Spring 2012 Edge International Review   

Mike White is joining Edge International to continue his consulting practice. With more than 20 years experience as a lawyer and manager of multiple business services companies, Mike White is a domain expert in the field of legal services client acquisition, partner business development training and planning, and partner management. Mike also works with law firm in the strategy areas, particularly as it relates to how and where firms should be interfacing with their market. Mike was a practicing attorney for seven years prior to founding and operating two enterprise software companies -- Sirius Systems (sold 1997) and MarketingCentral (sold 2007). He owned and managed ClientQuest Consulting, LLC for 10 years serving law firms in the business development strategy, consulting and coaching areas. He holds an AB in History from Duke University and a JD from Emory University School of Law.  Mike can be reached at mwhite@edge-interantional.com 

Before the advent of marketing departments, websites and branding advisers, law firms rarely thought about their organisational values. Now, virtually every law firm proudly trumpets a set of  so-called unique and compelling values on their website and in their literature.  And yet, when you talk to law firm partners about their firms values, many can barely remember even one of them, and others will tell you that the list was drawn up by the marketing department when the firm last re-branded.

I have been fond of saying that law firms often demonstrate as many different strategies as they have partners.  It  is a bit the same with values as these tend to be individually held rather than organisationally embedded.  This is  because our values comprise those unconscious, deeply held inner beliefs that we all hold as individuals, that we  take for granted but that underpin our attitudes and behaviours.  Not only is it difficult to define a law firm's shared values, it is equally problematic to make them relevant in every day life.  And as for managing by reference to those values, just forget it unless you gravitate to many lawyer's hidden idol - the pursuit of money and the adoration of the billable hour.  One problem of course is that law firms are very difficult to differentiate one from the other in many areas including the areas of values.  It seems to be hard to be unique (in ways which clients and staff will find compelling) when it comes to describing the firm's culture and ethos.

There is of course a world of difference between culture and values although there is a connection and overlap between the two.  One can of course take a look at different law firms and from the outside describe them variously as aggressive or dozy, sharp or cosy, arrogant or understated, flexible or rigid, hungry or complacent, and from those descriptions something can be discerned about both the firms culture and it's underlying values.  

There must be some law firms out there who have worked hard on their shared set of values,  whose ethos is reflected in every day behaviours and whose espoused values are matched by a degree of reality.  Please email me if you think that yours is such a firm. Contact the author, Nick Jarrett-Kerr

When The Atlantic publishes an article titled "The Death Spiral of America's Big Law Firms," and daily news reports from the industry's front lines seem to confirm that grim perspective, it's easy for pessimism to become your default mood. Years of irrational exuberance have given way to equally deep gloom in many law firms; that calls for a strong dose of counter-intuitive thinking on your part. 

A good illustration can be found in a recent article by Debevoise & Plimpton counsel V. Mary Abraham about legal technology (equally applicable to law firm strategy) titled "What's going right?" She reminds us that lawyers are geared by nature and training to be negatively critical, an approach shown to promote "disproportionate and destructive discontent." 

Abraham suggests an alternative approach: "Asking about what's going right can help the anxious stop obsessing about the impossible goal of perfection and start focusing on what's necessary and possible." You should consider how this sort of attitude adjustment could help your firm in these difficult times.

Unless your firm is extremely fortunate, it's probably experiencing several challenges right now, some of them serious. Even in good times, law firms have headaches; in bad times, those headaches can become migraines. But that's no reason to despair and believe that nothing's going right. Something is always going right. Start by figuring out what it is:

• Is your cash flow steady? Your realization rate above the (declining) industry average? Median profit per partner reasonably healthy?

• Do you boast some national- or world-class clients? How about some rising market stars? Are at least some of those client relationships rock-solid?

• Does your firm host some well-regarded practice or industry groups? Do they feature respected partners? Do these groups and partners play relatively nicely within the firm?

• Is your marketplace reputation clear and widely known? Do you have a good "brand" among potential recruits? Are you a "destination" firm?

• How's your infrastructure? Do you have a solid technology platform? Good time and billing capture? More than decent internal compliance behavior?

These are just a few of the questions you can ask about your own firm, and I'll wager that an honest, truly dispassionate review will provide more than a few good answers. Identify your true strengths, so that you can build on them. Great athletes don't spend time trying to bring their weakest skills up to average levels; they focus on making their best attributes even better. Take the same approach to your firm.

By all means, be realistic about your flaws and challenges. But be equally realistic about your talents and advantages, shore them up, and market them internally and externally. Now is the worst possible time to sell yourself short.

I am finding more and more small to medium sized firms talking to me about the role of a 'virtual' Finance Director. This may be a UK phenomenon caused by worries over the new mandatory position of a Compliance Officer for Finance and Administration (COFA). Firms of this size just don't have the internal resource or expertise to handle this on their own. And they certainly don't have the financial muscle to recruit someone, at least not in these challenging times.

Someone who can go in and help them for even two or three days a month is an ideal win win situation. For the firm they get some independent perspective on all manner of financial issues. For the virtual FD it makes perfect sense because they can often have two or three clients that they act for in this capacity which allows them the time to service all their clients effectively.

The virtual FD will often chair the board meetings and may even become a non-executive director. They will often have on-line access to the firm's practice management system to allow them to look at data and ask pertinent questions whenever they need to. They will produce the monthly management pack and business intelligence as this is usually outside the skill set of the Chief Cashier who quite rightly is focused on the day to day cashiering and compliance issues.

Another area that the virtual FD gets involved in is as almost a 'Systems Accountant', so the middle person between the firm and the practice management system (PMS) vendor. Often issues with reporting from the PMS are best dealt with by the virtual FD who is best placed to know what the issues are with the reporting and how to get them fixed in conjunction with the vendor.

Clearly the upcoming COFA role referred to above is an area where the virtual FD is ideally placed to add real value. Some firms are considering having the virtual FD actually be the COFA, albeit on a temporary basis. This may indeed be possible if there is some kind of employment contract in place. But I think more commonly the COFA will be either a senior partner or Chief Cashier but they will lean heavily on the virtual FD for day to day help.

It is vital that the FD has the support of the managing partner who has to sell the person to the other partners and business as a whole. It is perhaps more important still that the FD has a great working relationship with the firm's Chief Cashier. This person will often use the virtual FD as a sounding board for day to day issues. The virtual FD will also inevitably act as the 'helpline' when the Chief Cashier is away from the office.

I think for all the reasons above, particularly around the new compliance issues, we will see more and more virtual FDs working for small to medium sized firms. Just think of the Professional Indemnity saving when the insurer sees that the firm has a qualified accountant involved with the firm advising them on day to day issues, many of which will have a risk factor of some degree.