Issue 33, Fall 2011

ANNOUNCEMENTS

It's fall and change is in the air! This new design of Management Solutions is just the beginning. 

New website: If you have not visited my website for a while, now would be a good time to do it.  We have a new look and some additional content, with more changes yet to come.

Exciting book news: Starting November 30, my bestselling book, Women on Top: The Woman’s Guide to Leadership and Power in Law Firms, will be available for download onto your mobile device! Get Thomson Reuter’s new ProView app and you can read, learn and be inspired wherever you go. In either format, it makes a great gift for every lawyer you know - men as well as women.

2012 Hastings Leadership Academy for Women: The dates for next year’s Leadership Academy are July 11-14, 2012. Put the Leadership Adcademy into your budget and your calendar and reserve a space now. Call 415-565-4640 or go to http://www.attorneyretention.org/LAW.

In This Issue

Professional Development Needs to Re-Examine Priorities

Over the last 10 years professional development has come into its own as an integral part of law firm management. Almost all major law firms now have extensive training curricula and a large number are adopting comprehensive talent management principles and systems.  Two recently published reports illuminate the current state of professional development (PD) in law firms. One is a survey that I conducted with Gaye Mara, Editor and Publisher of PD Quarterly that was designed to get a snapshot of several important aspects of professional development in law firms today.  A full discussion of that survey is published in the PD Quarterly and available to non-subscribers by request. (http://www.profdev.com/)  The other is a more formal study by The NALP Foundation, Leading Law Firm Professional Development, which surveyed law firm professional development leaders and associates in depth about the state of law firm PD.  Both reports produced some intriguing findings, and in one critical area, both reveal a major deficiency in current PD efforts: law firms are not paying enough attention to associates’ learning through on-the-job work experience.

Abbott-Mara Survey

This online survey was sent to 135 law firm Professional Development Directors and Chief Talent Officers (collectively “Directors”) in August, 2011.  We received 60 responses, a 44% response rate. Key findings include:

  • Most professional development directors have law degrees and practiced law for a period of time. However, the dominance of law graduates, particularly at higher compensation levels, is declining.
  • A rising number of Directors have PD-relevant qualifications, such as higher degrees in adult education and organization development.
  • The Director’s job is big and varied. Directors typically have firm-wide responsibility for 17 or more PD programs, most of them for associates but some for partners. They also have some level of involvement in another dozen firm initiatives and activities.
  • 91% of respondents said they learned the skills necessary for their job “on the job.”
  • Directors’ compensation has continued to rise even while PD budgets have decreased.
  • Most Directors feel they have the full support of the firm for PD efforts.
  • Half of respondents are members of their firm’s top management team; more than a third who are not on the top team feel their expertise is respected and they are consulted on relevant matters. 
  • Alternative career tracks for lawyer are increasing.  A substantial majority of respondents’ firms now employ lawyers in new categories such as career attorneys and permanent associates. In addition, firms are hiring contract attorneys directly, not through a staffing agency. 
  • Few law firms monitor associates’ work assignments and experience. 38.2% of respondents said their firms have no formal work assignment systems and 41.8% do not track associates’ work experience.  Firms that do have assignment and/or tracking systems report inconsistent use of those systems.
  • Nearly half of respondents have adopted a competency model but only slightly more than a quarter of those firms have a system in place to ensure associates receive the work experience needed to develop the skills and behaviors described in the competencies.
  • Relatively few of respondents’ law firms (18%) employ career coaches, and most of those coaches are part-time.

NALP Foundation Study

In September 2010, The NALP Foundation invited 520 professional development and legal recruiting administrators to participate in a web-based survey; in November 2010, associates in those firms were invited to participate in the survey. Many of the questions asked administrators about activities and changes over the preceding 18 months and expectations in the coming 24 months. The data in the report is based on responses from 205 PD administrators (39%) and 1,494 associates. 

Highlights of responses from PD administrators in the NALP study include:

  • Professional development directors are doing more with less. 63% of firms reported an increase in the scope of their PD responsibilities, while 19% of firms saw a decrease in their staff.
  • The top priority for PD has been “performance management, lawyer evaluations and reviews.”  Work allocation was one of the least important priorities.
  • Administrators said the top PD priority for the next 24 months is client relations and business development training. The next highest priorities for the future are lawyer orientation/integration and substantive legal training.
  • 85% of all responding firms, and 98% of firms of more than 500 lawyers, offered some form of training for clients, and the number of client programs is expected to rise.  However, in most cases PD personnel do not have primary responsibility for client training.
  • Firms anticipate a 50% increase in the use of technology-based modes of delivery for training (such as online and web-based programs), a 33% rise in the use of mobile devices, and a 40% increase in online interactive e-learning programs over the next 2 years.

The survey of associates revealed these thought provoking findings:

  • On-the-job training was ranked by 95% of associates as the most important PD function, followed by formal or informal mentoring. 
  • Associates rated live lecture or in-person formats as their preferred delivery modes for training. Programs delivered electronically were their least preferred.

Law firms need to change professional development priorities

What is apparent from both the Abbott-Mara and NALP reports is that law firms are putting their PD emphasis in the wrong place. While associates most value and desire on-the-job training, high quality work experience, personalized guidance, and attention from more senior lawyers in the firm, these aspects of PD are being neglected. Instead, firms are focusing on training programs. Associates in the NALP survey ranked “work related on–the-job training opportunities” as by far the most important PD activity. That’s how associates learn to become proficient lawyers: through work experience, not classroom or web-based programs. Professional development directors undoubtedly appreciate this; after all, most of them admittedly learned their own competencies for PD leadership on the job.

Though no aspect of associates’ professional development is more important than learning through work experience, few law firms make it a top priority. The Abbott-Mara survey found that while many firms have adopted benchmark and competency frameworks, only a quarter of those firms have a system to ensure that associates receive the work experience they need to meet designated benchmarks and competencies. Most law firms do not monitor associates’ developmental work experience. Few have formal work assignment processes and fewer still track associates’ experience other than to determine workload and availability.

Associates in the NALP study ranked mentoring as the second most important PD activity. This is in keeping with recent research[1] by PricewaterhouseCoopers showing that 98% of GenY believes working with a mentor is a necessary component of their development. (2011 PricewaterhouseCoopers Global CEO Survey) Yet NALP researchers found that PD administrators plan to make mentoring less of a priority than other PD functions in the future. The NALP report’s authors rightly caution that this “suggests a potential ‘disconnect’ between firm management and their associates in the importance of mentoring.” 

It is often a struggle to support mentoring in law firms, and firms naturally turn to training programs in order to teach associates the principles of practice they need to learn. Programs can convey information and teach basic skills. But true understanding, effective application and professional judgment require experience, ideally under the watchful eye of someone wiser and more experienced. 

Unfortunately, partners who should be supervisors, teachers and mentors are under enormous pressure to generate revenues and their minds are elsewhere. Even those who enjoy teaching and mentoring and accept the importance of both make little time for them, succumbing instead to the demands of business. This is nothing new.  In law firms historically, mentoring responsibilities often “fell to the side in the pursuit of profit.”[2] Charles Eliot told the Ottawa Bar Association in 1910 that “modern” lawyers had no time to mentor because they were absorbed by their legal work and by the faster pace of work caused by the typewriter![3]

While firms should be looking for ways to expand associates’ work-based learning and mentoring opportunities, they are instead concentrating on training programs and new delivery methods. Training is, after all, a very large part of the PD director’s job and the focus of most PD committees. And since most of those committees do not include associate members, the input into decision-making about PD activities and priorities comes from partners and managers and is very “top-down.” So it is not surprising that associates’ preference for mentoring and experiential learning may be overlooked. 

In addition to increasing their training programs, PD administrators are looking for new technology-based ways to deliver them. One of the top priorities for PD administrators over the next 24 months is expanding the range of electronic delivery methods, but by a substantial margin, associates dislike these methods. Lawyers, especially younger ones, are so tied to electronic devices that it is easy to assume they will favor programs delivered through computers and mobile devices. But even GenY appreciates the differences between transmitting knowledge electronically and learning professional skills, which requires hands-on practice and real-world experience. Technology-based delivery can be effective, but it is not a substitute for experience.

This is not to say that substantive training programs, performance management, and other aspects of PD are not important; they are. Moreover, it is reasonable for firms to accord high priority to management, business, and client-focused training. Most lawyers are not sufficiently knowledgeable or proficient in these areas, clients are demanding more of them, and training is also a key asset in client relationship management. However, developmental work assignments, one-on-one teaching, close supervision, shadowing and mentoring should be given more attention, not less, if the goal is to help associates develop into productive, proficient and fully engaged lawyers as quickly as possible. 

 


[1] http://www.pwc.com/gx/en/ceo-survey

[2] Veronica H. Ashenhurst, “Mentoring the Lawyer, Past and Present: Some Reflections,” Ottawa Law Review, Volume 42, no. 1, 2010-2011

[3] Ibid

Aligning Law Firm and Corporate Client Interests

Corporate clients are forcing law firms to change how they do business. As I wrote in an earlier issue of Management Solutions (Issue 24), clients are insisting on value-driven, high-quality legal services that deliver solutions for a reasonable cost – and they are changing the way value is determined and compensated. They are issuing restrictions, procedures and standards that they expect outside counsel to follow regarding how legal work is done and who does it. What is going on here is a fundamental transformation in both the attorney-client relationship and the way legal services are retained, managed and paid for. 

Lawyers need to understand this in order to serve and retain current clients and attract new ones. Firm leaders and professional development directors need to understand it in order to redesign systems and teach lawyers how to operate in this new business environment. The first source for this information is conversations with firm clients. But it is also important to look at the broader trends and patterns in the legal marketplace. The Abbott-Mara and NALP surveys discussed above found that law firms conduct a great many training programs for clients and they expect client programming to grow. In order to make client programs meaningful, regardless of the topic, firms must understand and address what clients are thinking about and looking for.

Fortunately, there are resources available that provide guidance about what clients want, what clients and firms are doing about it, and how to implement many of the changes clients are demanding. One source is LegalOnRamp, a collaborative website where in-house counsel, outside lawyers and third party service providers share knowledge, ideas and resources. Members (who must be invited to join) post information, best practices, forms, presentations, and even databases. Some parts of the site are limited to in-house counsel, but the discussion groups and many of the documents and resources are open and available to law firm members.

A more expansive resource for law firms is the Association of Corporate Counsel “Value Challenge.” The Value Challenge is designed “to reconnect the value and the cost of legal services.” Since its launch in 2008, the Value Challenge has generated a momentum for change that is powerful and growing. Its website offers a wealth of information, innovative ideas, best practices, training materials and toolkits for law firms. These various resources fall into ten areas that are considered “key levers” to improve value in attorney-client relationships:

  • Aligning Relationships
  • Value-based Fee Structures - i.e. not based on the "billable hour"
  • Staffing and Training Practices
  • Budgeting
  • Project Management
  • Process Improvement
  • Use of Technology
  • Data Management
  • Knowledge Management
  • Change Management

Let’s look at the first listed area, “Aligning Relationships.” Firms that prize their client relationships must align their interests with those of their clients. This requires a thorough understanding of the client’s business, goals, and tolerance for risk. It also requires a high degree of transparency about how legal work will be done, who will do it, strategies to be employed, the business and legal risks of each strategy, expected outcomes, and how all of those factors will impact the client’s fees.

Innovative corporate counsel and law firms are building trust and seeking mutual benefit by aligning their interests around both the client’s objectives and the law firm’s fees. They are developing ways to work as “professional partners.” The hallmarks of these efforts are communication, flexibility, feedback and assessment, incentives for extraordinary performance, and a search for continuous improvement.

One firm that has taken an innovative approach is Seyfarth Shaw, which was featured in an earlier issue of Management Solutions (Issue 28). The firm’s system, called “Seyfarth Lean,” is based on a Lean Six Sigma model of process improvement and project management. Using it, the firm and its clients map the delivery of legal services, identify areas where efficiencies can be gained, and predict legal costs with greater accuracy.

Here are two other examples of innovative practices; both originated with corporate clients and promote closer partnering between them and outside counsel.

FMC Technologies’ Alliance Counsel Engagement System (“ACES“). FMC developed this model to achieve relationships with outside counsel based on partnering and sharing risks and rewards. The ACES performance-based model works for any form of legal matter and with any form of fee arrangement (including hourly bills, fixed fees and retainers). It is supported by a technology platform developed by FMC for sharing information and promoting collaboration between in-house and outside counsel.

Key features of ACES include:

  • FMC and the firm agree at the outset on objectives and service level expectations.
  • During the course of the engagement, FMC withholds 20% of each invoice and puts it in an "at risk" bucket.
  • FMC gives the firm structured feedback in the form of a “report card” that assesses the firm on 6 factors: responsiveness, goals achievement, effectiveness, knowledge, predictive accuracy, and efficiency.
  • At the end of the matter, FMC pays the firm 0-200% of the "at risk" amount based on the firm’s report card.

Under the ACES model, successful firms can get a higher effective billing rate, which the company gladly pays because of the value delivered. General Counsel Jeff Carr has said FMC pays firms on average 107% of their invoiced fees yet FMC has still managed to reduce its legal expenses.

Pfizer’s Legal Alliance (“PLA”) Program.  One key objective of Pfizer’s Legal Alliance is to foster trust and collaboration with its outside counsel. The Alliance currently includes 17 law firms around the world and covers about 75% of Pfizer’s legal expenses for all legal matters. All Alliance firms work on a fixed fee basis and are expected to collaborate with each other in serving Pfizer’s legal needs.

A Pfizer Steering Committee oversees the Alliance, setting long-term strategy and each law firm’s annual fee. The PLA’s Chief Counsel, Ellen Rosenthal, recently explained that Pfizer forbids its lawyers from talking about hours when discussing fees with Alliance lawyers. Instead, Alliance firms receive an annual fixed fee that is paid in 12 monthly installments. There is a potential for bonus payments based on collaborative behavior and successful outcomes, not on the amount of work done.

Through the PLA, Pfizer tries to build long-term relationships with Alliance firms, and promotes collaboration with and among Alliance counsel in many ways:

  • A Roundtable of corporate counsel and Alliance firm lawyers drafts and executes a strategic plan, develops program metrics and evaluations, raises problems that may be occurring throughout the Alliance, and works together to find and implement solutions.
  • Pfizer sponsors workshops for member firms on best practices, including training on how to work efficiently and collaboratively, and how to manage work on a flat fee basis.
  • Alliance members use technology tools that foster communication, collaboration and knowledge sharing.
  • Pfizer’s law department has a dedicated website for Alliance members that includes firm and lawyer profiles, articles and other resources.
  • Pfizer holds periodic meetings for Alliance firms.
  • Pfizer lawyers visit Alliance firms.
  • Seconded lawyers from Alliance firms work at Pfizer.
  • Balanced Scorecards are used twice yearly (1) by Pfizer to assess firm performance and (2) by Alliance firms to assess Pfizer and each other.

More about FMC, Pfizer and other new approaches to the attorney-client work relationship can be found on the ACC Value Challenge website. Every law firm should be developing ways to increase the value and limit the cost of legal services. For inspiration, ideas and guidance, the ACC Value Challenge is an excellent place to start.

Institutionalized Gender Bias Is Proven In A Wall Street Law Firm

An important recently published study by Monica Biernat, M. J. Tocci and Joan C. Williams clearly shows the adverse impact of implicit gender bias on women lawyers.[1]  The study uncovered significant evidence of subtle but harmful gender bias in the evaluation process at a large Wall Street law firm with a low number of women partners. The research team analyzed evaluations of male and female associates, comparing numerical ratings and narrative comments. They found that women who received the same narrative comments as men about their technical competence and partnership material received lower numerical ratings than men.  Similarly, “rave reviews” in narrative comments for men boosted their numerical ratings, but the same raves for women produced no benefit.

The disparity between narrative comments and numerical ratings is important because the firm under study relies on numerical ratings for partnership consideration. On the basis of their data analysis, the researchers concluded that men in the firm are three times more likely to be promoted to partnership. But in an interview published on The Careerist blog, one of the researchers stated that when presented with the study results, the firm was “unwilling to do anything about it.”

This study proves that bias toward women is pervasive in this firm’s evaluation system, unjustly reducing the chances for women to become partners even when their performance, competence and partnership potential matches that of men. This exemplifies what women are up against in law firms. As I have written before (Issue 30), women cannot advance in law firms when firms refuse to remove the institutional barriers that hold women back but let men through.

 


[1] (The Language of Performance Evaluations: Gender-Based Shifts in Content and Consistency of Judgment, Social Psychological and Personality Science, published online 18 July 2011 http://spp.sagepub.com/content/early/2011/07/15/1948550611415693)

One Step Above Award

The Women’s Marketing Initiative at Florida’s Fowler White Boggs has come up with a clever approach to support women in business development: the “One Step Above” Award.  Given to a different woman each quarter, the award honors women for successful business development efforts. The award consists of a stunning silver shoe in a plexiglass case (see photo below).

Any woman lawyer in the firm at any level of seniority is eligible to receive the One Step Above award. Each award recipient displays the shoe in her office until the next award winner is selected. At that time, a meeting is held to make the announcement. Those present share a champagne toast and the woman being honored relates the accomplishments that merited the award. The recipients’ individual stories elevate awareness of what goes into successful business development, while the multiplicity of success stories over time become a source of support and inspiration for all the firm’s women as they engage in business development activities.

Women's Marketing Initiative

Recent Publications

InsideLegal Thought Leaders Digest: COLPM Issue, Volume 1, October 2011

Download Issue in PDF format 

Co-authored with Gaye Mara, PD Quarterly November 2011

Request a copy

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Upcoming Events

Professional Development Institute

I will be presenting at the 2011 Professional Development Institute, December 8-9, in Washington, DC, on global approaches to mentoring, using IBM's worldwide legal department mentoring program as a case study.  

Leading Women in Technology and Paragon Legal

January 11, 2012 - January 12, 2012

Leading Women in Technology and Paragon Legal are co-sponsoring a program in Palo Alto, CA to examine "Unspoken Secrets Women Need to Know for Success." I will be speaking and moderating a panel that includes Van Dang, Vice President, Law & Deputy General Counsel at Cisco Systems, Inc.; Delida Costin, General Counsel of Pandora; and Marilyn Nagel, CEO of Watermark.