Can Law Firms Put Aside Focus on Single-Year Profits? Crowell Chairman Says They Must
Law firms that focus on single-year profits and that employ information-hording lawyers won’t be able to deliver on client demands for greater efficiency, according to Crowell & Moring chairman Kent Gardiner.
Law firms competing for business need “a first-class knowledge management program” and well-trained associates, Gardiner says in an article for the National Law Journal. A law firm’s expertise justifies premium fees, but clients won’t pay firms to reinvent the wheel.
Crowell & Moring recognizes the need to train its associates, but also realizes that clients won’t pay large-firm rates for document review and other projects that can be done at a lower price, Gardiner says. The firm’s plan is to send its associates to clients’ offices where they will be able to learn their businesses. The idea, he says, is to develop associates’ expertise and provide more value to clients.
To meet client demands for efficiency, lawyers will have to share information and make a considerable effort to contribute their work product to databases, he writes. Firms will have to focus on quality and results, but such a long-term partnership with clients requires “extraordinary patience, investment and integration among a firm’s lawyers and practice groups,” Gardiner says. “Firms with weak, fragmented or siloed cultures will not be able to pull it off.”
Law firms will have problems investing in knowledge management, he adds, if they have weak economic foundations or an undue emphasis on single-year profits.
“The essence of partnership with clients is delayed economic gratification,” Gardiner writes. “Investing in the development of our associates means we get paid less for them now, during their training, and more for them later when they are trained. Success-based fee arrangements mean we get paid less for our services now, and more when we win. These are hard messages for law firm leadership to deliver, whether at partner meetings or their Am Law 100 interview.”