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The Marketer's Guide to Law Firms - How to Build Bridges Between Fee Earners and Fee Burners in Your Firm
2: Law firm structure
So, you’re a marketer and you’ve just landed a role in a law firm
If you’re a marketer or business development professional who has just accepted a job in a law firm, you may feel like you have arrived in an unfamiliar world. If so, don’t be alarmed, because you’re not alone. We’re pretty sure that just about every non-lawyer who has ever entered a law firm has felt the same way.
Interestingly, this feeling of inhabiting an alien world will probably apply whether you’ve accepted this new role in London, New York, Toronto or Sydney.
This is because, unless you’ve arrived in a funky NewLaw firm that aims to change the way law is practised and has embraced a flat business structure where everyone is equal, you will find yourself living in a world defined by hierarchy and a rigid binary distinction between fee earners and non-fee earners (sometimes referred to in firms as ‘fee burners’).
If your role as a marketer or business development professional involves implementing a digital marketing strategy, you may find yourself wondering how you’re going to do your job in this rather conservative environment.
To navigate the law firm you are working in, it will help if you understand how it is structured.
Most law firms are partnerships
Whether you are talking about the UK, the US or Australia, you will find that most law firms still use the business model they used 100 years ago – that is, a partnership. In the UK, most firms are limited liability partnerships but they still have the characteristics of a conventional partnership, especially in terms of how power is allocated and the way in which decisions are made.
A law firm partnership is unlike any other corporate structure. We believe the best way to grasp it is to think back to the medieval period, because most law firm partnerships have characteristics that could be described as feudal. By this, we mean that legal partnerships are structured like a pyramid and the people who work within this structure have a very clearly defined status, based on their role within the organisation.
The managing partner
In a legal partnership, the managing partner is the king or queen and sits at the top of the law firm pyramid.
As a marketer working in a law firm, you need to realise that this is a tough gig for a number of reasons. First, many lawyers who end up in managing partner roles have no training in management, leadership or finance. Instead, the reputation that has catapulted them into this role is based on their skills as a practising lawyer. Second, a managing partner never knows when their fellow partners may decide to replace them. A managing partner doesn’t get to keep partners at a distance in the same way that a CEO or a chair of a board of a large, publicly listed company can keep shareholders at a distance. Instead, partners sit in the business and watch every move the managing partner makes.
At the same time, power is not necessarily evenly distributed among the partners in a law firm. For example, you may encounter a firm where power is centralised around senior management and the managing partner. You may even come across a situation where the managing partner is widely despised by the partnership but, to your surprise, you also discover that if the managing partner is on board with an idea, it will be implemented.
On the whole, however, managing partners are under constant pressure to keep their fellow partners happy. This usually means ensuring a never-ending supply of gold coins flows into their pockets. It isn’t an unreasonable demand. After all, most partners have families and mortgages. At the same time, law firms have significant overheads (that is, an expensive castle to maintain). This tension between the desires of partners and the need to invest in the firm can cause problems for managing partners. For example, a managing partner may want to invest some of the firm’s profits back into the business, so it can expand or so as to make significant changes. This may ruffle the feathers of their fellow equity partners, especially if it is likely to reduce their share of the firm’s profits.
From the point of view of a marketer, this may mean that your managing partner keeps a close and careful watch on the marketing department’s budget.
Managing partners face other challenges. The demand for legal services tends to fluctuate depending on whether the economy is expanding or shrinking. When the economy is growing, corporate does well. When times are tough, corporate slows and the litigators are busy. In a sense, law firms are always at the mercy of the market. In recent years, clients have become less willing simply to pay lawyers whatever they demand for their services. Clients now feel that they have the right to negotiate, and are less willing to accept the billable hour as the unit through which they are charged for work.
All in all, most managing partners sitting in more conventional firms find themselves constantly juggling the needs of the business with the pressure to maintain their fellow partners’ bank balances. It can be tricky to manage these competing interests.
If we return to the feudal analogy, the partners in a law firm are the equivalent of aristocrats and sit at the next layer down in the pyramid.
While partners in law firms are business partners, they don’t necessarily like or trust each other.
The harsh reality is that law firms around the world are full of partners who have never spoken to each other and never will. Quite often, the gap between the highest- and lowest-earning members of a partnership is vast. Many partners start life as salaried partners, and will only be made equity partners if they meet or exceed budget. In addition, many partners find themselves in direct competition for business with the other partners in their own firm. When client business continues to shrink, the growing threat of de-equitisation hangs over every partner (with the exception of those within the inner circle of management). A large number of firms periodically undergo ‘clean-outs’ that resemble totalitarian purges. In short, life in a law firm isn’t just the fat cats sitting around licking the cream.
As a marketer, the first thing you may notice about your law firm is that most partners have an autocratic management style that is all about issuing commands and having control.
Jil Toovey is Director of IKD and has spent nearly 20 years helping lawyers develop their leadership skills. We spoke to Jil because we knew she could help us unravel some of the structural and cultural problems that were challenging marketers in law firms, and preventing the firms from developing firm-wide marketing strategies and adapting to the digital era.
Jil explained to us that lawyers are generally under significant pressure to get work to clients promptly. The drive to get results and deliver to clients can mean that, as professionals, they have strong controlling tendencies. The problem with the controlling style of management is that ‘if you are controlling someone, you can’t actually connect with them’. In short, the task takes precedence over the relationship.
Jil went on to describe the case of one partner she worked with, the results of whose 360 review showed that he was perceived as being very controlling. She asked him to think back to a situation where he was really under the pump and getting work out the door. She then asked him to describe how he interacted with his team. The partner explained that he was simply pushing the work out. Jil asked him about the lawyers coming into his office, what their names were and how they were coping. The partner reflected on the question for some time and then said that the lawyers were ‘faceless, like shadows’. He then said that he had no idea what the lawyers felt about the work because, at that moment, he was in machine mode.
We also spoke to Avril Henry, an internationally acclaimed expert in transforming leadership. With a background in information technology (IT), human resources (HR) and change management in South Africa, Australia, the UK and the US, Avril has worked in-house in both the legal and banking sectors. More recently, she’s been widely acclaimed for her work in achieving a change in leadership style and culture in the Australian Army. We knew she would be able to throw still more light on the question of leadership in law firms.
Avril confirmed that law firms operate on a command-and-control style of leadership. In her time with law firms, she conducted dozens and dozens of coaching sessions with both partners and lawyers. She told us that:
Those sessions showed that the vast majority of partners had the following traits. First, they didn’t listen because they were too busy telling. Second, they had no interest in how other people saw them. Third, they were verbally aggressive.
She went on to explain that, ‘The command-and-control style of leadership is based on fear and intimidation. It doesn’t get the best out of people, because they usually respond by shutting down.’
The lawyers: the fee earners
The lawyers, or fee earners, in a law firm are like the tradespeople or merchants in a feudal society. Most are hoping that, one day, they will be rewarded for their hard work with an aristocratic title (or welcomed into the partnership). The lawyers sit in the middle of the law firm pyramid. They have more privileges than those below them because...