Allow your firm's culture to change
As power in your law firm changes generational hands, the firm's culture naturally evolves. That's fine, so long as you identify and preserve your firm's human, professional, and societal core values.
On those rare occasions when a law firm asks me to help them sort out their partner compensation, I quickly route the call out to a specialist, for a couple of reasons. One is that I neither know nor care much about how the owners of a business divide its proceeds, and anyway, I think distributing 100% of your profits to your shareholders every year is kind of dumb.
But the other reason is that partner compensation can get ugly fast. Deciding who deserves how much, and why, exposes all the resentments, jealousies, and bruised egos that run like fault lines through a partnership. David Maister once described his repeated attempts to advise a law firm on this topic, until finally the managing partner said, “David, all your recommendations are based on the assumption that we trust each other and trust our compensation committee. We don’t. Give us a system that doesn’t require us to trust each other!”
That’s why I eventually came to describe partner compensation as the “third rail” of law firm management: It’s a live wire carrying a lethal current, so touch it at your own peril. Partner compensation is the rawest nerve in the law firm — or so I used to think.
Today, as the wheel of demographics grinds relentlessly through law firms, I’d award the Third Rail title to “culture.” Like partner comp, addressing culture in a law firm can aggravate existing stress fractures. But the cross-generational battles over culture now breaking out in law firms are more acrimonious, because the combatants often view the struggle as a “culture war” in which their personal values must be defended.
This is the wrong way to look at it. It’s not personal; it’s professional. It’s not about the values of you vs. me, one generation vs. another. It’s about knowing and advancing the human, professional and societal values that lie at the heart of the firm.
Culture is an inescapable topic on my visits to law firms. I hear older partners (and I don’t just mean septuagenarians, I also mean Gen-Xers my age or younger) get deeply agitated as they talk about how “this generation” (anyone 40 or under) doesn’t respect the firm’s culture. When I carefully inquire what culture means to them, they often talk proudly about their willingness to work hard, to show complete commitment to the firm, and to do whatever it takes to meet the client’s needs.
When I talk to the younger lawyers, however, they often tell me that those are the precise qualities they dislike about law firm culture. They don’t want to commit themselves completely to the firm, and they think it’s kind of sad and weird that anyone would. They want to work as long and hard as they need to, not as long and hard as they can — they don’t consider endurance a virtue in and of itself. And they don’t automatically assume the client is worthy of their best efforts.
I wrote at length about these and other differences last summer. But the specifics of the disagreements are less important than what they represent: a full-scale changing of the leadership guard. Millennials already outnumber Boomers in law firms, and their lead is growing every day. It’s entirely natural that as one generation replaces another within an organization, its preferences and priorities come to replace those of the incumbent cohort, building a new framework for making decisions and regulating behaviours within the firm.
This is entirely normal. But it’s also really hard — not just for the older generation that feels its long-time influence dwindling and its cherished standards disdained, but also for the younger generation that’s still unsure of itself and still unready (as all new leaders are) for the complex challenges of wielding power. And it’s a process law firms haven’t had to go through in almost 40 years, so hardly anyone knows or remembers how to manage it.
In my consultations with and presentations to law firms, I always turn (cautiously) to this subject of culture, because it can’t be ignored or glossed over. But nor does it do any good to ignite conflagrations across generations. My advice to firms instead is to understand that their “culture” isn’t something sacred and irreplaceable that must be defended at all costs. That’s an impossible objective anyway. They should instead focus attention on identifying, preserving, and promoting their firm’s core values.
Law firms get into trouble when their dominant generation mistakes its habits, preferences, and priorities for the firm’s core values. “Putting in long hours,” for example, is not a value — it’s a choice about how to get work done when constrained by technological limitations, as well as a means by which desirable ends can be achieved (the client gets what it paid for while onlookers are impressed by the lawyer’s work ethic).
Similarly, “showing up to the office every day” isn’t a core value — it’s a longstanding custom borne of traditional limitations on how people can get work done. “Paying your dues” isn’t a core value, it’s a rite of passage with roots dating back to the 14th century that represents the price of admission to a position of influence charged by those who already occupy it.
I’ve previously argued that a law firm’s culture is simply an outcome or a result — “the daily manifestation of the firm’s explicit performance expectations and its implicit behavioural norms.” Those norms and expectations develop over years of decisions made by the firm’s leaders, decisions driven by the leaders’ habits, preferences, and priorities. As the firm’s leaders change, those preferences and priorities will also change — and eventually, so will the culture.
This is the important point: Culture is supposed to change. Not just in law firms, in everything. The culture of our society is different today than it was in 2004, which was different than in 1984, 1964, 1944, and so on. You’re free to decide if today’s culture is better or worse than it was in 2004 or 1964, and in what ways. But it’s not the same, and it couldn’t possibly be. Culture changes because the world changes, and people change along with it.
The world is changing now in ways that blow my mind daily, and probably yours too. I feel like I’m under constant assault from all the challenges to what I thought was normal. For refuge from that assault and to reorient myself in a very different world, I go back to my core personal values to figure out what really matters to me, and why.
And that’s what I think law firms need to do. Move past your familiar practices, dig deeper than your old habits, and ask yourself: What does this firm stand for? What one thing truly matters to us more than any other? What comes a close second or a very near third? Which principles direct us, which standards are resolute, which ideals actually mean something real? What are the human, professional, and societal values that make us who and what we are?
This is not a vanity exercise. As I constantly remind lawyers, a law firm is not a hair salon or a pizza parlour or any other perfectly fine establishment. It’s a professional business delivering an essential public service by advancing people’s legal rights and defending their legal interests, bound by unique ethical rules and measured against universal moral expectations.
Core values do not depend on which generation happens to be running the show at any given time. Values outlive culture. You should allow your firm’s culture to shift and ripple and flow as times change and its people change. Just make sure that that culture — and its associated norms and behaviours — is rooted in and connects back to the human, professional, and societal values at the firm’s core.
Cultural change is well underway in law firms everywhere, enormous and irreversible. My advice to law firm leaders is to empathize with the challenges facing both the outgoing and incoming cohorts — but also to focus on identifying and promoting those values that will remain steadfast even as generational preferences evolve.
Core values unify, focus, and inspire an organization. What, precisely, are yours?
Jordan — right on target, especially with regard to your insightful observation that habits aren’t principles — these are not core beliefs. They are, however, behaviors that should reflect those core beliefs. Most firms, indeed most enterprises talk about “their culture” but they really cannot define that culture. They may point to a list of nouns they call “values” such as “integrity”, “excellence”, “quality” and “people” — but absent a definition of what these words really mean in the context of the enterprise, they are just words — just corporatist pablum. No, the values must be defined with specificity and clarity. They must be pressure tested for both comprehension and deep collective consensus — otherwise they are not truly shared, not truly embraced by all. Once defined, they must be deployed and further tested by identification of behaviors that are consistent with the values, and required through demonstration — by actually walking the talk. But behaviors that are inconsistent must also be identified and rigorously deployed to ensure that the inconsistent behaviors are not tolerated. These deviations must be addressed either through changed behavior or those that exhibit the inconsistent behaviors must be exited. As so often is the case, the rain-maker’s abusive and selfish behavior towards others is tolerated due to the need for continued precipitation — even though that behavior is inconsistent with lofty incantations about the importance of people, collaboration and the collective. Indeed, if tolerated, the only true principles are “results” & “compensation” — in other words performance to revenue, to PPP, to weirdly contrarian law-firm concepts of leverage — but not to any other salient metric regarding people. As such, the culture is not about people — except insofar as people are the instrumentality to create and bill hours of activity to produce revenue.
But these concepts can be reconciled — and I would argue that culture does not, indeed should not change. If you have a principle-driven enterprise, the culture should, indeed must reflect those principles. Behaviors, however, can change — because as you point out, these aren’t principles — they are habits, activities. Review of the principles, the core values, should take place regularly — but not to change them, rather to validate and reinforce that these are the things the team, the enterprise, truly believes. That these are what all team members commits to and willingly embrace — not by words, but by action. This review by both necessity and practicality also involves a deep review of the behaviors associated with the principles. This is a regular inquiry into “If we truly believe A, then we always do this and never that.” These behaviors can and should be clarified and, at times, modified and even redefined or replaced. Behaviors previously consistent with implementation of the principle might no longer be appropriate given technology, focus, practicality or simply changed circumstances. An easy contemporary example is that if a team value is “collaboration”, an associated behavior was once required office face time and in office hours. This perhaps was because our experience taught that other tools such as email, telephones and 1st gen cloud-based “collaboration platforms” were insufficient substitutes for that in-person experience. It was hard to build trust or have an “ah ha” moment when there wasn’t a water cooler available for casual interactions. If COVID taught us nothing else, it taught us that where one works has little to do with teaming and that today effective platforms can replace the brick and mortar water cooler host facility that’s no longer necessary. And that change happened almost overnight — those once sacrosanct behaviors were jettisoned immediately because they were simply no longer available. The principle of teamwork and contribution didn’t change — it was the behavior associated with location that changed.
This is precisely why in the teams I’ve formed and run, we did the hard work of defining our principles — our beliefs — and then the associated behaviors. We then, and only then, considered the tools we used to achieve our objectives based on those principles and consistent with the required behaviors. Each year we did a PRT Review (Principles | Rules |Tools) and we invariably found that our principles changed little if at all. Our rules, our behaviors, changed from time to time to reflect what we learned about our principles and what we had to do to maintain those principles. Our tools, well, now those changed quite a bit due to effectiveness, efficiency and experience. In other words, our tools holistically reflected our principle core value of Delivered Value.
So I agree, cuture is what matters — but I disagree that it changes and evolves. No, it’s the behaviors consistent with those principles are can, should and indeed must change and evolve.