Do you remember how end of June 2017 business operations of Danish shipping giant AP Moller-Maersk, American pharmaceutical giant Merck, French construction giant Saint-Gobain, German consumer goods provider Beiersdorf, and many other companies were severely disrupted by an unprecedented cyber-attack? The total cost in lost revenue alone is estimated to have been well over a billion Euros. It was not only large international businesses that were affected by the notpetya malware. On 27 June 2017, the Madrid office of DLA Piper was hit first and within hours, the entire firm was locked down across the world, unable to access phones, emails and other forms of communications. 3,600 lawyers in 40 countries were affected. They were without phones and without email. The ransomware attack on DLA Piper sounded a different type of alarm for Big Law. The world’s biggest firms are just as prone to ransomware attacks as any other company, and the potential ramifications of a network-crippling malware infection are wide-ranging for a service industry that holds the legal fate of corporations in its palm. Consider litigators unable to access motions on a deadline. Trial lawyers preparing for arguments without key documents. Transactional lawyers unable to communicate with clients attempting to close multibillion-dollar deals. And of course, anxious and possibly angry clients. Perfect storm 24 March 2022, White House National Security Adviser Jake Sullivan has warned that a Russian cyberattack on a NATO ally could trigger a collective response: “We could see circumstances in which a collective response by the alliance to a cyberattack would be called by an ally,” said Sullivan. “That is absolutely something where we and other countries could bring capabilities to help a country defend itself and respond.” Sullivan made the warning a day after President Biden said that “evolving intelligence” suggests Russia is “exploring” revenge cyberattacks for the sanctions imposed on the country following its invasion of Ukraine. The possibility of cyber warfare has never been higher than it is right now. Given Russia’s reputation and track-record, the effects could be devastating. Of course no one knows what will happen. If it comes to Russian cyber-attacks, western critical infrastructure seems the most likely first target, but an orchestrated attack on businesses, or even law firms, can absolutely not be ruled out. Any state sponsored sophisticated attack is a serious risk, but it is the combination with the present hybrid (or full-time) working from home, that creates a perfect storm. All high-end law firms are expected to have state-of-the-art cyber-security systems and policies in place. The problem right now is that such high-end defense systems have been designed for the office. When lawyers (and/or assistants) are working from home, the defense is seriously compromised. Every kitchen table and every shared WIFI-point expands the surface of attack for a hacker to exploit. Structural remote communication by email, phone or Teams, increases the likelihood of clicking on an malicious link. Law firms need to be on extremely high alert! Ultimately you cannot stop it Russia is home to some of the most sophisticated hackers in the world. A state sponsored cyber-attack will exploit several zero-day vulnerabilities and will be able to bypass even some of the most high-end defense systems. Even if the attacks would be specifically targeted, there will most likely be a lot of collateral damage, due to the networks by which systems are interconnected. Law firms should not rely on their firewalls and virus-scanners. This is the time to perfect your response scenario and your contingency plan. Does everyone at the firm know what the drill is, when a cyber-attack hits? For most law firms, the answer would be “probably not”. When the cyber crisis hits, you cannot afford to lose even a millisecond of time. The action needs to be immediate and operate as a well-oiled machine. 1. Draft a cyber-attack response plan* 2. Test the plan and improve if necessary 3. Rehearse until it becomes second nature to every single employee Besides an established and well rehearsed response, a law firm also needs to have back-up and redundancy systems in place. A dual-server or a back-up server, is of little use, if they can both be down or encrypted at the same time. If email server is down, what is the alternative to communicate with clients? If all mobile phones are encrypted, is there an emergency supply of new out of the box replacements? Paper files, fax machines, a traditional landline, removable data storage, a typewriter, some of the redundancy and back-up systems will probably be antique by today’s standards. 4. Have ‘air-gaped’ back-ups of everything 5. Have redundant communications and production technology Of all these measures, having a well-rehearsed response procedure is the most important. This must include a method for immediately notifying every single employee across offices that there is a situation in which the pre-practiced plan is in operation. You need to be able to do this if potentially all communications are down. You also need to communicate with your clients. Time is running out. According to the latest military intelligence, cyber threat is imminent. I recommend that you have a critical look at your plan right now. Let’s hope you won’t need it. *At TGO Consulting we are not IT or cyber security experts. We do have expertise on all aspects of crisis communication. Making a Cyber Attack Response Plan is teamwork by nature. Our experience and expertise will have added value in such team.

We live in troubling times. The pandemic is not over yet, Russia has launched the largest and most brutal military invasion in modern history, energy prices have sky rocketed, inflation is rampant and serious food shortages have become a realistic scenario for large parts of the world. Amidst all this gloom, one could be forgiven not being aware that Tuesday 8 March was International Women Day. On the occasion, The Economist’s glass-ceiling index was published. This is their annual measure of the role and influence of women in the workforce. Being a citizen of the Netherlands, I did not find the 2022 index uplifting. The country ranked 21 out of the 29 countries represented. This despite politicians and business leaders always having their mouth full of the importance of gender equality. Parole, parole, words, empty words… Legal Industry rock bottom Fortunately the index ranks countries, not companies or industries. If industries would be ranked, the legal industry would no doubt be close to the bottom. In Europe there are by now percentage wise probably more female bus drivers, than there are female equity partners in tier-1 law firms, despite law firms advocating equal partnership opportunities for women. Parole, parole, words, empty words… Me, being a man, I probably should not enter into the social, political or ideological dimensions of this discussion. This article will focus on the business aspect: law firms, in order to excel, need to retain the best possible talent. Statistically, 50% of that talent has to be female. Any law firm that does not have close to 50% female equity partners, is missing out on talent opportunities. Let’s examine where the alleged efforts to appoint more female equity partners do derail. Different rewards Recently I had a conversation with a highly successful litigation partner. While he had always had a majority of women in his team, he had never made a female partner. He praised the female lawyers in his team for their diligence and reliability. He told me how, on many occasions a female associate had spotted an omission or mistake that he himself had missed. To him, in his mind, the female lawyers in his team were crucial. He could not imagine having to run his practice without them. And yet, during the two decades that he was now a partner, he had never promoted a woman, but he did promote two men. Women were just Santa’s little helpers. Indispensable, but never eligible to be the next Santa. The issue here is that male and female lawyers are each rewarded for entirely different skills. Male lawyers are encouraged to be bold, outgoing, outspoken and take risk. They are forgiven for sometimes being a bit sloppy. Female lawyers on the other hand, are rewarded for being diligent and precise. Women that are brash or outspoken are disliked. Women are supposed to act nice, be social and serve. This sets women up for failure if it comes to future partnership. During their time as an associate, they are rewarded for exactly the opposite of what makes a good partner. Men on the other hand are rewarded on future partner characteristics and are forgiven if they are not a model-associate. Perhaps female partners are women’s worst enemies? During the run-off to the last US elections, I watched a TV program that asked ordinary Americans for which of the two candidates they intended to vote. Surprisingly immigrants who made it to middle-class were overwhelmingly supporting Trump, who is openly anti-immigrant. Apparently if you have had to struggle and fight to make it yourself, you less inclined to support others getting the same for free. In that same spirit of thinking, female partners do typically not promote new female partners. Female partners tend to raise the bar for women to become partner even higher than their male fellows. Maybe this is in part because they don’t like competition? Being one of the few female partners makes you a bit special. Once the number of female partners would start to grow, that special status would fade. Women prefer to stay at home One of our friends, let’s call him Anthony, is a partner at one of the elite law firms in his country. He is a modern man and certainly not sexist or anti-feminist. When it comes to women becoming partner in his firm, he feels a bit sad and disillusioned. He tells me he has had so many conversations with talented female associates, trying to convince them to apply for partnership. The women he talks to, in his mind, all indicate that they rather be at home with the children, than trying to become a partner at the firm. The problem here is that Anthony, hears what he expects to hear. Perhaps the women he speaks with even tell him what they feel it is what they are supposed to say, think and do anyway. All this of course makes no sense. Raising and looking after children is not the exclusive domain or responsibility of women. In any divorce, men want equal rights to the children. So if men expect equal rights when the relationship ends, why wouldn’t they have equal rights and responsibilities while it lasts? Often the partners in a law firm portrait partnership as an all-consuming occupation. Partnership implies the will to sacrifice everything private: it will ruin your relationships, you will have to return early or depart late for holidays, and you will not see your children grow up. Painting such caricature will scare away anyone in his/her right mind, so don’t blame it on the women. We need to drastically adjust the image of partnership. Being a partner must become an appealing proposition, not an invitation to hell. Stop talking, take action When I saw the poor position of Netherlands in The Economist’s index, I wrote in an article that the ambition should be, to next year at least have a score above the OECD average. Words alone will do nothing the help achieve this. Only action counts. Law firms, I would encourage to set hard targets for increasing the percentage of female equity partners. You may have noticed that I consequently mention ‘equity’ when it comes to partnership. I am of course aware that it is in fashion to appoint women as salaried partners. While this beefs up the numbers towards the outside world, it is ultimately even more insulting than not appointing female partners at all. It is time to start acting and stop talking. Law firms cannot afford to lose 50% of the best talent. Read more in an outstanding article by Lisa Hakanson: Diversity, a hard nut to crack *"Parole parole" (transl. "Words words") is a duet song originally performed by Italian singer Mina -pictured above- and actor Alberto Lupo. It was released in April 1972. In 1973, Dalida and Alain Delon recorded the song in French as "Paroles, paroles", that became an international hit and a classic in France. My father used to love this song, and I remember it as a child.

Let me first explain the picture above the article. The photo depicts not just a random armed fighter. The person photographed is the Right Honorable Mr. Ivan Mishchenko, who is a judge at the Supreme Court of Ukraine. The translated text above the article in which this photo originally appeared reads: "It doesn't matter who's a lawyer, who's a prosecutor, who's a judge — we're all united." Monologue of the Supreme Court judge who took the machine gun” The article was published on 5 March. A lawyer I know, who also knows Mr. Mishchenko personally, has assured me that this photo is real. Bye bye Russia Over the past week there has been an exodus of western companies out of Russia. Each and every day we have seen new announcements of companies producing and/or selling consumer goods, which are not only closing their operations in Russia, but also stop selling through independent outlets. Apple, McDonalds, IKEA, Shell, Disney, Hennes & Maurits, Adidas and General Motors, the list goes on. Since the invasion on February 24, more than 300 companies (and counting) have halted Russian operations, far exceeding the 200 big companies that quit South Africa over Apartheid in the 1980s. Doubt in my mind Last week, I published an article ‘Moral Duty’ in which I advocated boycotting all companies and individuals that have direct or indirect ties to Russia. Seeing the above picture of Ivan Mishchenko has made me reflect on my point of view. First and foremost, the picture is a stark reminder that this war is not fought from behind a desk, but on the ground while risking real peoples’ lives. Mr. Mishchenko is not writing opinionated articles. Maybe what I am doing is too easy, I don’t know? Secondly, some of the companies that are now rushing out of the Russian market, do this because of the public pressure. There is an outraged and angry mob of media and consumers that demand that companies abandon everything Russian. There is little or no room for nuance. Right now it is black or white. This polarization is as such not new. It has been growing since Trump and been manifest also during Covid times. Thirdly there is the question if economic pressure will have any favorable effect. There is actually little or no historic evidence indicating it will. In all recent examples where strong international economic sanctions have been imposed, the real world effects have been quite the opposite. North Korea, Iran, Venezuela and Cuba for example have all hardened their positions and their regimes have not been overthrown. Fidel Castro remained in power until he was eventually succeeded by his brother. Why would things be different when it comes to Russia? How likely is it that because of the sanctions and boycotts, Mr Putin will be forced out and replaced by a nice pro-western anti-authoritarian successor? Perhaps the sanctions and boycotts will only make the Russian population suffer and make them more nationalistic and anti-west? What about the legal industry? In last week’s article I have shared with you part of the conversations I had had with a number of our clients regarding their interests in Russia/Russian clients. My point of view at that point in time was that it would be best to terminate all their direct and indirect Russia related business. Drawing parallels with Nazi-Germany, there was a strong emotional feeling not wanting to end up on the wrong side of history. Any lawyer who back then would have legally represented either the German State or companies such as IG Farben or Krupp, would have been held accountable after the war. The question for me today is, where does this moral responsibility end? There will be little doubt that western lawyers should steer clear of representing the Russian State or any of its entities. Also Russian state-owned or state-controlled companies are a no-no, as are persons and entities that are on the sanctions list. Then comes a large gray area. Let me give an example: individuals that are on the sanctions list, do own properties in the west. The problem is that these properties will not be in their name, but will be owned by a company or other investment vehicle instead. The ultimate beneficiary owner will most likely be invisible through a network of companies located all over the world. So if the property is seized and the legitimacy of this action is contested in court, should a law firm take that client? Calibrating our moral compass The present situation is equally terrifying as it is confusing. We don’t live in a clear cut world, where the good guy wears a white hat and the bad guy always a black one. The only way to navigate these troublesome times is by keeping an open mind and taking into account different opinions and points of view. Our moral compass needs frequent recalibration. This can only be done through discussion and exchange. At the same time this should never be used as an excuse for not taking a moral stance. There is a real war going on, and we need to pick sides! Not taking a position and just accept the money will never be defendable. One of the challenges is that we live in times where in the public opinion there is no tolerance for nuance. This is one of the main triggers for the corporate exodus from Russia. Let’s once again look at that picture of Mr. Mishchenko, before we either turn a blind eye because we serve mammon, or claim the moral high ground from the safety behind our desks. It is a strong reminder that this is very much a war of bullets and bombs, and not of hollow words. I’m afraid I do not have a clear cut answer, but I am happy to contribute to a discussion at any time. Please don’t hesitate to reach out! PLEASE SHARE THIS ARTICLE IN YOUR NETWORK (Update: on 10 March 2022 I have been directly in contact with Mr. Mishchenko, who authorized the use of his name and picture for this article)

According to schedule, I did not publish an article last Friday. In hindsight, I’m glad I didn’t. Whatever the topic, it would have been irrelevant at that point in time. Friday 25 February 2022, the world watched in horror as an incredibly large old school invasion force descended upon Ukraine. Marking a pivotal moment in world history, not seen since the first of September 1939. Aggressive use of military force is back in style. The “rules-based international order” just took a direct hit. Dreams of world-peace are shattered. I felt shell-chocked. Despite the horrendous events, over the weekend the first glimmers of hope appeared. The world seemed to become more and more united by the hour. Initially it was governments getting univocal in condemning the war and announcing or increasing sanctions, even if it could hurt their home economies. Soon commercial businesses joined, closing operations in Russia, terminating joint ventures, withdrawing products and product support for their Russian customers. Even Russian performing artists, athletes and sports teams, are now subject to a global boycott. It is heartwarming to see that, despite our differences, when push comes to shove, we stand united. It is realistically the only way to gain some leverage on the superpower the Russian Federation is. The Legal Industry With the Covid scenarios still fresh in memory, the legal industry initially focused on sanctions, the most apparent legal aspect of the Ukraine invasion. Overnight newsletters were compiled and client briefings got organized. During the weekend however, this started to change and my phone started ringing. The last couple of days, since Sunday late afternoon, we have been in constant conversation with some of our clients seeking consultation on what to do with their Russian clients. The fact that we were part of multiple discussions proved to be immensely helpful in quickly establishing ‘best practice’ Let’s face it. Many ‘business law firms’ all over the world are doing business with clients that have direct and indirect ties with Russia. Those clients are not on any sanctions list and every organization or individual has a right to legal representation. Business Law Firms, by nature are a-political and do not take a moral stance. There are also strict bar-regulations preventing a lawyer to just drop a client. But this time it is different and most of us do not want to end up on the wrong side of history. Based on the conversations we have had with some of our clients, I know that there have been heated discussions within partnerships. Some partners took the strictly legal point of view: it is not against the law to represent Russian clients and they are entitled to a lawyer. Others primarily feared the financial impact, as Russian clients accounted for a substantial part of the firm’s revenue. At the other side of the table were those partners that feared reputational damage if the firm would continue to represent Russian clients. And then there were those who literally said they would quit if their firm would not act. Tough decisions had to be made and there was an immense pressure of time. Law firms must act and choose sides now. "Most of us do not want to end-up on the wrong side of history" At the time of writing, without exception, the clients we have advised throughout this process, have decided to terminate all their direct and indirect Russia related business. These are incredibly difficult decisions to make. It is not that the Russian clients are the enemy. In most cases these are longstanding loyal clients. On a personal level this are people we know, like and respect. Unfortunately all this is ultimately irrelevant. On the brink of World War 3, it is our moral duty to stand united. We have no choice but to act and we owe it to our children and our grandchildren. If you still have not made up your mind, I urge you to do so right now. What happens next? “Prediction is very difficult, especially if it's about the future!” (Niels Bohr 1885-1962). I certainly do not have a crystal ball, and I must admit that I did not foresee that we would end up in the mess in which we are right now. With that caveat, I could imagine several scenarios how this all would end. In my mind most of these scenarios do not end well, and the one that does, seems highly unlikely. I read in an article that Putin used to tell how as a child in Leningrad, he and his friends used to chase rats with sticks and loud noises. At one time a huge rat that they corned against a wall, suddenly attacked Putin fiercely, leaving the young boy injured. Perhaps today Putin is that rat. Now that he has maneuvered himself in this situation, what is his endgame? Putin does not strike me as the sort of person that handles defeat or losing face well. Even if he manages to win the war he will be an outcast like Kim Jung Un for the rest of his days. Russia will remain isolated behind a new iron curtain. The only favorable way out of this mess does not include Putin. A change of leadership in Russia is probably the only positive scenario from here on. This is unlikely to happen and if it happens it should happen from within Russia. Standing persistently united as a world in boycotting everything Russian is the most important thing we must do to help trigger such event. On the short term such actions will hurt us in equal amounts as it will the Russian people. I’m afraid this is a hardship that we owe to future generations. Please do not give up nor give in! PLEASE SHARE THIS ARTICLE IN YOUR NETWORK!

Ask a lawyer how he’s doing and the answer will probably be that he is super busy. Being a lawyer, he/she is probably really swamped with work, but it is not only lawyers who state they are busy. Random ask anyone working in an office and they will all tell you busy they are. Being busy has become a status symbol for the white collar worker. Few are willing to admit that they are working at a leisurely pace (while many do). People perceive social pressure to always be busy. If you are busy, you are seen as successful and important. This as such is in itself surprising. For centuries the high and mighty carefully kept an image of doing absolutely nothing. For anecdotal evidence look at the acclaimed tv series Downton Abbey. The lord-of-the-manor’s main occupation is getting dressed, first for the day and later for dinner. Being occupied with work was something for lower class. Much more recently, when I entered the legal profession in the nineteen-nineties, work at an elite law firm was at a quite relaxed pace. There was one of our more senior partners who used to go out for a copious lunch and then take a nap. He even had a daybed for that in his office. It is relevant to mention that this partner had a very large and booming telecom practice, so he certainly wasn’t lacking work. What changed over the last three decades? While for ‘blue collar workers’ it is relatively straightforward to show productivity, for office workers it is not. Office work has always had connotations of bureaucracy and inefficiency. Towards the end of the last century, large corporations started to implement large scale reorganizations in an attempt to streamline their organizational structure. Slimming down their huge head offices was typically the first thing leaders like Jack Welsh (General Electric) and Jan Timmer (Philips electronics) did. Suddenly a desk job was not a cushy job anymore. Fearing redundancy, everyone in offices around the world started to act as if terribly busy all the time. The 2008 financial crisis provided extra fuel for this behavior, as did the work-from-home during the current pandemic. Being busy is not a badge of honor, and it also is not an effective job-protection mechanism. Being forever ‘busy’ is actually stupid and harmful. Let me explain why I think we need to change our default attitude if it comes to workload. Why we should aim to work less but smarter instead of forever more. 1 - Workload is an addiction In recent times, people have started to strongly identify with their job. The question “what do you do for a living” is invariably one of the first that pops-up when we meet someone for the first time. Our ‘being’ is in what we do. Descartes in 1637 famously stated “cogito ergo sum” (I think and therefor I am). Today’s Descartes would probably have said “laboro ergo sum”, I work and therefor I am). While no one can take away our thinking, they can take away our job. This imposes a big problem if the identity and the job get intertwined. No job, no identity. For partners in law firms, profession and identity perhaps are more overlapping, than for any other profession. Being involved in high level matters creates a strong sense of self-esteem and purpose. If I work on high-profile matters and clients, I must be a highly valued person myself. Abuse of alcohol and drugs by lawyers is typically not triggered by the necessity to work instead of sleep, but by the need to feel ‘on top of the world’ all the time. 2 - Workload is harming the business Let’s focus on the profit driver for law firms for a moment. The main source of income is not the partners, but the associates. The mark-up or profit-margin on the vast army of associates is the most important contribution to partner compensation. Without the associates, partner income could drop by 50%. Knowing this, the smart thing for any partner would be to keep as many associates working as possible. Any partner spending too many hours working on client matters is actually hurting the business. Partners should spend most of their time finding new clients and mandates, and to train and mentor their associates so they are capable to deal with the matters. Keep the pipe-line filled. Perhaps it is indeed more profitable to have copious lunches and a nap, than it is to make insane billable hours. Obviously there is a conflict with bullet-1 above. 3 - Workload is poor time-management As a partner in a law firm, you are working on several clients and multiple matters all the time. Each of which will have its own unpredictable dynamics. All things lawyers work on are also time sensitive. Keeping all the balls up in the air without dropping one is no mean feat. It requires what we call ‘3 dimensional time thinking’ to do it well. Most lawyers do not have this ability to ‘virtual project manage’. Lawyers have a poor concept of how long things take to complete and of how different task are interdependent. The result is a permanent state of chaos and stress. Many partners have a feeling of always running behind the facts. It is exactly this that creates mental health issues, burn-out and broken marriages. It doesn’t need to be like this. A bit of training and education can bring instant relief, if only these lawyers were not too busy for training/development. Smart lawyers work less There you have it. There is no virtue or merit in working a lot. There should be no status in it either. Partners are well advised to work less on client matters and spent more time on client development, training and mentoring. Partners are also well advised to develop some hobbies and interests. This not only helps to take the mind off work, but it will also make them a more interesting person, which in turn will help develop new business. So remember the main take-away: workload is not a badge of honor. On the contrary.

I have a friend who is the CEO and owner of a multinational company. Now in his early seventies, his company has over 1 billion in revenue and employs around 4000 highly trained professionals around the world. At the age of 40 his father passed away and he ended up in a fight over the inheritance with his siblings, which he lost. Empty handed he founded his company from scratch, and became the undisputed market-leader about a decade later. This tale is however not about my friend’s achievements, it is about the people that surrounded him, his advisors, his co-directors, his financiers. No-one had any faith in his ideas and plans. Banks did not want to invest, they thought he was mad. How wrong they were in only focusing on the many risks and unknowns and not looking at the potential upside. In hindsight they must have pulled their hairs, as they also could have earned millions. It is not just my friend, who had a great but untested idea, which ran into a negative attitude and resistance from ‘industry experts’ and banks. Notably in 1985 Steve Jobs, was fired from Apple, only to be hailed in as the savior a decade later. There’re many other similar stories. Faced with a new idea or concept it is so easy and tempting for commentators and experts to be negative and shoot it down. It is easy to quickly come up with 10 reasons why NOT to do something, but perhaps there is ONE more meaningful reason to push ahead regardless. Opportunities and naysayers Lawyers are the ultimate naysayers. If it comes to highlighting potential risks, they are second to none. Call it professional deformation, if your entire working life revolves around spotting every potential present or future risk under any thinkable or even unthinkable scenario, you can be forgiven for carrying that attitude into the partner meeting. Like sharks that can spot a drop of blood in the ocean from miles away, a lawyer can spot the tiniest of risks before anyone else can. This focus on the negative is exactly what sucks the life out of partner meetings. Managing Partners typically have to strategically plan and lobby in order for any proposal not to get shot down in the first minutes after presenting it. What they fear most is one partner taking the floor and raise questions or objections on one tiny detail, after which the whole discussion derails into a whirlpool spiraling downwards, ultimately ending in the rejection or mutilation of the proposal. Any MP will confirm that it is extremely rare for partners to respond with instant enthusiasm to anything. Even being shortlisted for an award could be met with vitriol. Quite often naysayers dominate the discussion. Lawyers have a Pavlov-response when it comes to discussing potential downsides. As soon as anyone starts an argument they cannot help themselves diving in that rabbit hole. Discussions can derail on stupid and insignificant details without prior warning. Many great opportunities were missed and good proposals got axed because of these dynamics. There is no single best solution It is a common misconception that there will be a best-solution to any problem. Typically there are several solutions that produce different outcomes, which are all equally acceptable. One can have a heated debate on whether the color of the new letterhead should be green or blue, but in the end it does not really matter. The paradigm that there is only one possible best solution is deeply ingrained in the lawyer way of thinking. Every single detail must be right and one should never ever settle for what is less than total perfection. In the real world unfortunately this does not work. Compromises have to be made and risks have to be taken. It would be so liberating in many ways if lawyers would be able to control their negative reflexes. It is so much harder to come up with an idea or initiative, than it is to shoot it down. The eternal focus on the downside and the negative, often creates a negative mood in partner meetings. Just ask yourself the question why is it that most partners hate going to partner meetings? How often is it fun, how often does it feel like progress is made, how often does it feel like time well spent? Partners are busy with their client practice. If they spend time on internal meetings, make it count. Grab the opportunity to use the ‘swarm intelligence’ of all the brains in the room to brainstorm on new ideas. Use the partner meeting to build a strong culture of unity, trust and ‘esprit de corps’. In order to achieve that we need to change the way we respond to all things new. Constructive criticism I am by no means advocating partners should not speak their minds. On the contrary, critical interventions often lead to cross fertilization. What needs to change is the way in which critical questions are delivered. For a trained lawyer it super-easy to verbally burn down any initiative or idea to the ground, but that is not very helpful, is it? What has proven to work really well is to instate a rule that any contribution needs to make the proposal better. Instead of highlighting risks, offer suggestions how to mitigate those risks. Instead of shooting down an idea, offer an alternative solution to reach the same ultimate goal. Basically anyone questioning an idea, proposal or initiative, should bring a better alternative to the table. Naysayers need to become co-constructors. Implementing and keeping such policy in partner meetings will notably change the culture of the firm for the better. Rest to say that while proposals can absolutely benefit from the input from partners, for the majority of initiatives and proposals that are put to the partner meeting by the firm’s leadership, it is better to just trust their vision and judgement and refrain from diving into potential weaknesses altogether. In the end it does not really matter if the letterhead is printed in blue or green.

At the end of last year, Netflix premiered a new film that overnight became a worldwide hit. It features among others Leonardi di Caprio and Meryl Streep. The film’s, ‘Don’t Look Up’, central theme is a giant comet that is on course to hit earth and wipe-out life as we know it. Instead of acting and trying to prevent imminent disaster from happening, people are encouraged to just deny that the threat is there: look down at your telephone screens and don’t look-up at the comet. Hence the title of the film. One might make fun of the ‘foolish people’ looking down and their populist president encouraging them to do so. Media ,mostly raving about the film, point out that the film’s comet is actually a metaphor for climate change. Only a fool could face away from the facts, right? Well, maybe not so fast. Perhaps there is more to it than plain stupidity. Denial is a survival strategy As a lawyer, it is your profession to identify and mitigate risks. In a professional capacity, denial would indeed be outright stupid and a huge liability. However, lawyers do not just act in their professional capacity. Being human, we actually act mostly in our human capacity, and it is in this capacity that lawyers do not respond different to risks than anyone else. Let’s take an imaginary partner who’s book of business has steadily been declining. The most rational and logical thing to do would be to go out and double-up the effort to develop new clients. Reality however is that typically the opposite is what is really happening: the partner denies the problem, withdraws the hours from his* team and hides himself* behind his* desk. Just pretend you’re busy and hope the real problem will disappear. Of course it never does. When a problem gets too big for us to handle, denial is the to-go-to survival strategy. People with piling debts, typically don’t open their mail anymore. Sure you have heard of ‘fight or flight’ as a response to danger. Actually there is a third option ‘petrified’ that needs to be added. Faced with a threat we often do nothing at all. Sometimes being an ostrich and simply bury your head in the sand makes sense. (Real ostriches do not actually do this, it’s a myth). There is a category of problems that solves itself after a while. Denial patterns in law firms Working with lawyers and law firms, we see denial strategies first hand all the time. The fact that lawyers are typically masters in finding ‘reasonable sounding’ explanations surely adds an interesting layer of complexity. One could argue that partners in law firms are masters in denial. Their fraud excuses sound extremely plausible. Contrary to popular belief, partners often have a fragile personality. The partner that is dominant and bullies others, might actually unconsciously just use that behavior as a defense mechanism to prevent others from coming too close. Deep down many partners are vulnerable and insecure, even if they will never show or admit. When it comes to talent development and behavioral change, this ‘shield’ becomes a major hurdle. All change starts with the will to change, which can only come from acceptance of the need to change. One of the common manifestations of ‘putting up the shield’ is proposing what we have called a ' Deus ex Machina’ solution' . A form of magical salvation from the outside. Yes, I would definitely be more effective in client development, if only we had a better CRM system. (Recognize this one?) In other words: it is not me that is to blame, it’s the system. Denial optima forma, with a plausible excuse. Change starts with facing reality I am aware that most of us do not like being confronted with our own weaknesses or failure. Partners in law firms might feel particularly vulnerable in this respect. Still, true greatness cannot be built on a fragile ego. In order to grow and develop as a person/personality/human, we must find a way to deal with ourselves. Face our fears and shortcomings. Live with our inner demons. Perhaps this is not easy, it is not the end of the world either. On the contrary, people who are less preoccupied with what others think of them, are generally stronger. It is always better to face the facts and take control, than deny and become a victim. I have noticed these sensitivities and the fear of hurting fragile personalities, when discussing our 360Talent Tool with law firms. You might expect that everyone would grab the opportunity to use such an objective development tool with both hands. What could be better than receiving objective anonymized feedback from all your partners, instead of the usual subjective anecdotal feedback from your MP, Practice Head, or a committee? Apparently some partners prefer to stick their heads in the sand, out of fear to get emotionally hurt. Let’s not open the mail and maybe the debt will no longer exist. Moving away As a parting shot, here is an interesting fact for you: we have interviewed large numbers of partners who laterally moved to another firm. It turns out that the vast majority is moving away from their old firm, rather than moving towards their new firm. The partners who highlighted all that was wrong with their former firm, hugely outnumbered the ones that predominantly highlighted what attracted them in their new firm. Often partners just want to leave and do not really care where they end op. That’s kind of sad, isn’t it.

How did 2022 start for you? Perhaps you made some new year’s resolutions? Quit smoking, spend more time with your family, more exercise, just to name a few popular goals. Right now we have not even reached the end of January, and yet the majority of well-intended resolutions have already derailed. That is a bit disheartening, don’t you agree? Why is it so hard for us to change for the better? The answer to that is in the power of routine. Humans are the most sophisticated and complex living organisms. Our brains require comparatively a huge amount of energy. Developing routines is evolutionary a clever way to save energy. If I repeat something, I do not have to invent it from scratch and will not waste brainpower. That explains that changing a routine is an active effort that requires energy. And it will keep requiring a conscious effort right up to the moment that a new routine has been established. One could certainly argue that quitting smoking is a matter of stopping a physical addiction and that is precisely the complex chemical processes behind it that makes it so hard. Whilst this is true, the social aspect is commonly much harder to change. Even with adequate nicotine replacement most people give up and fall back in their old habit. Breaking with the routine is much harder than getting off the drug. Establishing new routines, which become the to-go-to standard mode is the hard part of changing any behavior. What about willpower? The will to change certainly helps, but in general it is not enough. Trust me, many people who are overweight feel bad about their body and genuinely want to get in better shape. It is not the lack of willpower that leads them to fail. Many will go through one diet after the next. Willpower is like a muscle. After using it for a prolonged period of time it will tire out and needs to be relaxed. That is the moment when they fall back and indulge on binge eating. At that point in time, they feel all is lost anyway, so why even try. They failed. Why is all this relevant for me in my capacity as a lawyer, you might ask? As you may recall, my previous two articles focused on talent and the need for structural investment in talent development. Developing talent implies permanent training and learning new skills. This is where understanding of the mechanisms behind change become important. Lawyers can only grow and develop if they change the way they work and behave over time. No change, no development. No development equals regression, compared to others. Most change projects miserably fail Anyone who is a partner in a law firm works under immense pressure. There are demanding clients and complex matters and transactions that require undivided attention. On top of that are the requirements put by the firm. Partners have to bring in a certain amount of revenue each year, they have to educate and train young lawyers and participate in internal meetings. Meeting such heavy demands requires so much energy that it can only be done with some well-developed routines in place that have been further optimized over time. See the problem? Partners rely heavily on routines to survive and still we want them to change. No amount of willpower is going to pull that off. When push comes to shove, survival instinct will kick-in and the partner will fall back to the usual routine. Easy does it I have no intention of being pessimistic. On the contrary, in order to accomplish change we need to be realistic. Most programs that involve change are far too ambitious. That is why they ultimately fail. There are only three ways form people to permanently change: 1. At gunpoint or after trauma 2. In very small but consistent steps 3. Change of stage The third one, change of stage, perhaps requires a bit of clarification. The short version is this: we all adopt certain roles in certain situations. Like actors in a play, we play a certain version of ourselves. We will be a different person in the office than at home among family. We might behave be slightly different visiting our parents. The bully at the office might be totally sociable when hanging-out with friends. It is much harder than you’d think to change one’s role in a certain setting. We are primed to act in a way our surrounding has learned to expect. That is why moving to another setting can open an opportunity for change. For the purpose of changing and developing the partners in the firm this is not a good tool as they will remain actors on the same stage. Change through trauma or at gunpoint also typically is not a feasible method. In rare situations it might help. “Unless you get your act together fast, we will kick you out” No need to state that if change does not occur, you need to act, otherwise no-one will ever believe your threats anymore. Realistically small manageable steps are the only way for change to succeed. That is why we are not in favor of grand, all-encompassing ambitious programs. Whilst they look great on paper and make for super exciting kick-off meetings, they will invariably fail in execution. The only realistic way for lawyers to change is in a long succession of small intricate steps. Replacing one routine with another and then the next, and so on. If everything else fails. If everything else fails, you can always turn to Xiao Zhu. Xiao (pictured above) is a Chinese entrepreneur who is a professional anti-procrastinator. It is his job to call, text and pester you, to make sure things are done. It seems best to consider this a method of last resort.

Research points towards talent being the key ingredient distinguishing the elite law firms from the mid-tier. Analyzing common characteristics of partners ranked tier-1 or tier-2 by Chambers or Legal500 shows that it is not legal knowledge but soft skills and talent that make the difference. Rainmakers typically did not build their practice on outstanding knowledge of the law, but on their other less tangible talents. Given the importance of non-legal skills, it is quite surprising that law firms do not really invest in developing such skills. As any law firm will have a well-organized and structural program for legal education and training, only few have a comparable program in place for the non-legal development of their lawyers. Law firms are underutilizing their revenue and profit potential as a consequence. Talent is not only for recruitment Perhaps recruitment is the only place where law firms are actually focused on soft-skills. Today it is not only the grades that count, but recruiters are specifically looking for extracurricular activities that demonstrate an interest beyond the law. Unfortunately once onboarded law firms seem not to be interested anymore. The emphasis during one’s career path in a law firm is heavily on ‘making flying hours’. The idea behind this is that one will automatically one day make a great partner if one works hard and has a lot of experience. Until the day a lawyer is made partner, any development of the important non-legal skills is marginal. Once partner, in most law firms all investment in personal development stops. Partners are supposed to be a ‘finished product’. No external input needed. What a missed opportunity! Success is based on investment in people The difference between an OK law firm and a highly successful law firm is in the talent. That is a fact. Few investments yield such high returns as smart investment in personal development of lawyers. Regardless if it’s novices or senior partners, every individual lawyer will benefit from developing and honing their non-legal skills. What is holding firms back is often the fear that these programs go haywire, cost a lot of money, fail to produce results and turn out to be a waste of time. That is why we have developed the 360Talent Tool to help you out. 360Talent Tool Based on over a decade of experience working with elite law firms we have defined the 7 Core Dimensions© on which highly successful partners score above average. Partly this is down to talent, but largely these dimensions can be developed and improved over time. To minimize the risk of wasting time and to help law firms improve their partners’ skills over time we have developed our comprehensive easy-to-use 360Talent Tool ©. The tool helps identifying development opportunities and offers the ability to track development progress over time. The tool is easy to use and takes very little valuable partner time. The 360 produces reliable, objective and actionable results. The 360, how does it work? Basically the 360 is a simple anonymous online evaluation. All partners are invited to rate each other on each of the 7 dimensions. Rating is easy: 5 stars means excellent and no priority for improvement. 1 star signals priority for improvement. 2/3/4 stars are somewhere in-between. Experience shows that it takes on average 3 minutes to evaluate one partner. This has a significant positive effect on the participation rate. On average more than 90% of all partners fills out the questionnaires. It is obvious that there are subjective elements at play when rating other partners. There will be differences in interpretation of what each of the dimensions mean, and some partners will not know some of their fellow partners well enough. The guiding principle is that evaluation should be based on ‘intelligent intuition’. Post examination of result has showed that this methodology works really well and indeed produces reliable results. The procedure is fully managed by us. All you have to do is provide the list with email addresses and make sure our survey is not blocked by your firm’s firewall. We send out the surveys and the reminders. We do the analysis and provide the results in an actionable and comprehensive manner. No need to say that the survey is 100% anonymous. It is not possible for anyone, including us, to see who did what evaluation. Inspiring, Actionable and Measurable One of the key advantages of the 360Talent Tool is that it provides totally objective insights to each partner and as such a powerful tool for future development. Because of the methodology the results are completely free of any bias. Feedback does not depend on individual relationships or anecdotal evidence. We have found that this significantly increases the acceptance. On an individual level the scores provide an unparalleled and neutral insight in on what dimensions best to focus when it comes to individual talent development. As the survey will be repeated on an annual basis is becomes possible to track progress and development over time. This is a strong incentive for partners to change and improve their skills. Positive effect on firm culture We have noticed that in some firms there is an initial negative attitude regarding the concept of partners evaluating partners. These firms fear that the evaluating partners will ‘unleash the beast’ and highlight inequalities between partners. Such sentiments of caution seem more common with law firms that have a low-trust culture. In reality however we have so far not noticed such adverse effects. On the contrary, inviting partners to actively think about what each of the 7 dimensions means to them and to their firm, has commonly led to open discussions that solidified the values of the firm and created a stronger feeling of operating under a ‘shared vision’. The majority of the partners who have participated so far, embrace the opportunity to further develop as they subscribe to the necessity of permanent improvement to keep up with market demands and maintain a competitive edge over their peers in the market. Who is it for? Law firms that aspire to be the winners in their market must turn themselves into talent breeding institutions. The law firm that attracts and maintains the top talent will be the one with the most interesting clients and mandates and the highest profit per equity partner. Talent is not just something one is born with. It needs to be developed, honed and maintained. Our 360 is the best tool currently available in the market to support law firms in this process. Our methodology is suitable for any law firm from 18 to about 80 partners. Jump on the opportunity Don't wait and take positive action right now. Drop Lisa an email and get a free proposal that you can use for further discussion within your firm: hakanson@tgo-consulting.com

Remember how positive and full of inspiration we entered into the new decade two years ago? Seems like ages. Hard to imagine how ignorant we were about how things would unfold when the new decade was just two months in progress. March 2020 our entire world entered into full crisis mode. None of us imagined back then that two years down the line the world would still struggle to get to grips with the situation. As we enter into 2022, the Covid virus still rules our lives and dominates the news. The vaccines, developed with amazing speed, turned out not to be the ‘life saver’ expected to be. So far we all need at least one booster shot to get out of this misery. Legal industry Meanwhile the legal industry is breaking record after record. Law firms are reporting their best years on record. Lawyers have done extremely well the past two years. The drivers behind the growth are an abundance of liquidity in combination with almost unprecedented uncertainty and disruption. The side effects of this tsunami of work have become painfully visible. Many lawyers, even partners, are overworked, suffering mental health issues or burn-out. The numbers of young lawyers resigning have grown. Scrambling to attract adequate replacement, this raises the burden on the ones that carry-on. “The ability to attract, develop and keep talent will become the key differentiator for law firms” Before we descend into doom thinking, I would like you to take one step back and be proud of yourselves. I’m not joking! The legal industry is not only incredibly successful, but also extremely professional and well organized. Client satisfaction ratings are verry high. Law firms are, but for a few exceptions, a great place to work. They have a strong culture and camaraderie. From a financial perspective one would struggle to find business models that are equally profitable. The problem is that lawyers rarely, if ever, take that step back and be proud of their achievements. Perpetually lawyers are obsessed with flaws and risks. This never ending focus on the negative, while part of the success, is also mentally exhausting. Like a Formula-1 motorsports team, law firms relentlessly focus on every little detail as the know that there lies the difference between winning or losing. Unlike Formula-1, lawyers never take the time to celebrate and recover. After winning the World Championship on 12 December, Max Verstappen took time off. Judging from the news, he still is on holiday today. Unlike Max, most lawyers kept working until Christmas eve and have reported back to duty after New Year. If anything, allow yourself that morale booster shot. Be proud of what you have achieved! Talent is the next battleground for law firms If you cannot take care of yourself, how can you take care of others? Relentlessly focused on their practice and always anxious not to make even the tiniest mistake, law firm partners can be extremely demanding to their team of associates. Irregular workloads and working hours, intense scrutiny and verbal and emotional abuse are not unheard of. The problem is that the younger generation is not accepting this anymore. The present generation of partners have all grown up in what they think are similar conditions. They also had to do all-nighters, skip social events, holidays and family gatherings, have also likely been shouted at from time to time. The difference is that compared with today, the real workload back then was relatively mild. The other differentiator is that Baby Boomers have a very different perspective on what matters in life than the Millennials and Generation-Z now joining the workforce. The Baby Boomers knew that their social and economic situation would only get better. For the present day generations this is not the case as it will likely get worse. Associate turnover rates at AmLaw 100 firms reached nearly 25% last year, up from about 19%. Last year a large number of law firms have thrown large sums of money at it, but despite big salaries and round after round of bonuses, associate attrition rates are spiking, too. The present day generation of lawyers does not want to be seen as a ‘production asset’ or just another cog in the billing machine. They don’t want to be considered resource that can be bought with money. Todays talent wants to be seen and treated as human individuals and not as legal ‘sex workers’ providing a service without any personal emotions. This is not a ‘pussy generation’ Baby Boomers often speak of the younger generation in a disparaging manner. They are described as entitled, weak and sometimes lazy. Some call them the ‘Snowflake’ generation. It is important to stress that this does not do them justice and it more than counterproductive. The younger generation is equally, if not more, talented than their parent’s generation. They are also absolutely willing to go the extra mile. One just has to look at today’s sports records or the large number of successful start-ups for example. The key-differentiator is that the younger generation is not for sale. They are willing to give it all they’ve got, but only in exchange for personal growth. Law firms are well advised to change course and start offering professional and structural personal development opportunities for talent. For us at TGO Consulting, helping our clients design, roll-out and maintain a smart development program, tailored to individual needs and preferences will be an important strategic focal point in 2022. Our TGO-360 evaluation tool has proven to provide a solid base of associates and partners alike. Perhaps you should inquire and find out how we could help you being successful in 2022 and beyond.

As we are now in December, we can say with some confidence that for law firms 2021 will be another bumper year. Probably even better than last year, which was already record breaking. The pandemic has triggered unprecedented amounts of liquidity created by the National Banks. Quantitative Easing was universally seen as the best way to avoid a global economic crisis, and so far it seems to work. For investors money certainly is not the problem. With so much cash and interest low or even negative, it is no surprise that investors are looking for yield. This for one is the engine behind the M&A and IPO flurry we are seeing. It certainly is keeping lawyers off the street. It is fair to say that since September 2020 the workload for lawyers has been consistently at an extreme level. For more than 14 months now, many lawyers have hardly had any time to breathe, and it is taking its toll. Partners and associates alike are suffering burnout, severe work-related stress and mental health issues. Dropouts further increase the work pressure for those who still soldier on. Throwing money at it is not the solution Desperate to get the work done and trying to avoid more trained associates leaving, law firms have raised salaries and hand-out huge bonusses. Focused on revenue and profit, the last thing law firms want to do is NOT accepting new mandates or clients. Saying ‘NO’ does not seem to be an option. Sure, every mandate will add to the firm’s bottom line. With costs being fixed (except for the extra bonusses) all extra revenue will come at no extra costs and will entirely convert into profit for the partners. It is easy to see that this is too attractive to resist. Hence the drive to keep accepting the new mandates even if many lawyers are at the brink of a collapse. Paying outrageous bonusses or raising salaries is peanuts in the bigger scheme of things, at least from the firm’s perspective. From the individual non-equity-partner lawyer perspective, extra money does not take away the pain of being endlessly overloaded with work. A bonus at the end of the year does not reduce stress or improve work/life balance. Despite the extra monetary reward, associates still get a burn-out or quit their jobs. The current situation calls for an entirely different approach. What is it actually that lawyers want? Last week Thomson Reuters published their ‘Skills and Progression Mid-Year Survey, November 2021 edition’. This research is conducted among 1170 stand-out (identified by clients) partners from over 50 countries. The researchers found that “younger lawyers, along with female lawyers, were the least happy with the number of hours they were working, demonstrating the widely acknowledged push factor which causes many in these groups to leave the industry”. The group expressing dissatisfaction with working hours is substantial — 3 of every 10 lawyers. In line with other working hours data in the industry, younger lawyers in the survey work the greatest number of hours and the oldest age group analyzed work the fewest. Contrary to what we may assume, the youngest lawyers are not the group most comfortable with long working hours. Young professionals are placing more explicit emphasis on work/life balance, mental well-being, leisure, and other activities outside work, than was evident in previous generations. A higher proportion of the professional workforce are mothers and as men now take more active roles in child-rearing, it means that younger professionals as a group are juggling more domestic responsibilities alongside their paid jobs. Today’s under-40s are also conscious that their working lives will likely be much longer than those of their older colleagues, which further influences their perspective. Collectively, these factors mean that long working hours are a potential push factor for younger talent to leave law firms. So, what is the solution? As throwing money clearly is not the solution, what is, you might ask? The answer to that is twofold. On the one hand law firms need to reduce the workload, on the other hand firms need to focus on training and personal development. In order to understand, let’s break this down. Reducing the workload: A strategic shift by accepting only mandates that contribute to the market reputation of the firm. Except for the largest legal markets, ‘National Champions’ cannot live of strategic work alone. The markets in which they operate are simply too small to sustain the 3-5 top law firms only doing strategic high value work. In order to survive these firms typically have to take on about 50% non-strategic/commodity mandates. In times of work-overload like we are seeing today, it makes sense to reduce this number. Partners should actively reduce the volume of non-strategic work. A more even distribution of workload. Analyzing data we have found that even when firms operate in overdrive mode like right now, the workload distribution between the associates varies wildly. While part of the associates make crazy billable hours, some others are still find themselves below target. In times of stress partners tend to rely more on the associates they trust most to deliver. Partners fear having to spend too much time instructing some others. Hence the workload imbalance. The use of technology to augment lawyers. For the last decade or so law firms have been tumbling over each other to tout their Legal Tech. One firm even smarter and more innovative than the other. While this has been hollow words for PR purposes only, some real world adoption and implementation of new technology would have made perfect sense. As the Creation-Production Divide Concept© shows, the value of the lawyer to the client is not in Production (execution), but in Creation. Yet it is Production which is most time consuming. Law firms could easily free up a significant amount of time by augmenting their lawyers with technology that will make Production/Execution substantially faster and less time consuming. Out of fear that this will undermine the business model (reducing the number of billable hours spent on a mandate), law firms have resisted taking the necessary steps at the right time. This is now coming back to bite with a vengeance. At least 25% of all billable hours consists of ‘dummy work’ that could easily be done by a machine. Just imagine how this could have prevented the current workload crunch. Training and personal development: Reading the Thomson Reuters report between the lines, there is something else that clearly stands out: the need for personal development perspective. 84% of respondents say they want to be more involved in client relationships, 62% would like to see more time spent on mentoring. This aligns with our own findings. Our data shows that young lawyers are looking for personal growth rather than for money and income safety. The younger generation wants to clearly understand how the time they spend at the firm will help them grow and develop skills that have value later on in their career. Younger lawyers don’t want to be just a cog in the billing machine in exchange for an absurd amount of money. They are looking for meaning and personal growth, in exchange for which they are surely prepared to put in the hours. Law firms are well advised to recognize this need. Failing to do so might well leave the partners that today are 55 years of age and up, having to work alone without a team in the future.

The other day I was having dinner with the managing partner of a well known leading law firm. At some point he confessed to me: “You know what Jaap, I have been a partner with my firm for more than 20 years now. I have been the managing partner for the last four years and I have just been reelected for a second term. For the last few years I’m feeling more lonely than ever…” To tell you the truth, for me his confession did not come as a surprise. As I have been working with law firm leaders for many years, I know that being managing partner can be a lonely job. Most partners who get elected are not prepared for this. Let’s examine what transformations take place. As an MP you are no longer ‘one of the boys’ As an ordinary partner you have probably developed professional friendships with some other partners. Perhaps you go out for lunch together, probably some regular banter, complaining and office gossip. Maybe you travel together to visit referral firms. What most newly appointed MP’s are not prepared for is that all this will stop once you are the managing partner. As a managing partner it is difficult to have a closer friendship with some of the partners as it may look like a favorable position of unfair advantage to others. As a managing partner you cannot engage in office gossip or even share your private opinions. As a managing partner you may have to get used to eating alone in the ‘canteen’ as there will be a threshold for joining you at the table. As a managing partner you have a responsibility to lead the firm, but that same responsibility will also make you an outsider. MP’s make enemies As a law firm leader you have to make decisions all the time. Some of those decisions will affect individual partners. Sometimes the MP has to make some tough decisions and some of the partners may get angry as a result. In a worst case scenario it might be required to take unpleasant measures against your closer friends. Many managing partners struggle with this kind of confrontations. It is so much easier to be ‘Mr Nice Guy’ and make everyone happy all the time. Unfortunately this is not how the world works. Sometimes you have to break some eggs to make the omelet. As an MP you will make enemies and there will be scores to settle. Having the unfortunate task to do the dirty work can be emotionally challenging. Most humans prefer harmony over conflict. Also don’t count on support from the other partners as you act in their interest or even on their request. The majority of the partners may pressure you to take measures against an individual partner, but once you act they will most likely remain silent and turn their back in order not to get emotionally involved. Perhaps only after everything is settled and put behind, the MP might get some applause, but probably not even. No praise only criticism This is another element that can make law firm leaders feel lonely. Law firm partners have a strong tendency to focus on what is wrong rather than what goes well. As a managing partner you could be working 24/7 and dedicate all your talent and energy to the firm, still you will likely be criticized for those few things that are still on your to-do-list. It is my experience that for managing partners this can be frustrating and exhausting. The absence of positive feedback and the ever continuing criticism can really get under your skin after a while. Becoming the managing partner, you should prepare for this. Constant focus on the negative and little or no recognition for the success. A vulnerable position When an experienced partner, trained as a lawyer, becomes the managing partner, he/she is entering in a whole new territory. It takes some time to get the hang of it and figure out what it is you are actually supposed to do. One way or the other the investment in time in managing the firm will go at the cost of your practice. Effectively a fulltime managing partner will be a part-time practicing lawyer at the best. We all know that being a practicing partner at a leading high-end law firm is extremely demanding. Combining it with managing the firm is near impossible, I only know very few examples of managing partners who pull that off successfully. Most managing partners over time get fully absorbed by their management responsibilities and lose their clients and practice as a consequence. Not having a meaningful practice of their own, will make a managing partner vulnerable. Secondly managing the firm requires a totally different skillset than being a practicing partner. From micro to helicopter view one could say, or from risk to opportunity. After a period of learning and unlearning, some managing partners develop an interest and talent for management. The prospect of at some point having to return to practice might over time become a threatening one: some do not want to go back to being a practicing lawyer. They become locked into the MP position and cling on to it with all their might. The fear of being demoted makes them vulnerable. This further adds to the emotional burdens mentioned. Be prepared All this might seem to be a bit overwhelming and could put partners off from accepting the managing partner role. It should not. Managing your firm can be hugely satisfying and rewarding. The important message is that one should start with the right expectations. The more realistic and aware the new managing partner is, the better prepared for what is thrown at him/her. At TGO Consulting it is our business to prepare newly elected law firm leaders for what is coming their way. We also coach managing partners on the job. If you accept the position, you’d better make it a success. We got your back covered.

As the year slowly draws to an end, for many law firms a familiar topic is on the table. At least for those that end their fiscal year on 31 December. This is the time for law firm leaders to zoom in on individual partner’s performance. Having only one more month to go, the balance can be made with a reasonable amount of accuracy. Universally the focus is on a partner’s revenue and billable hours. This may seem logical, but actually it is an unreliable metric. The core of the issue is that a file for administrative reasons will be in the name of the partner who originally opened it. As a consequence all the revenue generated in that file will be put under the name of that partner. Even if other partners had a substantial contribution in completing the file, the revenue they created will not show up under their name. The matter is further complicated by ‘origination credits’ or the ‘billing partner’ concept that attribute all or part of the revenue to the partner that originally ‘brought’ the client or manages the relationship with the client. There can be several other distorting constructions be found in the wild. All of them blur the view on the true financial contribution of the individual partners. Not only revenue is unreliable and biased as a yardstick for partner performance measurement, the same holds true for billable hours. The number of billable hours made by a partner are also not a usable measurement of performance. In general it should raise suspicion rather than praise if a partner makes a lot of billable hours. Partners should distribute the work to the associates and use a substantial part of their time to go out and find new matters and new clients. Why measure performance in the first place? So, if revenue and billable hours are unreliable metrics to use, what metrics should law firms use to monitor performance and provide partners with insights on how they are doing? Before answering, probably another question needs to be posed first: why are law firms closely monitoring individual partner performance in the first place? For any ‘eat what you kill’ firm the answer is probably easy, but for pure lockstep? In theory, measuring would spur partners to do the best they can. In reality measurement is a compensation for a lack of trust. If partners in a lockstep firm would completely trust each other, why would they want to measure individual performance as performance has no consequence for the profit distribution? Focus on individual performance tends to undo some of the fundamental benefits of equally sharing the profit as it emphasizes inequality and creates an unsafe environment for some that become vulnerable. Size matters Actually for any law firm, the average file size should be an important metric. If two partners both have a revenue of 1 million (just for the sake of the example) and partner A has 10 files of 100.000 and partner B has 100 files of 10.000, partner A clearly has the better practice and will contribute more to the overall reputation of the firm. For files, size does matter. Larger files are more likely to be strategic than small files. Larger files are also more profitable to work on as it will be easier to spend a full day on the same file, rather than an inefficient start-stop on multiple smaller files. What I am saying here is that partners should be stimulated not to gather revenue regardless, but focus on working on the largest possible files they can get out of the market. If there is too much emphasis and pressure on revenue alone, partners will be inclined to take any file in order to meet their targets. They shouldn’t. Average file size should be made an important metric in any high-end law firm. Feeding the little birds If a law firm had to live only off the revenue created by the partners, profit shares would plummet. In order to reach an acceptable and competitive profit, any law firm needs leverage. More than the billable hours of the partners, the billable hours of the associates contribute to the net-result. Even with today’s high salaries and office costs, the profit margins on the associates are incredibly high. It is therefor of vital importance that partners provide the associates with all the work they need to reach at least 100% utilization. Not only utilization is an important metric to monitor, but also the ratio between partner hours and associate hours. Partners should be required to keep all associates fully occupied. In an ideal situation, there will not be a single associate that does not meet the targets. Only by closely managing the utilization of each individual associate, a law firm can properly manage profitability. In reality things often do not function optimally. Partners can be preoccupied with meeting their own billable hours target and do work that should have been done by associates. What we also see a lot is that workload distribution is very unevenly distributed between associates. In such situation, part of the associates makes a lot of hours while some others are seriously under-utilized. The problem here is that under-utilized associates do not get the same learning experience than the ones that work a lot. This will further widen the gap. Partners should have an obligation to equally distribute the work and provide all associates with enough work to meet the targets. Like the mother birds, partners have to feed the little birds, all of them.

At any law firm, only a small percentage of all lawyers are partners. And even within the ranks of the partners, there are two tiers: the equity partners and the salaried partners. It is not easy for a lawyer to become an equity partner at the firm. Partnership equals ownership and it takes at least ten years of experience, business acquisition skills and a solid business case to be voted in as a new equity partner. In the past, once in, you would be left alone for the rest of your career at the firm. Partners were independent, self-steering and self-responsible business units. As said, this was the past, today partners are not home-free and these days a partner’s financial performance is tightly monitored. For the majority of partners their financial performance is directly connected to their renumeration. Many law firms have some sort of renumeration committee that annually reviews each partner and decides on what part of the firm’s profit a partner will receive. It is not uncommon to take other elements, besides revenue and billable hours, into consideration as well. For various reasons the annual partner review however, is a root cause for tensions and debate. Let’s look at some of the bottlenecks. The financial information might be wrong or incomplete In our day-to-day practice we do often a Financial Business Analysis©. If there is one thing that we have observed through the years, it would be that the data we receive straight out of a law firm’s financial system typically misrepresents what is actually going on. This has nothing to do with poor administration but is just a consequence of how matters are being recorded. Firstly, a new matter is always opened on the name of one individual partner. Even if during the course of the matter other partners also work on the case, the revenue will be in the name of the partner who originally opened the file. Secondly, many law firms use Origination Credits of some sort. This could take many shapes and forms, but all of them will distort the data and blur the view on an individual partner’s performance. Often one partner can claim ‘ownership’ of a client and get part or all of the revenue in their name, regardless the amount of time they have actually spent on the file. Thirdly, just focusing on bottom-line revenue completely misses the point. Not all revenue is created equal. The profit margin will largely depend on leverage and effective hourly rate. Your reputation will depend on the quality of the practice. If two partners both create 1 million in revenue and partner A has 10 matters of 100.000 and partner B has 100 matters of 10.000, partner A definitively is the better performing partner. Financial data is only half the story Partners do not operate into a vacuum. Therefor there is a need to take other elements into account that are not directly derived from the firm’s financial system. What exactly these soft elements are varies wildly between firms. The way in which a partner interacts with his/her team might be one. Firms typically don’t appreciate partners that mentally or physically ‘mistreat’ associates. Contribution to the firm, might be another one. What such elements have in common is that they are to a high degree subjective and could therefor be seen as unfair. The elephant in the room The main issue I have with all these measurements and appraisals is that they are looking in the rearview mirror. It focuses on the past and criticizes flaws, rather than identify growth opportunities. It is a common misconception to consider the equity partners ‘complete’ and their skills and talents a given that cannot or need not be changed. We firmly believe that every partner is entitled to further development and growth. Partners should not be seen as independent, self-steering and self-responsible business units that are best to be left alone. It is in the interest of the individual partners and in the interest of the firm to permanently stimulate development and growth of each of their partners. The annual partner review should not focus so much on what a partner did, but on development opportunities instead. Bear with me, I am not preaching some sort of softy tree-hugging approach. Development should be quantifiable and progress should be measured at all times. In that respect our method does not fundamentally differ from the present methods. What is fundamentally different is that we should look forward and focus on the future, rather than focus on the past by looking in that rearview mirror. We have a method for that TGO Consulting has over the years developed a method that might help you to unlock more of your partners’ potential. Our method integrates financial data and skills and attributes. It includes a smart tool for assessment and measuring progress. Please drop us an email if you are interested in learning more on this method and on how it could fit-in with your firm’s particular culture and needs.