual incentives were aligned with collective (hopefully long-term) performance.
After I spent some time away from law, I did some consulting with a law firm and encountered what was (for me) the newly instituted role of “practice group leader” in the large law firm. Naturally, I assumed it was like a GM role, so I asked a series of questions:
Is the PGL’s compensation tied to group financial performance, especially profitability of the group? “No.”
Can the PGL hire and fire members of the team? “Not partners.”
Does the PGL get to decide what “products” the group offers? “Only by influence.”
Does the PGL have real-time information (a dashboard) about the key drivers of the group’s performance, such as client satisfaction, profitability, scope of business? “No, just billings and realization data.”
Does the PGL spend a lot of time talking to clients to understand what they want and how to institutionalize practice group-level value? “I’m not sure the other partners would welcome a partner talking to their clients.”
So what does the PGL do? “Well, they still worry about their own practice. They can cajole partners sometimes to do things. They keep up morale.”
This definition of a practice group leader is more akin to an administration head, like the chair of a department in a university, where everyone has authority and therefore no one had authority. It struck me as emblematic of the usual “platonic” style of management in law, in the sense of adopting a shadow version of something that was being done among clients without importing the substance, of getting big without getting especially serious about what it would require to be big and effective.
But in fairness, there is a reason historically for the weak role of the PGL, just as there is in the university setting. Unlike my old company, which truly has a “product,” in law firms the individual lawyer (partner) is the product, who for a variety of reasons has limited incentive to coordinate deeply with other partners for the creation of a practice group-level product. As long as business was good, the lawyer was the product, the lawyers wanted autonomy, and the competition was doing the same thing, defaulting to the administrative PGL model made sense.
Last week I had the pleasure of speaking to a group of PGLs at a workshop led by my friend, Canadian legal consultant Patrick McKenna. They acknowledged the vague nature of the job (few if any had a job description or compensation tied in a clear way to performance). I jokingly called the PGL a “JOIS” (Job Of Indeterminate Scope). Many agreed with my suggestion that the most common reason folks took on PGL roles was defensive, to prevent someone else from doing damage in the role.
But far more important was their determination to make the PGL job more real. If you look at all the New Normal themes in law today—value, aligned fee structures, project management, talent development, use of technology, innovation—they all can be delivered most effectively through better practice group management. In fact, given the fractious nature of many firms’ decision-making, it probably makes much more sense for firms to institutionalize innovation and change at the level of the one (willing) practice group and then see how they can be generalized throughout the firm.
Many firms operate under the illusion that management is unnecessary, even anathema, in law. But in fact every successful law firm is the legacy of an effective leader (and manager) who may have had sufficient authority that they could shape the firm. Think Larry Sonsini, David Boies, Fred Bartlit, Steve Susman or Richard Testa. The tricky part comes when the effective founder/leader hands off to a second or third generation of leadership, who lacks both their authority and their “magic.” That’s when the PGL structure needs to come in play, to provide leadership closer to the coalface. The bad news is that few if any PGLs will have clear leadership and role models within their firm to ensure their success; the good news is that the federated nature of a firm (like a university) means there is nothing in the firm to prevent their success, if they’re willing to get out and do and learn. Many firms will end up like Kodak, but any PGL who wants to get things done, can.
Last night, I got to hear Anthony Marx, the new head of the New York Public Library, give a very visionary talk about his plans for the library in the digital age. Unlike the heads of many traditional institutions who bemoan the implications of the New Normal, Marx was very fired up, describing his plans to expand access to information to traditionally underserved groups.
According to Marx, “technology is not a threat. It is the greatest tool we’ve ever had to expand our reach … we’re on the verge of a new renaissance for libraries.”
So will the New Normal be a renaissance or Armageddon for law firms? It’s all in the hands of the PGLs.
Paul Lippe is the CEO of the Legal OnRamp, a Silicon Valley-based initiative founded in cooperation with Cisco Systems to improve legal quality and efficiency through collaboration, automation and process re-engineering.