I recently spoke at a prestigious legal sector event with over 300 attendees. Most of these were partners from midsize law firms, and they were among their firm’s 20 to 40 partners. I spent time with many of these interesting partners late into the evening, comparing notes, speaking about their firms’ growth challenges they’d overcome, and hearing about what was important to them.
Interestingly, making more money wasn’t a priority for many of them.
At one point, I was in a group conversation with three highly successful partners from these midsize firms. At first, they seemed to have it all handled. None of them were fee-earning anymore, and they were free to use their time to focus on the work they enjoyed and on activities that effectively built their firms to keep up with the changing times.
So I then asked them what challenges, if any, they currently face. It was clear that internal disputes, especially between the partners, were the greatest challenges they’d had to overcome or were currently the greatest challenges they faced. This made sense in my experience, but I’d never fully understood the importance of solving these disputes, even though I’ve had several years of experience doing so.
One of my clients, the MD of a mid-size firm with around 100 team members, was one of five equity owners. When we started working together, he was in tears because he was so worried about his future in the firm. He aspired to take the firm to new levels of profitability while maintaining a great work culture. The problem was that the other partners didn’t take his suggestions seriously, and no matter what he said, he could never get the other equity owners to agree to move forward with his ideas, which were in the best interest of everyone at the firm.
This had gone on for months and got so bad that he could see that the other equity members would ruin the firm’s success for everyone.
This is because all three of the other equity owners in the firm were constantly busy doing billable work and prioritised this over supporting the heads of departments who reported to them, who in turn supported the associates below them. Because of this, profits hadn’t particularly increased for years. They also had a bit of a staff turnover issue, team members not hitting their billing targets, and problems with their central database, which was outdated, based on slow technology, and full of duplicate client entries.
All of these ineffective systems, workflows, and evidently bad working relationships across their firm simply continued because the partners weren’t willing to be honest with themselves about what was best for everyone in the firm. Though my client could see it, the others weren’t willing to because they selfishly wanted to keep doing what they’ve always done because it felt comfortable.
I really felt for this MD. He was stuck and couldn’t see how he could steer the ship in a new and better direction for everyone.
Over the following six months, this MD and I worked together, and the first part that made all the difference was guiding him to become skilled at listening instead of defending himself and asking each other equity members what they wanted to achieve from their position in the firm.
Once my client discovered this, he experienced a huge relief and ease because now he could support the other equity members in achieving what mattered to them. As a result, they no longer saw him as a threat; they opened up to him and began to listen to his ideas. Next, we showed the rest of the equity members how much more profitable the firm would be if, instead of them billing lots, all the associates across their firm hit their firm-wide billing targets instead.
Soon enough, one equity member fully supported my client’s ideas for growth, then two, then all five. After further work showing my client how to show others how to lead and manage effectively, three of them now have teams effectively supporting them. Hence, they now get to bill fewer hours while spending more time supporting each head of department to succeed in managing their associates to hit their targets.
One of the other equity members enjoyed doing billable client work, so the other members agreed he could be left alone to focus on this.
The fifth equity member has now become the head of BD and spends a major part of his time creating new business opportunities for the entire firm.
My client now loves leading his law firm and enjoys collaborating with all the other equity members towards agreed-upon common targets. As a result, only six months later, the firm has already seen a decent improvement in profitability, while each equity member is enjoying having shaped each role to enable them to do more of the work they enjoy, which is enjoying better remuneration.
I often see this: solve the disputes between partners or equity members first, and all the other problems across the firm become much, much easier to solve. If you have disputes between your firm’s leaders, will you turn a blind eye? Continue as usual? Or will you be the hero who creates an inspiring new future for everyone you work with?
Dan Warburton works with law firm owners to increase their profits and reduce their workloads
