We all know that the legal profession has changed dramatically over the past two decades, resulting in a new set of challenges that yesterday’s firm leaders never had to confront. There’s an oversupply of lawyers. More demanding and less loyal clients. More demanding and less loyal partners and associates. Staggering advances in technology. Tort reform in many jurisdictions. Skyrocketing operating expenses. Mergers and acquisitions and unprecedented competition. Certainly these and other trends have created tremendous pressures for law firm leaders—who must change the way they operate if their firms are to remain viable in the long run.

Yet most aren’t keeping pace. In the midst of all the change, far too many firms haven’t changed much at all. They run essentially the same way they did 20 years ago—like loose confederations of solo practitioners sharing office space.

Why? According to nationally known lawyer-psychologist Dr. Larry Richard and his groundbreaking research on the subject, most lawyers hate change. They also love autonomy and resist rules and structure. They have little patience and want immediate results. They don’t like risk and shun the unknown. So for many firms, it’s easier just to leave things alone.

On the other hand, some firms “get it.” These firms are fundamentally changing the way they do business, with streamlined governance, standardized systems and procedures, strategic plans, and marketing and business development programs. They enforce minimum performance standards for partners and associates. Many are also divesting themselves of low-profit clients and practice groups. They are deequating underperforming shareholders and asking disruptive lawyers—even those with big books of business—to leave. These firms are emerging as the front-runners in the market because their top levels of leadership have the moxie and vision to make change happen.

The Firm Leader as Change Agent

In today’s most successful law firms, the role of managing partner has evolved significantly, from that of a “caretaker” trying not to rock the boat to that of a dynamic consensus builder and change agent. Today the managing partner is the CEO of a multimillion-dollar entity in a rapidly changing industry and needs to exercise critical leadership skills to set the example for leaders at all other levels of the firm and thus ensure the organization’s success.

Of course, knowing that you need to set the course to success and actually doing it can be difficult, given the press of countless to-dos firm leaders tackle every day. Consider this: Last year TheRemsenGroup surveyed more than 170 managing partners from firms ranging in size from 10 to 2,200 lawyers. Of those firms, 60 percent had more than 50 lawyers. When they were asked what their most important contributions were in their roles as managing partner, building consensus among shareholders and initiating change topped the list of responses. In contrast, when asked where they spent most of their time, day-to-day administration ate up way too much of it.

We also asked if these managing partners had a job description: 74 percent did not. In addition, 76 percent did not have a clearly defined exit strategy.

What can we take from this? Too many leaders at the top levels of law firms are winging it.

Steps to More Effective Leadership

A successful firm leader must be a visionary, a communicator, a negotiator, a coach, a disciplinarian, a cheerleader and a psychologist all wrapped up in one person. Needless to say, it’s not an easy job, especially when you add management responsibilities to the mix.

There are, however, steps that the top levels of firm leadership can take to enhance their effectiveness and improve the performance of their organizations. Here, in a nutshell, is the guidebook. 

• Codify the Top Leader’s Job

Every managing partner should have a well-defined job description. It should set forth the primary responsibilities of the position, the amount of time required, and how the partner will be compensated for his or her nonbillable contributions. Also, it should account for the fact that a managing partner’s time should be spent mostly in the areas of planning, communication and consensus building. Day-to-day administration functions should be delegated to a capable administrator.

• Appoint Strong Group Leaders

A firm needs strong leadership at all levels. Unfortunately, departments and practice groups are too often led by the most senior lawyer or the lawyer with the biggest book of business when, in fact, that may not be the right person for the job. Passion, commitment and leadership skills are required for these important roles. To help ensure the right people are put in the right positions, department heads, practice group chairs and branch office managing partners need job descriptions, just like the managing partner does.

• Develop a Firmwide Strategic Plan

The evidence is clear. Firms that have plans outperform those that do not. Planning helps to bring everybody onto the same page, sharing the same vision for the future. Firm leaders have to embrace and encourage the planning process and the plan’s implementation at the firm, practice group and individual lawyer levels.

• Build a Firm-First Culture

Leaders should always encourage and reward a “firm-first” mind-set and attitude among all the firm’s members. There are a variety of ways to do this, including through compensation mechanisms, but even simple steps can prove very effective. For example, insist on the term “our” clients instead of “mine” and “yours.” Leaders must do everything possible to promote trust, teamwork and fairness within the firm.

• Lead by Example

Managing partners and practice group leaders cannot be hypocrites. They must “walk the talk” by being first in submitting their individual marketing plans, getting their time records in, mentoring younger colleagues, returning client phone calls and otherwise setting the standard for everyone in the firm.

• Invest in the Future

According to LexisNexis’s 2007 Juris Law Firm Economic Survey, the top performing and most profitable law firms spend more per person than underperforming firms do. They are investing in the future. The lesson: Resist the temptation to enhance profitably through cost cutting. That’s a short-term fix. Profitable firms look at long-term impacts.

• Groom Successor Leaders

The best leaders are wise enough to identify and mentor a successor for their roles. They give that person important, high-profile assignments so that the firm’s people gain trust and confidence in the successor’s leadership skills well before the torch is actually passed. In addition, managing partners in particular should have a well-defined exit strategy that is communicated to all shareholders.

• Be Passionate

They sure don’t teach much about leadership in law schools. But that’s not an excuse for failing to strive to be the best firm leader you can be. There are many intricacies involved in steering a firm toward top performance in times of change. To learn more about them, you should attend leadership conferences and ask your firm for training. Read books and articles. Learn from other managing partners and practice group chairs. It’s important for leaders to demonstrate that they’re devoted to excellence. -After all, if the leader isn’t committed, there aren’t likely to be many followers—and the firm will stagnate as a result. Those firms with strong, passionate and committed leaders, on the other hand, will emerge as the most successful law firms of the future.