“NOTHING FAILS LIKE SUCCESS.” This is how Richard Tanner Pascale begins his ground-breaking Managing on the Edge: Companies That Use Conflict to Stay Ahead (New York, 1990). “Winning organizations,” Pascale suggests, “are locked in the embrace of a potentially deadly paradox. This is because great strengths are inevitably the root of weakness.”
Pascale argues that successful companies become fixated on the business model that made them successful. Achieving further success is accomplished by way of incremental improvement to the existing model, i.e., closed-loop-thinking, to the almost total exclusion of innovative out-of-the-box thinking. The corporate culture of the organization becomes “closed”.
On the other hand, there is persuasive research that suggests that nothing succeeds like adversity. For intelligent, highly motivated individuals the defining moments of crisis can become important shaping experiences that make them stronger. “The flame that melts the wax tempers the steel.”
The more than 300 lawyers from across Canada who have been profiled in various Lexpert cover stories as being the best and most successful in their respective fields show a surprisingly strong pattern, as a group, of adversity in their backgrounds (see “Canada’s Top 25 Corporate Litigators,” “Top 40 Under 40,” “Canada’s Top 30 Corporate Dealmakers,” “Power Bloc: Canada’s Top 25 General Counsel,” “Carpe Diem! Canada’s Top 25 Women Lawyers” and “Top 40: 40 and Under,” in the July/August, September, November/December, 2002; April, September, 2003; and September 2004 issues of Lexpert). Many of these high achievers were children of immigrant parents who faced all kinds of financial and cultural challenges in making a new life in Canada. Others faced considerable financial hardship. A surprising number had a parent who died prematurely or had one or more parent with a serious illness.
Interestingly, these patterns of adversity appear to characterize high achievers in many disciplines (see, for example, Hans Eysenck, Genius: The Natural History of Creativity, Cambridge, 1995). The end result is the same. Greater resilience, hardened resolve, and a fierce determination to move forward.
SUCCESS FAILS. ADVERSITY SUCCEEDS. What has this to do with the culture of law firms? And, more generally, what do law firm cultures share in common? What makes specific cultures unique? And what are the factors that create strong, enduring cultures of excellence?
Strength reinforces strength. Law firms are unique. To begin with, those who attend law school score in the 90th percentile of the general population in terms of intelligence and potential. Second, and much to the credit of the rigorous selection process employed by law schools and law firms, lawyers exhibit high ethical standards. They are socially responsible. Accordingly, law firm culture begins from a position of real strength by virtue its ability to attract and self-select a large number of intelligent and ethical professionals. As anyone who has worked in both the corporate and legal worlds can attest, law firms are unique in terms of the density of talent they possess.
In Aligning the Stars (Boston, 2002) authors Jay Lorsch and Thomas Tierney outline a set of beliefs or core values that characterize professional service firms. These five common beliefs are partnership (collegial and competitive), partnership or community (extension of first value), client teams, needs of stars and demands of clients, and perpetuity (immediate self-interest of one generation of partners versus long-term interests of incoming generations). As the authors point out: “While every organization’s culture is distinctive and in many ways unique, outstanding firms are remarkably similar in the norms and beliefs that constitute their cultural core.”
These beliefs and core values, which are the constituent components of a law firm culture, are quite distinct from the culture of corporate organizations. For example, as opposed to hierarchical corporate decisional structures, professional service firms generally function on a much more participatory basis. As Lorsch and Tierney point out, “This means consensus building (the first core value) among partners before major decisions about strategy are taken, and the involvement of senior stars in other aspects of the governance of the firm…it also means that although it is alright for senior stars to compete with one another, it is not alright to let these rivalries get out of hand.” The partnership structure of law firms, of course, is well suited to this participatory culture.
The five common beliefs outlined by Lorsch and Tierney were listed by all managing partners interviewed for this article as being part of their firm’s culture. As noted by Les Viner, managing partner at Torys LLP, “The problem in asking lawyers to describe their firm culture is that we all say we believe in the same things.”
When it comes down to these common beliefs, Viner is absolutely correct. Everyone did say the same things. However, not in the same order, nor in the same way. This point will be returned to later. First, given that culture is a concept that is both ubiquitous and amorphous, it is best to begin by establishing some common groundwork.
BASICS ABOUT CULTURE. Anthropology emerged as a science in the early 20th century. One result was the study of culture. Early anthropologists were fascinated by the wide range of distinctive customs, language, and belief structures of different tribes living in close proximity to one another.
The history of the Lewis and Clark Expedition’s encounter with 58 tribes in the US Mid-West during the early 19th century, as reported by Margot Roosevelt in “Participate, profit or protest?” (July 2002), provides a rich glimpse of cultural diversity. “The Lemhi Shoshone,” Lewis wrote, “were not only cheerful but even gay, fond of gaudy dress…generous with the little they possess, extremely honest.” On the other hand, Lewis describes Blackfoot as “a vicious, lawless, and rather an abandoned set of wretches.”
The study of organizational culture evolved from anthropology as a subset of management and organizational behaviour studies that began post-World War II. Students of organizational culture have found the same curious phenomena and themes of tribalism, even among different groups within the same organization. As defined by Steven McShane (Canadian Organizational Behaviour, Toronto, 1995), corporate culture is:
“…the basic pattern of shared assumptions, values, and beliefs considered to be the correct way of thinking about and acting on problems and opportunities facing the organization. Culture operates unconsciously, serving as an automatic pilot that directs employee attitudes and behaviours…it is therefore a deeply imbedded form of social control whereby individuals abide by cultural prescriptions.”
Culture can be seen as the collective personality of an organization, whether in corporate form or as a partnership like a law firm. It is the end result of a number of variables or components. These include the imprint (vision, personality, work ethic, objectives, etc.) of the founders, modifications to that imprint subsequently made by key decision-makers or partners, internal decisional structures, i.e., participatory or hierarchical, internal decisional or resolution structures between competing or geographically separated groups within the organization, the nature of compensation structures and the professional and personal characteristics that these structures attract or facilitate, dominant work patterns, i.e., individualistic versus team, the nature of internal professional and interpersonal relationships, and the fashion in which the organization interacts with clients, competitors, and the business environment generally (see Art Kleiner, Who Really Matters: The Core Group Theory of Power, Privilege, and Success, New York, 2003).
The end result of the dynamic between these variables or components, including the priority given certain values or objectives, is what individuals inside and outside the firm see as the organization’s culture. Cultures evolve. They can become stronger. They can become weaker or dysfunctional. Law firm cultures can vary greatly. They have their own unique signage which is closely associated with how they prioritize various values. The key point is understanding the extent to which different configurations of priorities determine, in a fundamental sense, the culture of various firms.
STRINGER BRISBIN HUMPHREY is a Toronto employment, labour and human resources boutique founded by Edwin Stringer, Q.C., in 1966. As explained by Charles Humphrey, “Initially the firm culture was derived from a small group of lawyers. It was defined primarily by the personal reputation and personality of Ted. Today, we are still a small group of 10 lawyers and nine support staff, but our culture has clearly evolved.”
According to Humphrey, his firm subscribes to the common beliefs or core values outlined by Lorsch and Tierney. For example, Barbara and Charles Humphrey, now the two senior partners in the firm, believe in perpetuity. That is, leaving the firm in a better and stronger place for the next generation. They have worked hard to fulfill this responsibility.
However, what makes the firm unique are two additional values that are pursued as actively (or perhaps even more so) as the core values of collegiality, team work, ethics, etc. According to Humphrey, “First, we sought to move away from a culture driven by one or two reputations or personalities towards a culture that defines itself as a core of professional excellence shared by the partners. We wanted our culture to become more mature and recognizable on the basis of superior professional merit. Second, we all seek and value work-life balance. We figured out early on that we could provide excellent service to our clients without working 2,000-plus billable hours a year and still earn a handsome income. This second value has driven our size, our cost structure, our rate of billing, and most of our strategic decisions.”
Stringer Brisbin enjoys a reputation as one of the leading practices in its field. It has received a number of unsolicited merger proposals, all of which have been declined. While Humphrey acknowledges adherence to the common beliefs that characterize professional service firms, his firm has, nevertheless, achieved a distinct culture revolving around strong collegiality and interdependence arising from the fashion in which work-life balance has shaped most important decisions.
STEWART McKELVEY STIRLING SCALES, like Stringer Brisbin, subscribes to the common values of professional service firms. However, again like Stringer Brisbin, Stewart McKelvey illustrates how the priority or importance given to one or more particular values shapes the overall culture of the firm.
Stewart McKelvey, with offices in all four Atlantic Canada provinces, is the largest law firm in the region. As explained by Stephen Mabey, the firm’s chief operating officer, “Two words describe our culture: autonomous and entrepreneurial. We operate as a partnership of partnerships. We are a single law firm with common strategy, programs, policies, and separate profit pools. This fits our key values of autonomy and entrepreneurialism and addresses the diversity of our culture. Each of our regional offices has their own unique culture. This is ideal for their market and clients.”
MILLER THOMSON LLP, a full-service firm with over 400 lawyers in offices across much of Canada and in Washington, DC, is quite different from Stewart McKelvey in terms of culture. The firm has a very clear self-image. As explained by Judson Whiteside, chairman and chief executive officer, “We define ourselves as the best mid-market national firm in Canada.” On the day of the interview for this article, Miller Thomson had just completed its merger with Pouliot Mercure in Montreal (the firm is now called Miller Thomson Pouliot LLP in Quebec), the most recent in a series of regional mergers across Canada. Questions of law firm culture were much on Whiteside’s mind.
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Whiteside is well aware that other law firms often refer to Miller Thomson as the Wal-Mart of law. He, in fact, views this as kind of a backhanded compliment. “We are very profitable,” he says, smiling. “Mid-market is a deceiving term. We do work for such companies as Research In Motion or Chrysler.”
Whiteside understands perfectly the interrelationship between culture and strategy. He is also clear as to which comes first. “Our culture is driven by strategy. We made a conscious decision back in 1998 that we were not going to join the chase to become an ‘eighth Seven Sister.’ We also determined that becoming a boutique was not an option. It would mean letting go of some of our best clients and lawyers. So what we were left with was being full-service in mid-markets throughout Canada. We are one firm with one profit pool. Every partner is treated equally and every office is treated the same. Our business policies are non-negotiable because every regional firm that has joined us has done better as a result. We know our approach works. As you can imagine, getting the right cultural fit with people who can buy into our values and who are like-minded is crucial. We spend a lot of time on culture because we have to get it right.”
THE CULTURAL CONFIGURATION at Miller Thomson sounds complex. It is. It provides an excellent case example of the cultural dynamics described by Richard Tanner Pascale in Managing on the Edge. Pascale outlines a sophisticated approach to managing the complexities of culture which involves creating a system of checks and balances by combining what seem to be, on the surface, mutually exclusive requirements. The four requirements are:
Fit: this is the need for consistencies and coherence (for example, values, common goals, systems, etc.) in one’s culture;
Split: this is the need to break activities into manageable parts as a firm grows (for example, practice groups, regional offices, etc.). This encourages autonomy and diversity but may work against some of the elements of “fit”;
Contend: this is the need for construction tension and conflicts in one’s culture. “There are some tensions that should never be resolved,” states Pascale. Examples of constructive tension within law firms would be the tension between the immediate financial self-interest of partners versus long-term firm interests, changing client needs that are at variance with existing firm strategy, etc.; and
Transcend: this is the need for firms to deal with the complexity involved in orchestrating fit, split and contend. This requires judgment and is achieved through a combination of insight, awareness, and intuition about what works best for the firm.
The trick in combining these requirements or needs lies in putting together the right combination of checks and balances that advance the firm’s strategic goals and promote its desired culture. In the case of Miller Thomson the strong diversity that arises from groups of multiple regional offices (which were previously independent firms) and practice groups is counterbalanced by the glue of a single profit pool, non-negotiable business policies, and strong leadership. Jud Whiteside is sometimes described by others inside and outside the firm as a benevolent dictator. Whiteside is quick to point out that there is an executive committee (a further check/balance) that makes all decisions. As well, the firm regularly brings in leadership consultants from Harvard Business School to challenge and refine everyone’s thinking.
Miller Thomson presents a classic case study of the inherent complexity and careful alignment required to fashion a coherent corporate culture. Merger situations constantly challenge firm cultures to redefine themselves and to integrate different “tribes” into a culture that “transcends” what previously existed.
IN THE CURRENT LEGAL MARKET lateral recruitment is a significant factor in accomplishing the strategic objectives of many firms. The culture of the recruiting firm frequently plays a major role. Toronto-based McMillan Binch LLP is a good example. Two recent lateral recruits to the firm are Carmen Diges, a corporate and mining partner, and Kristi Sebalj, an energy and environmental corporate and regulatory partner. Both Diges and Sebalj stress the need for lawyers considering a new firm to take a close look at the culture they are moving into (and ask lots of questions) as part of their due diligence.
As Diges recalls, “The main attraction that McMillan Binch initially presented was Steve Vaughan, a senior mining lawyer and mentor, who I view as someone I can grow with and learn from. He represents a role model of what McMillan Binch is all about. As I moved into the firm, I found that Steve is representative of the culture here: a blend of collegiality, professionalism, and excellence that I was looking for. For example, I needed a referral the other day and so sent out an e-mail that immediately sent my phone ringing off the hook from people I still barely know. The signage of this culture is everywhere. In the quality, length and frequency of discussions, the Wednesday partner lunches where people drift in and out just to talk, etc.”
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For Kristi Sebalj key indicators of the McMillan Binch culture were immediately evident in the design of the firm’s new offices. “When I came here to interview and saw the staff lounge on the 44th floor (called the Sky Lounge), my first reaction was that a firm which would dedicate this much prime space to its people really had to care. Also the same size offices spoke volumes to me about the spirit of equality and collegiality that exists here.”
Given the seemingly ceaseless escalation of the demands of professional practice, it is not surprising that relocating lawyers who have a choice attach great importance to a firm culture with which they are comfortable. Notwithstanding its frequently amorphous nature, the right culture can very much be a hard, valuable asset. It can provide significant competitive advantage in recruitment.
AS LES VINER AT TORYS points out, “Firm culture is just like a family. Whatever you’ve grown up with, you tend to think is normal and right. This is the reason many firms think that the importance they attach to such values as excellence in client service team work, collegiality, putting the firm first, etc., is shared by all firms. But it isn’t. There are some acid-test questions which, if answered honestly, will tell you the way things really are.”
Viner lists seven key questions respecting firm culture that he regularly thinks about. These are:
“When a colleague asks for help in circumstances where you are not confronted (e.g., by sending out an e-mail requesting a precedent), do you (and others) instinctively think ‘What’s in it for me?’” This, explains Viner, “will tell you where the balance between self-interest and the overall interests of the firm is placed.”
“When you (or others) are covering for someone else’s client, do you provide the same level of intense client service? Your response will tell you how strong the team ethos is.”
Does your firm compile, circulate, and compensate partners around a singular factor such as “billings were X” or “so and so” was the originating lawyer for X amount of billings. This will tell you what really gets rewarded at the end of the day and what the firm values most.
What kinds of behaviours do you see regarding how firm partners treat associates, staff, adversaries, etc.? Do they treat people with respect in difficult situations? In situations where they don’t think they have to? This will tell you a lot about how collegial a firm really is and how much it values relationships.
What is the most common point of entry for work? Is it responding to calls and requests for expertise or does it emanate from calls for advice from long-standing clients. “Some firms,” notes Viner, “are more transactional and some are more relationship-based. From my experience both can be highly successful, but this tells you about what kind of culture you are in.”
When you (or others) know that the client will not be able to judge the quality of work, what is the quality actually like? This will tell you a lot about the pride and importance of professional excellence in the firm culture.
How important is “who opens a file” in your firm? How much does it matter? The answer will tell you what the “glue” in the firm is really about. Is it about the money or is it about the overall and long-term interests of the firm?
“These kinds of questions are where the rubber meets the road when it comes to law firm culture,” concludes Viner.
PERIODIC FOREST FIRES Crisis and Renewal: Meeting the Challenge of Organizational Change (Boston, 1995) by David Hurst is an instructive text about organizational culture and change. Hurst compares people in organizations to herdsmen in the Kalahari desert. He also compares the evolution and wellness of organizations to the growth of forests. As Hurst points out, periodic forest fires are a natural and necessary part of survival and renewal. He argues, convincingly, that cultures and organizations need periodic “fires” to renew themselves and to become stronger.
All cultures, much like forests, encounter “fires” from time to time. The way that an organization responds to these crises can either “burn them out” or become valuable defining events. Torys provides a good example of Hurst’s principal of crisis and renewal.
Les Viner still visibly winces when asked about the well-known Torys-Haythe affair. While he would clearly prefer not to remember or talk about it, this “fire” is now an important part of the firm’s history and culture. For many firm members it was a defining experience.
It was your basic nightmare. In late 1999, in a bold entry into the US market, Torys merged with New York-based Haythe & Curley. After a celebratory dinner a senior partner from Haythe & Curley allegedly made a number of highly inappropriate sexual advances to female associates. Lawyers from both predecessor firms were shocked, humiliated and angry.
The response from Torys was immediate. It involved notification of staff, intense discussions between firm partners, followed by a swift decision and demand that the senior partner in question withdraw from the firm. “What it came down to,” recalls Viner, “was were we prepared to act on the very principles we espoused even when it came down to losing millions of dollars? While it certainly was painful, there was unanimous and immediate consensus about what we had to do. It was the right decision and we have never regretted it.”
The Torys-Hathye affair is a textbook example of what constitutes an acid test for strength of organizational culture. Given the costs involved, other firms may have been equivocal in their response. But, as noted at the outset of this article, success fails, adversity succeeds. Moments of crisis can become defining events that make individuals more certain and more determined about their values. What doesn’t kill you can make you stronger.
Irene E. Taylor is a leadership consultant with more than 25 years experience in coaching and advising senior and top talent in Canada and internationally. She writes for Lexpert and leads Praxis, a talent assessment and coaching practice.