Adventure of Strategy

According to their web site, Quinn Emanuel Urquhart Oliver & Hedges, LLP is a 375+ lawyer business litigation firm - the largest in the United States devoted solely to business litigation.  Their lawyers have tried over 1175 cases and won 1078, or 92%.  When representing defendants, their trial experience gets them better settlements or defense verdicts.  When representing plaintiffs, their lawyers have won over $6.2 billion in judgments and settlements.  They are the only firm in the United States that has won three nine-figure verdicts in the last five years. In that same period they have also won three nine-figure settlements.

Not at all a bad role model for other litigation focused firms.

If you want an insight into how the firm works, I'd recommend that you read the posting :

Wherein We Hear From john quinn of Quinn Emanuel

• The Firm's approach to billable hour targets and  bonuses ($0 for associates that billed <1900 hrs ; Cravath + $5k for those 2100 hrs and above)

• Partner appointments (they eschew non-equity partners)

• Governance (Quote: "if you make the right decisions about who you practice law with, lawyers do not need to be governed; you just need to see that they have adequate help and stay out of their way. at our firm we have very little governance")

•  and even party budgets (they are "not adverse to spending money" on these!)

"it has been suggested that i do not use capital letters in my typing in an effort to be "cool." i am not cool; wish i was, but after 56 years i don't think it is going to happen. the fact is i am not coordinated enough to hit the shift button with one hand and a letter with the other."

Hat's off to a great leader (Euromoney calls him "one of the world's leading litigation lawyers"  and Chambers calls him "known litigation genius") of an amazing firm (what other epithet for a firm that wins 1078 out of 1175 trials) for putting pen to paper (or rather fingers to keyboard) in this way.

Gary Wingens of Lowenstein Sandler and Frank Burch of DLA Piper listen to Dan DiPietro of Citibank forecasting a tough 2008, at The Army and Navy Club in Washington DC during The Edge International Managing Partners Strategy Summit

Last week, my Edge International partner and friend Gerry Riskin and I hosted a very private, personal invitation only, Strategy Summit for the leaders of 10 law firms to explore:

•    key strategic issues facing law firms today

•    what law firms are doing to address these issues

•    what constitutes "best practice" in law firm strategy process

The managing partners represented firms ranging from the largest in the world (DLA Piper) to a tiny, brand new firm with a highly innovative business model (Valorem Law Group.) It was a truly fascinating two days of strategic debate and solution building.

On the facilitation / faculty side, we were joined by guests Dan DiPietro of Citi Private Bank’s Law Group and Michael Rynowecer, President of BTI Consulting Group in Boston. The venue was one of the most prestigious and historic venues in Washington DC: The Army and Navy Club, barely a block from the White House.

A publication is currently being prepared to communicate learnings from the summit for publication in February. Not everything will be covered. The summit included many candid exchanges between the managing partners, sometimes on quite sensitive issues. Arguably, this was by far the most valuable part of the summit. We have agreed that the managing partners themselves will be the final arbiters on what gets published and what does not.

Thank you very much to the managing partners that participated. In alphabetical order, they were:

Charles P. (Chuck) Adams, Jr., Managing Partner, Adams & Reese
Francis (Frank) Burch Jr., Joint Global Chief Executive Officer, DLA Piper
Nicolás Herrera, Managing Partner Guyer & Regules (Montevideo, Uruguay)
R. Steven Kestner, Executive Partner, Baker & Hostetler
Patrick Lamb, Chairman, Valorem Law Group
Don G. Lents, Chairman, Bryan Cave LLP
Christopher Marston, Chief Executive Office, Exemplar Law Partners
Keith Vaughan, Managing Partner, Womble Carlyle Sandridge & Rice, PLLC
Mark D. Wasserman, Managing Partner, Sutherland Asbill & Brennan (substituted for by Executive Partner Tom Gick on Day 2)
Gary M. Wingens Managing Partner Nominee, Lowenstein Sandler

Each invitation was extended based on personal peer recommendation.  The event was not publicized beforehand.  Many of those invited could not attend, though, because of conflicts with their internal firm events, specially related to compensation given the time of year.

Given the very positive feedback from the participating managing partners, we will certainly host similar events in the future.  If you are interested in being invited and are willing to recommend other firm leaders with whom you would like to explore timely issues, please let me (email me) or my Edge partner Gerry Riskin know.

What can one learn about leadership from an angry mother-cow? Before you dismiss the notion as too "off the wall" even for Millard, ye who be serious-minded folk, consider the author: Dee Hock  is founder and former CEO of Visa USA and Visa International, now a $1.25 trillion enterprise owned by 21,000 financial institutions. So if he told me that there were lessons to be learned from angry mother inchworms, I'd still listen.

His article is titled The Art of Chaordic Leadership and it was published in Leader to Leader seven years ago. It's a darn good read. "Chaordic" is a term that Hock invented to describe forms of organization that are neither rigidly controlled nor anarchic; a hybrid form of consensus decision-making. If you don't have the time to read the whole article, at least click below and scan through his bullet points on chaordic leadership.

Interesting insights today into the strategy of the managing partner of a global law firm, in the British newspaper The Independent, with an interview with David Childs of Clifford Chance. The highlights:

• As the firm's chief operating officer, before being elected managing partner earlier this year, he shaved $75 million (GBP40 million) off the firm's cost base from 2003, requiring some "tough decisions."

• He notes increasing pressure from clients to reduce costs by moving mundane tasks to lower cost locations

• Top London firms have been more successful than US firms at growing internationals, although this has been at the cost of diluting profits compared to "New York's finest."

• Says Childs :   "The main issue for us is that there is a pack of leading international law firms. And while we are different because we have real depth of resource in the US, Europe and Asia, we know that will go over time. So the question is how one positions oneself ahead of the pack." The answer, he says, lies in continuing to build a global network that can help clients wherever they choose to do business.

• Hopeful that the situation in India (where non-Indian law firms are prohibited from practicing) will change soon

• Even given the pressures of his managing partner role, he continues to do some client work.

Further to my previous posting on succession planning and leadership in professional firms, I thought it would be useful to push the topic of leadership a couple of inches deeper. There is much around on leadership, ranging from pure wisdom to pure hogwash. Everybody from generals to psychologists to coaches to mountain climbers have their bit to say. But there are relatively few resources, I've found, from people that have both practiced and studied leadership deeply and comprehensively.

How do professional firms select their leaders?

A study undertaken by the Managing Partners Forum (MPF) earlier this year confirms that the way that law and accounting firms approach selection of leaders and succession planning is somewhat different to other organizations. The findings may well be true in many other professions, too. Yet effective leadership is critical to the success of a modern professional firm. The MPF study examined practices at a sample of 43 of the UK's top 100 law firms and top 50 accounting firms and aimed to "shed light on the degree of consistency at each stage of the selection process for managing partners (MP,) senior partners (SP,) and heads of business units (BU.)"

The results of the study are well summarized in an article titled Less Politics, Clear Rewards by Nigel Knowles (joint CEO of DLA Piper and chairman of the MPF) and David Pester (MP of TLT Solicitors.) The article was published in the June 2006 edition of Legal Business.

Roy Andersen is a man of many diverse talents. Besides being Chairman of the Board of South African insurance giant Sanlam and civil engineering contractors Murray & Roberts, as well as of the South African interests of Richard Branson's Virgin group, he also serves as a major general in the South African National Defence Force, where he commands the Defence Reserves for the South African Navy, Army, Air Force and Medical Services. He is a chartered accountant by profession, which all goes to show that one should never underestimate those that choose to arm themselves (primarily at least) with pen and pocket calculator! Being an artilleryman, this particular accountant's other weapon of choice would no doubt be be the G6 Self Propelled 155mm Howitzer!

Will Herman has a posting titled When To Tet Rid Of The "Best" People That Work For You, with some personal experience on handling the "900lb gorillas" that so many firms seem to have.

A 'sound-byte' :

"One of the problems I encountered more often than I'd like to admit took me a very long time to figure out. It's the problem of having one of the best people working for me in terms of performance to their assigned task also being a performance black hole for the rest of the organization. You know the type, they usually consume more of the manager's time than anyone else; they openly vent disagreements in direction or goals in a negative manner without regard to who's listening; they spend hours each day discussing all that is wrong with the company or group with people that are not as productive and, therefore, can't afford that time; and they completely ignore the impact of their natural leadership position by virtue of their high-performance and productivity."

Stephanie West Allen has a posting on her blog idealawg, that contains a link to whole suite of lectures (25 of them) given by Tal D. Ben-Shahar in his spring semester course at Harvard on the psychology of leadership. It is a quite remarkable series, but then Ben-Shahar did teach two of the three most popular courses at Harvard College that semester! The course is described on the Harvard site as follows:

"How can leaders - in the business sector, politics, or education - create an environment that facilitates growth? Topics include transformational leadership, personal identity, change, ethics, peak experience and peak performance, motivation, and systems thinking."

One of the characteristics of the leaders that really 'ring the bell,' is a thirst for knowledge and self-betterment that never dries up. There can be few areas where the need for top-rate skills is greater. I commend watching and listening to these lectures to anybody's personal self-education programme.

To link directly to the lectures, click here. (Ain't technology wonderful?)

IBM's recent study on the world's top corporate CEOs is, they say, the most comprehensive survey of its kind ever conducted. It polled 750 top CEOs worldwide. The study discovered that the majority of these global CEOs plan fundamental change in their organizations over the next two years, and expect new forms of innovation to drive growth.

Frankly, though, some of the results are worrying .....

Real-world decisions are not always made through logical steps, and often they shouldn't be. That's the startling conclusion reached by renowned strategist Henry Mintzberg, author of the landmark book The Rise and Fall of Strategic Planning and Frances Westley in an article in the Spring 2006 MIT Sloan Management Review, titled Decision Making - It's not what you think.

There's nothing new under the sun, so the saying goes. That's as true in change management as anything else. Of course IT has given us new tools to communicate and collaborate in driving change, but the underlying principles are constant. To illustrate, here's a quote from Niccola Machiavelli from his book on statemanship called The Prince, first published in 1512:

"There is no more delicate matter to take in hand, nor more dangerous to conduct, nor more doubtful in its success, than to set up as a leader in the introduction of change. For he who innovates will have for his enemies all who are well off under the existing order of things, and only lukewarm supporters in those who might be better off under the new."

This is clearly as true to the modern day strategist or change agent as it was 500 years ago. Here's another Machiavellian quote, perhaps more aimed at the strategist him/her self:

To judge the calibre of a leader, look at the behaviour of his or her followers. History is replete with even democratically elected leaders who had the "title", but were nothing of the sort. This is as true in professional service firms, where the dice are heavily loaded against leaders in the first place, as anywhere else. David Maister blogged about this recently, seizing several nettles that people often tiptoe around. The "fatal flaw," he says, is whether professionals even "want" to be led at all. He avers that few do, and many actively resist it:

"We want to be helped, we'll agree to be coached and (with careful definition of the term) we might consent to be managed. But we'll rarely agree to be led."

Ironically, I think this "fatal flaw" gets very close to defining what a leader might be (in a professional service firm or, I'd suggest, anywhere else in the known universe.) It also gives good guidance for measuring leadership effectiveness, in professional service firms and elsewhere.

Click pic to enlarge

Believe it or not, this is a map of California. No, it's not a futuristic map following a cataclysmic earthquake. It is actually several hundred years old (1662.) Stewart Black and Hal Gregerson used one similar to it in their book Leading Strategic Change as an illustration about times when there is too much wishful thinking and too little knowledge.

How the map came to be drawn that way has as much relevance for 21st Century professional service firm strategists as it did for 16th Century explorers.

I have just read a posting on David Maister's blog that is undisputedly the best piece on the topic of leadership in the context of professional service firms that I have come across in a good long while. It's called Dangerous Rubbish About Leadership and it's really solid stuff! (You'll also understand my somewhat weird choice of graphic for this posting once you've read it.)

Religious conviction; the national Treasury; a firm handshake: all symbols of trust that evoke expectations. Most importantly: the expectation that one will not be betrayed. If there is one place where trust is paramount, it is in firms that practice professions such as law, accounting and consulting, where the service being delivered is so intangible that trust is the only assurance that the client has, that its work will be done properly. Small wonder that trust-based relationships both with clients and internally are the very cornerstone of the cultures of such firms; certainly those at the 'top of the curve.'

The March/April edition of the Harvard Magazine contains an article on the differences between risk aversion generally and aversion to being betrayed. It makes fascinating reading and, I think, introduces a seldom-considered facet to the process of strategy.

Surely the most dramatic mythological example of rebirth and renewal, is the Phoenix (or "Firebird.") It is found in ancient Egyptian mythology, various myths derived from it and, most recently, in Professor Albus Dumbledore's study in Harry Potter.

Said to live for 500, 1461 or for 12594 years (depending on the source), the phoenix is a bird with beautiful gold and red plumage. At the end of its life-cycle the phoenix builds itself a nest of cinnamon twigs that it then ignites; both nest and bird burn fiercely and are reduced to ashes, from which a new, young phoenix arises. The bird was also said to regenerate when hurt or wounded by a foe, thus being almost immortal and invincible.

Imagine, for a moment, that you were able to regenerate your firm in this way. Miraculously, you were able to instantly transform it into an organization of the highest performance with, what's more, that performance being sustained.

It's a little known fact that back in 2002, the US Military went through a major war game exercise to model what a war between the United States and Iraq might look like. The exercise, Millenium Challenge, took two years to plan and cost $250 million, involving some 130 000 troops and very sophisticated computer modeling. And the USA lost!

Lieutenant General Paul Van Riper, formerly the Commanding General, Marine Corps Combat Development Command, Quantico, VA, played the role of the enemy commander; "a crazed but cunning megalomaniac ruling a militarily powerful Middle Eastern nation." In the opening stages of the exercise, using the element of surprise and highly unorthodox tactics, Van Riper's forces sank most of the US fleet in the Persian Gulf and brought the entire offensive to a halt. It was indeed fortunate that when the real war started, Saddam Hussein did not have a Van Riper commanding his forces.

Those that regularly read my material or work with me will have noticed a common thread. Strategy, I firmly believe, must focus on making firms resilient to the unexpected. The world we live in is too complex and dynamic to plan for all eventualities. Even following detailed scenario analysis, unforeseeable events inevitably arise.

One of the new terms that the war on terror has introduced to the strategists lexicon, is the 'black swan.' Nassim Taleb, writing in the New York Times (free registration required) defines this as "an outlier; an event that lies beyond the realm of normal expectations." Most people [except Australians, of course, where real black swans are common] expect swans to be white. Their experience tells them to. "A black swan is, by definition, a surprise." Today's world, clearly, is more full of surprises than ever before.

If there is one blog that any thoughtful observer of the economics of law firms needs to add to his aggregator, then it is Bruce MacEwen's ongoing discussion on that topic, Adam Smith Esq. I am delighted to have been able to hook up with Bruce for coffee twice in the last week or so as I passed through New York, once westwards and then again back eastwards. His philosophy on blogs, that they should be a channel for carefully formulated, useful commentary on matters of importance in one's topic, corresponds exactly with mine. You will never hear from either of us what we thought of a recent movie, the current sports or social happenings, or such trivia.

One of Bruce's most recent postings on the new chairman at Shearman & Sterling, and what that great firm might do to boost its profitability, is a case in point. As is his posting How Do You Know If The Troops Got The Memo, which deals with another important emerging aspect of professional service firm strategy, namely social network analysis.

At the time that Montgomery took over command of the Allied 8th Army in North Africa in mid 1942, it was almost completely demoralized. Superior in manpower, technology and tactics, Rommel's Afrika Corps had dealt it blow after crushing blow. The 8th Army was sitting astride an area called El Alamein, astride the main road from Libya and Tunisia to Cairo. The next tactical move, it was widely expected, was a retreat to Cairo and defeat in Africa. This was not to be.

None of his expeditions achieved their objective, yet he is recognized as one the greatest leaders ever. In 1914, he set sail in the Endurance, intent on being first to reach the South Pole. What followed was utterly astounding...