Practice Tips

by Dave Bilinsky, Practice Management Advisor

 musical note We like our fun and we never fight
You can't dance and stay uptight
It's a supernatural delight
Everybody was dancin' in the moonlight musical note

Words and music by Sherman Kelly, recorded by King Harvest

Is there leadership in your law firm?

At the time of writing this column, one of the pre-eminent national US law firms, Brobeck, Phleger & Harrison, had just announced its demise. This firm was renowned as a legal adviser to the technology world (ABA Journal e-Report, February 7, 2003). At its height, Brobeck had over 1,000 lawyers and registered the highest per-partner profit for any corporate law firm outside New York: $1.17 million for some 200 partners (San Francisco Business Times, October 18, 2001).

The growth of Brobeck has been attributed to Board Chair Tower Snow's stated strategic vision of being the dominant law firm in the world representing high technology and new economy companies (BizLaw Journal, February 21, 2001).

What caused Brobeck to fail? Certainly too much debt is always a factor in a business failure; but what is interesting is the role that leadership, or perhaps the lack of it, played in the collapse.

Leadership is a difficult quality to define, as there are probably as many leadership personalities as there are leaders and their defining moments. Winston Churchill in the Battle of Britain was one type, Wayne Gretzky and the Canadian Men's Olympic Hockey Team another. Are there commonalities that we can draw on in leading our own firms?

Nancy R. Daly, in "Characteristics that Count," Association Management, January, 2003, p. 49, attempts to do just that. Here is her description of 10 leadership characteristics, applied to a law firm setting:

1. Trust

Leaders must be seen to possess integrity, and to be business-like, honest, and respectful. Moreover, the trust must be two-way - the leaders must be able to trust their staff and desire their feedback through active listening. Contrast this with many firms where the information flow resembles a one-way street.

2. Respect

This is a culture of collaboration that values the significance and contributions of all members of the staff. Contrast that with what is found in most law firms regarding "lawyers" versus "the rest of the staff" mentality.

3. Vision

This can be described as the trait of knowing the end destination while being flexible on the path. Leaders don't micro-manage - they keep their heads up to look for new opportunities. Contrast that with lawyers who "hover" when something needs doing rather than trusting that the work will be done and moving on to the next objective.

4. Self-confidence

This is not about appearing invulnerable or worse, arrogant. Rather this is the ability to listen to all options and, in the absence of consensus, to act decisively. Leadership is decisiveness in action. Self-confidence is the catalyst. However, compromise that is not in the true interests of the firm is not leadership, yet how many lawyers act or react from a position of self-interest?

5. Communication skills

A leader possesses above-average communication skills that can articulate a firm's objectives and make people feel like they are part of a motivated and excited team. This is equal parts sincerity, competence and understanding. One would hope that lawyers would possess above-average communication skills, and for the most part they do. However, lawyers also have a slight tendency towards advocacy - expounding a point of view, rather than listening to another point of view.

6. Enthusiasm

Passion. Energy. Commitment. An enthusiastic leader can motivate and energize people to excel - beyond what even they thought possible. Enthusiasm is not generated by fear of consequences, rather by embracing ideals.

7. Feedback

Daly speaks of leaders providing sincere praise and recognition to staff. In any business, there is a role for providing both positive feedback and negative feedback where performance may be less than stellar. Could lawyers learn to praise more and criticize less?

8. Ability to fulfil commitments

People look to a leader to walk the walk - and that means doing your homework, being as prepared, if not more so, than others around you, and in possessing one simple trait: doing what you said you would do. All the time. On time. Period.

9. A focus on growing more leaders

True leaders are not afraid to nurture, coach and grow more leaders. They challenge future leaders to take on commitments that lead to their own growth and personal development. Contrast that with many law firms where "mentoring" is handing off a file to an associate and saying when you want it done.

 


David Maister, the noted legal consultant, stated: "Without a loyal cadre of attorneys following a trusted leader, law firms are vulnerable to market downturns - particularly if they have borrowed extensively." While establishing cause-and-effect is always problematic, Brobeck's demise certainly coincided with the ouster of Tower Snow following partnership divisions, large debt accumulations and internal turmoil. The message from Brobeck's fall from grace? That vision, drive and enthusiasm is not enough - no matter what the size of a law firm, it must have a culture of cultivating well-rounded leaders to call the tune and keep the group dancing in the moonlight .

 

Practice Q & A

How do we pay GST/PST if the client will be late in paying our bill?

Question: We are about to render a large account to a client. We are concerned that it will be some time, if ever, before the account will be paid. However, we are concerned about having to pay the PST and GST without having any funds to the credit of the account. What can we do?

Answer: If you have reasonable grounds to conclude that payment of the account is questionable, you can render the account and immediately place it into the bad debt category. That will allow you to reverse the entries of the taxes payable on the account. When and if you receive payment or partial payment, you can remit the taxes on the amounts received. This avoids your being out of pocket for taxes on accounts that are yet to be paid.