What Lessons Can Law Firms Learn From the Corporate Sector?
For years now, the legal sector has been wringing its hands over the perceived flaws in lateral partner hiring as a growth strategy. Anecdotally at least, it seems that as many of the problems with lateral partner hiring result from poor integration as much as they do from poor selection processes. When it comes to people management, I have sometimes heard law firm leaders question whether there is innovation in the corporate sector that we could learn from in the legal sector. With that in mind, I wanted to understand what the corporate sector’s experience was of hiring and integrating senior executives. Could corporate teach us any lessons that we could apply to improve outcomes for law firm partners who are changing firms?
The first lesson was unexpected. It turns out that the legal sector is not alone in facing significant disappointment when it comes to hiring and integrating high-level talent: “about 40% of executives who change jobs or get promoted fail in the first 18 months”. Wow. In this context, the struggles of the legal sector reflect the experience in the corporate sector. But let’s face it, even if these poor results in the corporate sector are accurate, it does nothing to improve results in the legal sector. What it does mean, however, is that there has been meaningful research on the HR and management issues affecting executive recruiting and transition. And so it was that I took a look at the ideas of Dr. James Watkins, a professor at IMD (International Institute for Management Development) who wrote the bestseller ‘The First 90 Days: Critical Success Strategies for New Leaders at all Levels’. This article highlights some of Watkins’ thinking that we can apply to lateral partner integration.
The challenges faced by law firms in successfully hiring and integrating lateral partners reflect many of the corporate sector’s experiences with the selection and integration of executives.
The first 90 days: While by no means a perfect measure, it is commonly cited in corporate America and beyond (although it may sometimes be referred to as the first 100 days). It is a concept born in the thirties by Franklin D. Roosevelt. The received wisdom is that a new leader’s success will be dictated in large part by what he or she achieves during the initial phase of being in his or her new role. Having started with political leaders, this idea has been translated to apply to corporate executives in management positions. And since my experience has been that the actions that lateral partners take (or fail to take) in the first few months at their new law firm typically determine their success or failure, it occurred to me that, by extension, the concept of “the first 90 days” might be just as applicable to lateral partners transitioning to a new law firm.
In practice, the transition as a partner from one law firm to another is tough: it’s where the possibility and promise of opportunity meets the reality of the day-to-day. The new firm typically has high expectations of a lateral partner: It expects to access new client work and/or revenue. On the other hand, the partner’s clients expect the move to have no adverse impact on their business and legal work. And, a new lateral expects support, resources and professional (and financial) success. However, in reality, a lateral is vulnerable when he or she starts at a new firm. Laterals lack established working relationships and detailed knowledge of their firm and their place in it. A lateral has neither the institutional knowledge nor the network necessary to get things done. There’s a risk that the move may lead to clients staying with their old firm or moving their work to another firm.
To move firms successfully, a lateral needs to build and sustain momentum. However, not only is a lateral partner confronted with the need to adapt to a different business model and firm culture, but he or she must also familiarize him- or herself with a new set of management practices. Most urgent of all, a lateral needs to build a supportive network of relationships. This involves figuring out how to make the right connections, build key relationships, and create alliances as he or she navigates a new political environment.
“The biggest trap I’ve seen new leaders fall into is to believe that they will continue to be successful by doing what has made them successful in the past. There is an old saying, “To a person who has a hammer, everything looks like a nail. ””
Three Traps For New Lateral Partners To Avoid
Watkins argues that leaders who derail or under-perform in their new roles often fall into common traps in their first 90 days. Some of these traps also apply to lateral partners. Three key examples are:
1. Not adapting to the new culture
An organization’s culture is manifested by its work environment and working practices. It’s a common mistake for both sides in the equation, the firm on the one side and the lateral on the other, to assume that the acclimatization process will be straightforward. More likely than not the work environment and working practices of the new firm will be more different from those of the previous firm than expected. “Leaders who move between companies… risk stumbling into cultural minefields” says Watkins. In my experience, the same is true for many lateral partners moving between law firms. It stands to reason that when a lateral partner acts in a way that is inconsistent with his new firm’s culture, he risks triggering what Watkins describes as “an organizational immune system attack.” If this happens, the lateral may quickly become isolated and disconnected from the flow of critical information about what is really going on in the organization which increases the likelihood of missteps.
Lesson: No matter how culturally similar a candidate’s firm and the hiring firm appear to be during interview discussions, it is essential that a new lateral partner takes the time to learn, and to demonstrate that they want to understand, how the firm works.
2. Not engaging in “social learning”
“New leaders can become isolated because they spend too much time reading and thinking and not enough time meeting and talking.” Whether or not a lateral partner wants to get to “know” his or her new firm before venturing out into it, the risk is that holding back will inhibit the development of new and important relationships and the cultivation of sources of information about how things really work at the firm. If this goes on for too long, the lateral may soon be labeled as aloof, uninterested and unapproachable. Unfortunately, this can also be the case with laterals who transition active matters with them and focus all their attention on their existing clients. As important as it is to avoid disruption to client relationships and ongoing matters, a lateral needs to start connecting with his or her new colleagues as soon as possible.
Lesson: Lateral partners must get out and into their firms quickly. This involves both social and professional engagement with new colleagues. Ultimately, however, no number of lunches can replace the experience of working together on client matters, business development or firm initiatives.
3. Coming in with “the answer”
Another common trap for the lateral is to join the new firm with “the answer” (or “as the answer”). Watkins observes that a new executive should avoid assuming that any mandate negotiated before he or she took the job (or early in the role) is the whole story. This is also true for lateral partners, who often need more support from their new partners than they may think. A lateral should never assume that an initial mandate will or should remain unchanged. Firm management may intend and want one thing but other partners may well feel differently. This is compounded where management has identified the potential for change, has not socialized the prospect of change with other partners and has promises the lateral the opportunity to take charge and lead a group or initiative or otherwise change things up.
Lesson: During his or her initial transition, a lateral should clarify any explicit or implied mandate with management and, by reference to what their other partners think, assess what’s realistic and achievable and be prepared to reset management’s expectations, where appropriate. Watkins says of newcomers: “It’s also essential that they clarify and re-clarify their mandates. Why? Because overly-optimistic impressions about the new leader’s scope for action often are created during the recruiting process.”
Problems arise when incumbent partners perceive the new partner to be dealing with known challenges without due reference to previous initiatives or thinking about the issue or without honoring the previous contribution of others. This can quickly lead to incumbent partners becoming cynical which can make it difficult for the new lateral partner to rally support for change. Worse still, it may trigger resistance or the active undermining of efforts to effect change. All this may resonate with anyone who has been involved with hiring and integrating a high profile lateral who joins a firm with a mandate to manage or boost a practice.
Relationships. Relationships. Relationships.
Watkins’ advice in The First 90 Days is based on a decade of study of leadership transitions. In that time, he changed his view on what it takes to make a successful transition. While he originally believed that new leaders established themselves by putting in place the right strategies, structures, and systems, he came to believe that relationships – with superiors, peers, direct reports and external constituencies – are at the heart of any successful transition and integration. For lateral partners, this is perhaps less surprising since law is a relationship-focused profession but nonetheless, it is worth remembering that, beyond taking care of existing clients, building relationships internally within the firm is the key to achieving a successful integration.
This article is based on (and quotes in italics are from):
The 7 Biggest Traps in the First 90 Days & How to Avoid Them by Dr. Michael Watkins, author of The First 90 Days: Critical Success Strategies for New Leaders at All Levels, 2003, Harvard Business School Press. This book is a best seller for a reason and is a must-read for anyone involved with recruiting and integration.
Regarding executive “failure rates”, the specific sources were (1) a 2013 survey by CEB Inc. which reported that “only one out of five executives hired from outside are viewed as high performers at the end of their first year” and that “the 40% of leaders who are hired from outside each year, nearly half fail within the first 18 months”; (2) Anne Fisher’s Fortune article New Job? Get a Head Start Now (February 17, 2012) which notes research that concluded that “about 40% of executives who change jobs or get promoted fail in the first 18 months” and that the failure rate has “stood at about 40% for at least 15 years now.” There are however multiple articles/sources which provide similar statistics.