Posted by: johnocunningham | October 19, 2012

Best of October: What Holds Firms Together

This is my second post in a series of monthly features that I have dubbed, “Best of My Blogroll.” The concept is simple – each month I peruse my own blogroll for material I think most worthy of sharing with others, and then I report on it here.

For October, I have selected an article entitled, “Culture Keeps Firms Together in Trying Times.” This piece was written about and linked to by Steven J. Harper in his law practice blog, “The Belly of the Beast.”

The article on culture – by Peter Lattman – brings to mind a host of interesting questions about how the culture of a firm (essentially determined by its organizational mission,  world view and values) can bind its members together in ways that make it impervious to malcontents, headhunters and poachers. The article also raises questions about how compensation structures can unify or split a firm under stress, and I would add that such structures can either reward or inhibit the kind of superior client service that firms now need to prosper.

In my experience, most lawyers in most law firms give little or no thought to their culture, and they certainly do not see it as determinative of their future, despite the existence of abundant empirical evidence that culture is critically related to organizational success and sustainability (see e.g., “Built to Last” or “From Good to Great” by Stanford Professor James Collins). These lawyers think of culture as the kind of paintings you hang on the walls and the dress code you enforce at work. They have no clue what culture means, or how it is intertwined with both organizational success and the very happiness of people’s lives. They do not know and they do not care.

But they are about to learn, whether they like it or not. We have entered a period of great disruption in the legal industry, as shrinking profits and increased competition begin to test the viability of many law firms that have few or no strategic plans for keeping and growing their client base. Those law firms whose leaders comprehend the critical importance of creating a functional culture that knits clients and firm members together will survive this period of creative destruction, and they will thrive beyond their imaginations after navigating safely through the storm.

Those firms that ignore the importance of culture will either muddle through by accident or they will end up shipwrecked by obstacles they never saw or understood in the stormy seas of commercial change.

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