Best Practice Tips: Law Firm Strategic Planning – Culture as an Essential Ingredient
Asked and Answered
By John W. Olmstead, MBA, Ph.D, CMC
Q. Our firm is a 12-attorney firm – eight partners and four associates – in Phoenix. It was founded by the current partners 20 years ago. We are an eat-what-you-kill firm – partners receive their fees, overhead is allocated, and their compensation is their individual profit. While we have an administrator who handles the day-to-day management of our operations, we have done a poor job of long-term management and planning. One of our partners has suggested that we develop a strategic plan. However, I believe this would be difficult for us given that we never meet, have different ideas about our future, have never been able to agree on any major decisions, are unwilling to be accountable to each other, and have a general attitude of mistrust. I do not believe we even have a firm culture. In essence we are eight separate practices operating under the guise of a partnership. Your comments are most welcomed.
A. It is very hard for partners in an eat-what-you-kill firm to come together and implement a strategic plan when the partners have no common values, goals, or objectives. Eat-what-you-kill firms more often than not have no culture at all. The three components that are linked and reinforce each other are strategy, compensation, and culture.
Culture is the outcome of how people relate to each other in a law firm. It thrives on cooperation and friendship, and defines the firm’s sense of community. Culture is the glue that holds a firm together and is built on shared interest and mutual obligation. A firm’s culture boosts a firm’s identity as a unified organization and prevents disintegration and decentralization. Without a common culture, a firm lacks values, direction, and purpose.
Your firm is a fragmented or confederation culture, and as such, you will find it difficult to even start the strategic planning process unless you are willing to change. You might want to spend some time addressing the question of whether you want to continue operating as lone rangers or become a firm-first law firm. This will require that the partners give up some independence and be accountable to each other.
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John W. Olmstead, MBA, Ph.D, CMC, (www.olmsteadassoc.com) is a past chair and member of the ISBA Standing Committee on Law Office Management and Economics and author of The Lawyers Guide to Succession Planning published by the ABA. For more information on law office management please direct questions to the ISBA listserver, which John and other committee members review, or view archived copies of The Bottom Line Newsletters. Contact John at jolmstead@olmsteadassoc.com.