Why Law Firms Don’t Change Strategy Despite Client Dissatisfaction: A Management Explanation (Part 1 of 2)

On my drive to the office yesterday, I learned that the Chicago Blackhawks had fired Joel Quenneville, their head coach.

Three Stanley Cups, second winningest among 38 head coaches since its 1926 founding, best playoff record in club history. Replaced by 33-year-old Jeremy Colliton — former NHL and AHL star — current head coach of the Rockford IceHogs.

Lots of chatter over the merits. Great move. Terrible move.

But there’s no question about exactly who it was who’d made that decision: Not “Coach Q” himself.

Someone saw a problem with the team’s status quo — and made a decisive move in response.

Last month GE ousted John Flannery as its CEO due to missed profit and cash targets.

And they replaced him with an executive from outside the company — a move not seen at GE for decades — if ever.

As with the Chicago Blackhawks, Mr. Flannery did not oust himself. GE’s board did that.

Someone saw a problem with the company’s status quo — and made a decisive move in response.

When the men and women at the top of an organization see something wrong with the way that it’s coping with external realities — like customer satisfaction or shareholder support — they tend to make decisive moves like the Blackhawks or GE.

Law firms don’t respond that way.  

And the law firm alumni who comprise most in-house counsel are OK with that. More accurately, many of them don’t like it, but they don’t fire their law firms over it.

So client dissatisfaction with their law firms persists.

With minimal law firm response: “Too Many Awards — Too Little Customer Satisfaction” — in Forbes earlier this year.

Lots of rhetorical hype and promises of marvelous future innovations

But no meaningful change in the present tense.

Lots of criticisms by lawyers who know that the legal profession can do a lot better and have the courage to speak out (such as here and here).

Chronic complaints by law firms’ clients (here and here).

Two months ago, Forbes’ legal commentator Mark Cohen* cited a recent study from Cambridge University / LexisNexis to observe:

“There is unambiguous evidence of a significant and persistent disconnect between law firms and their clients. Only 25% of corporate legal buyers said they would recommend their ‘go-to’ law firm.”

 

Law firms’ business model is based on billable hours. And an emphasis on “associate leverage” — which consists of billing for the work of less experienced employee-lawyers to supplement the work of more experienced lawyers — with the difference between outside billings and employee-lawyer salaries and benefits going to the partners’ bottomline.

Therefore it’s no surprise that those law firms end up sideways with their outside clients — and that corporate executives are critical of their in-house counsel.

So why is this?

My next post will address this — but here’s the short version: Law firms practice management by committee. 

The norm in the legal profession: Lawyers aren’t accountable to anyone … except other lawyers.

 

* Mark Cohen has a distinguished himself as a ‘bet-the-company’ civil trial lawyer with stints as a decorated Assistant United States Attorney, partner in a large law firm, and managing partner running a law firm. Then he founded two businesses to apply the process efficiencies and tech adoption to legal tasks that general managers have long demanded of every function outside of Legal.