Is Your Firm Culture Working Against Business Development?

My most recent column for Slaw was published today and it deals with the issue of creating a business development culture within your law firm.

I've worked with a number of law firms who have unwittingly created a culture that works against business development, rather than supporting it. Partners lament the lack of effort made by associates or even young partners to develop business. They can't understand why lawyers wouldn't want to increase their income by bringing in business. After all, they get a 'piece of the action,' so why not put in the effort?

Business development takes time and effort. Our culture in general is increasingly impatient. Instant gratification is the order of the day. But instant gratification is rare when it comes to business development. It can take months or years to cultivate relationships that ultimately bring in business.

Not only does the culture work against a business development mindset, but firm culture only makes things worse. Firms expect lawyers to put in the effort to develop business and to focus on the potential long term rewards, but often this means sacrificing billable hours, and therefore compensation. That's tough at any time, but in this economy, it's even less likely to motivate lawyers who may have already taken a financial hit. 

Many firms support lawyers in furthering their legal education and legal skills by providing training on substantive legal issues, having younger lawyers work with more seasoned lawyers to observe and learn from their expertise, supporting attendance at continuing legal education programs or providing those programs in house. But how many firms actively educate attorneys about business development, support business development efforts (as opposed to merely rewarding results), or cultivate business development skills? How many rainmakers mentor other lawyers, allow them to observe their client development efforts or make specific suggestions about business development to others?

Too many law firm partners and managers dismiss the idea that business development skills can be taught or nurtured. Instead, they assume that lawyers either have 'it' or they don't. They complain that their lawyers aren't doing it or aren't capable of doing it without putting in any effort to determine who has the potential to develop business and to support those individuals in any meaningful way.

For more of my thoughts,  read my Slaw column on law firm culture and business development - and let me know what you think, too.

Comments

[Betsy Munnell]

Precisely. Well said. It continues to amaze me that so few law firms are willing to make meaningful investments in their young lawyers. Business development and other practical skills training is woefully rare--offered, for the most part, at neither law schools nor law firms.

It is especially difficult to right this boat now, since all professional development money is short in a free falling economy--and, of course, this type of training is usually funded (if at all) under the professional development budget, which is inevitably far less robust than that of the marketing department.

Note also that in the average mid to large law firm the annual budget is a function of the number one driver of of our profession--profits per partner (and the AmLaw ratings of which PPP is the key component). Associate training is the classic law firm "soft cost"-- among the first to be cut, and the last to be expanded, in many a BigLaw firm. There have been some recent exceptions--Milbank, Skadden, Drinker Biddle among others. But I don't see a real trend developing yet.

The self-reliant lawyer needs to figure out how to get this type of training herself--through the state (or an affinity) bar association perhaps. Or he could discipline himself to spend an hour or two every week in the blogosphere, where there are a number of smart commentators blogging wisely on the topic. Your blog included.

The Slaw article you reference above is really excellent, honestly. One of the best, and best written, articles on the topic that I have read. And it's free. I wish more firms would take it to heart.

[Mike O'Horo]

IMO, part of the problem is ignorance and denial. Law firms have been blessed with decades of demand robust and reliable enough to absorb a never-ending stream of rookie lawyers at (recently) staggering starting salaries, annual rate increases, 40% gross margins, and public bragging about the resulting partner wealth (annual PPP rankings). They've been lucky for a long time.

Let's be fair. Under such conditions, who would expend effort to understand marketing and sales? After all, for most of their history, they had no need for either. When you're making a ton of money without strategic intent (as one longtime client of mine was fond of expressing it), marketing and sales are irrelevant, intellectual abstractions. What rational person uses scarce time to learn about irrelevant topics?

Under such conditions, sales training was not the mission-critical endeavor it is for firms' corporate clients, but a nice-to-have, a sop to partners who wanted to excel and had the juice to command the firm's investment on their behalf.

Under such benevolent and lucrative conditions, why would firms invest in preparing a larger sales force, when the current non-sales environment was working better than well?

Now, with legal service demand manifestly (and permanently) lower than the lawyer supply, and competition fierce, suddenly firms are feeling pressure to get more -- if not all -- hands on the biz dev oars.

Yet, as Allison points out, those firms' cultures, habits and protocols all are organized around production, i.e., billable hours.

It's not much different than a tire factory that has for decades has spent its money and brainpower improving production capability to maximize the number of tires they push out the door each year. When they suddenly face a drop in demand due to longer-lasting tires, an aging population that drives less, and high fuel prices that discourage driving, how could they possibly know what to do? They were hired for their production know-how.

New conditions require new leadership with relevant skills. An old dog may be able to learn new tricks -- but never as fast as the market will require. It's not their fault; marketing and sales pros have put in their 10,000 hours to achieve expertise. Law firm management can't squeeze 10,000 hours into the handful of months the market will tolerate the old ways.

You gotta get a new dog that's not in denial and is comfortable with what must be done.

Too many law firms behave as if the current drop in demand is temporary, a business cycle that will soon correct itself and return them to business-as-usual, i.e., business coming in the door without having to market and sell effectively. Hiring a couple more BD people will have zero impact on a 600-lawyer population, and those people's bandwidth will be consumed in an hour. We're seeing Band-Aids where a MASH unit is needed.

As the ABA and the state bars will attest, the lawyers in the trenches are anxious and screaming for help. The leadership, so far, seems disinclined to hear them meaningfully.