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Law Firm Management

Do Lawyers Suck at Business?

I am of the opinion that, generally speaking, lawyers are not particularly good businesspeople. I attribute this to the following:  

  1. Lawyers often have little formal education in business. In fact, they often choose law because they see it as an alternative to going into business, instead of seeing it for what it is, which is a particular type of business.
  2. Law schools do not teach much about business.
  3. The Law Societies do not require lawyers to know anything about how to operate a business, beyond trust accounting.
  4. Like doctors and dentists, lawyers frequently think that other disciplines do not require nearly as much intelligence as their own profession. So, they think that they are smart enough to run a business without any education or experience in that discipline.
  5. While they lament the idiot clients who choose a lawyer based on price, that is exactly how they frequently choose their office managers, human resources advisors, technology consultants and other service providers.
  6. Rainmakers and high billers think a great deal of their own intelligence and other lawyers give them way too much deference and allow them to manage their firms without much regard to their business acumen.
  7. In law firms, there is a tendency to focus on this year’s billings and compensation, but not so much about where the firm is headed over five or ten years.
  8. The lawyers who yell the loudest at partners meetings tend to get their own way.
  9. Partners do not like spending money on things that do not impact the current year’s profitability such as training, mentoring, technology upgrades and disaster planning.
  10. They are too busy to worry about things like employee morale, benefit plans, and the career aspirations of their associates and employees.
  11. They have healthy egos which result in them saying, “Look at me” much more often than they say, “Look at us.”
  12. They tend to politic to improve their own position more often than they advocate for other stakeholders.
  13. They usually focus on creating personal goodwill instead of firm goodwill.
  14. They are not great believers in the importance of the so-called ‘soft’ skills.                                            
  15. They tend to take on every piece of business that is offered to them instead of creating and implementing criteria about what type of client they want to work for.
  16. They hand out titles such as ‘Managing Partner’ or ‘Practice Group Leader’ to people who excel at rainmaking and billing instead of to people who excel at working collaboratively and managing teams.
  17. Partners tend to tolerate bad behaviour from people as long as they generate high numbers.

Let me know if you agree or disagree with my premise and whether you would add or subtract anything from my list.

2 replies on “Do Lawyers Suck at Business?”

I would say that there is a tendency among legal professionals to work hard (keep your head down and just to billable work) rather than smart (innovate ways to do the work more profitably and feed the pipeline of work). Very few of the larger firms impose a business development target for associates until about a year or two before partnership.

That all sounds right. Some of the big firms do not want the associates doing business development, both because it distracts from the billable work and because they don’t want the type of work that junior people can bring in. In any event, if you are billing 1,800 to 2,200 hours, where are you supposed to find the time to market your practice?

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