Marcie Borgal Shunk.

Smart Strategy

In fall 2017, just as the #MeToo phenomenon was breaking, I had the pleasure of engaging in an intriguing, if not mildly unsettling, discussion predicting how the crisis might unfold in the legal sector. Among the points of discussion: what, if anything, is unique about law firms (or lawyers) which may make them more—or less—susceptible to “bad behavior.” Eighteen months later, the industry has seen a number of prominent headlines—firms embroiled in sexual harassment controversies and lawsuits, an untangling of the policies addressing (or not) those who engage in inappropriate behavior and, most recently, the uncovering of lawyers and firm leaders allegedly engaged in a sizable college admissions scandal. Yet are these signs of an uptick in moral turpitude in an industry that prides itself on ethical standards or simply the representation of broader societal movements?

The answer, like most, is not a simple one. While there are certainly macro-trends influencing recent headlines, there are also factors unique to the legal sector which do not serve us well in countering these influences. For those of you who have had the “pleasure?” of watching “Generation Wealth,” a documentary exploring society's increasing obsession with materialism, it may seem the depravity underlying so many decisions and actions in today's society is unavoidable. The changing mores related to what is and is not acceptable have touched virtually every aspect of our lives. Simultaneously, the internet has elevated the speed with which information is shared and millennials' heightened social consciousness brings injustices rapidly to the forefront.

Amid these universal shifts are a handful of aspects intrinsic to law firms that may put them at greater risk, or at least make it more difficult for them to tackle these difficult challenges head on. Four of these bubble to the top as the most pervasive and, arguably, critical to address:

• The Partnership Structure

Generally recognized as a double-edged sword, the partnership structure has been revered for fostering professional collaborations of mutual respect and support. By design, however, the structure creates a dichotomy of “haves” (equity partners) and “have-nots” (everyone else). Partnerships endorse the shared objective of making decisions for the benefit of those within its confines. While often what benefits the partnership coincides with cultivation of a supportive, encouraging and safe environment, it can also be at odds with it when a choice must be made between a partner and another member of the firm.

Unlike public companies that are held accountable to shareholders, partners hold each other accountable. They approach decisions from a “we're in this together” mentality and frequently are selective about what information is and is not shared more broadly outside the group. This exclusivity serves the purpose of keeping key executive management information confidential. It also diminishes the options available to those within the firm—even within the partnership— who would like to disagree with the majority of the partnership, such as calling attention to inappropriate or unacceptable behaviors.

In recent months, a number of firms have addressed examples of this challenge publicly, sending clear messages to the market of a zero tolerance policy and ousting partners, leaders, associates and other professionals from their roles. This hard stance, though new for many, will serve the firms well in attracting and retaining clients and talent and help to overcome some of the negative attributes of the partnership structure.

• Elite Privilege

Within even the most constructive partnerships, though, also lurks a potentially deeper-seated obstacle: privilege. With wealth comes an expectation (often born out in reality) that rules do not apply equally to all. Individuals from wealthy families or prestigious schools, not a small number of whom propagate the legal profession, will occasionally take their status as permission to circumnavigate systems and protocols others consider standard or required. The college admissions scandal exemplifies this mentality. While this behavior may be a hallmark of the most successful in our society, it can also perpetuate group think or condonement of actions detrimental to others (namely, those outside of the protective walls of privilege).

The way elite privilege most visibly manifests itself in law firms is in the selectiveness of incoming attorneys from certain educational backgrounds, the informal mentorship of those within its confines and, relatedly, the elevation of those to partnership who look most like the existing partnership. In other words, lack of diversity—in gender, race, color and upbringing—stems from privilege and continues to be harmful to law firms and those they serve.

This is not a revelation to law firms. Research from sources ranging from the Harvard Business Review to industry leader Acritas demonstrates definitively that diversity improves results and performance. Law firms know they need to be more aggressive about improving diversity. Most firms today have active diversity programs. Many are investing in professionals to support the recruitment, development and retention of diverse talent. Yet until the legal industry addresses, head on, the quiet, often undetectable nuances of class privilege and its effect of creating classes within its doors, it will struggle to truly ameliorate the situation and effect meaningful change.

• Complacent Cultures

The single most commonly voiced descriptor of culture given by law firm partners is “collegial.” Given the prior two points about partnership structures and privilege, it is easy to see why people with a shared purpose and background often get along. Yet not all law firms fit this mold. Plenty do have greater diversity of background or are home to large groups of partners without privilege. Still, they speak ad infinitum about the collaborative atmosphere that defines them and their firm. This description of culture, though, can be misleading and, in many instances, downright mistaken.

Culture is made up of the behavioral norms to which one feels they must adhere to fit in. If what it takes to succeed in a law firm is to perform at optimum levels, or as in a recent American Lawyer article “just make it happen,” this prevailing attitude, not the collegiality, dominates the experience of firm culture. In dozens of formal, quantitative studies of law firm cultures conducted over the past several years, few have a uniformly constructive experience. Many cultivate, unwittingly, norms advocating competitiveness, perfectionism, avoidance and passivity. They rail against change, refuse to tolerate failure or, in the worst cases, are hostile to those whose opinions differ from those of upper management. Plus, those outside the partnership, including Associates and professional staff, are more likely to experience the negative aspects of the firm's culture.

These forces combine to yield two outcomes: they perpetuate the existing culture by often hiring for “fit,” thereby unintentionally impeding diversification efforts; and they fail to provide the fundamental cultural needs of safety and security that are critical to positive change. Cultural change begins with awareness—firms first need to acknowledge and accept their perceptions may not jive with reality. Then, law firms may undertake longer term efforts to create truly productive cultures capable of empowering all professionals and cultivating environments less tolerant of bad behaviors.

• Lax Leadership Preparation

At the helm of most law firms sit highly influential leaders, some of whom have become embroiled in scandals, and others who have fallen victim to the industry's pressures. What most of these leaders have in common: little dedicated preparation for the magnitude of the roles they've taken on. According to The Legal Executive Institute's “The State of Law Firm Leadership 2018″ by Patrick McKenna and David Parnell, more than half of law firm leaders in 2018 had less than five years' experience in the role and nearly one-third described their transition into the role as “sink-or-swim.” This lack of preparation gets especially challenging when a crisis hits.

One of a leader's many responsibilities is to motivate and inspire. When faced with difficult times—internally or externally, as with a financial meltdown or the rise of the #MeToo movement—this duty takes on special meaning. Ensuring the comfort and safety of the organization and all of its members becomes top priority. Similar to steering a ship through a storm rather than calm waters, embarking on this journey demands a deftness of skill, keen awareness of the ship's current condition and familiarity with the highest-priority potential risks. Even the best prepared leaders may struggle under these conditions. Leadership development is of paramount importance to right the ship of our industry in the wake of moral trials being thrust upon it.

Harkening back to the above comments regarding culture, elite privilege and the partnership structure, it would seem for today's leaders especially, getting a handle on each of these influencers and how they might become vulnerabilities for the firm is an immediate imperative. No organization will be impervious to lapses in judgment. Yet the establishment of cultures, corporate structures and talent development models that buffer law firms against negative behaviors can help the legal industry move towards a more resilient, positive environment for all.

Marcie Borgal Shunk is president and founder of The Tilt Institute, a firm dedicated to unveiling new perspectives on law firm growth through intelligence, innovation and intuition. She specializes in helping law firm leaders make better, data-driven business decisions. Shunk is also a member of the ALM Intelligence Fellows Program. 

More information on the ALM Intelligence Fellows Program can be found here.