Feature

posted 10 Jul 2003 in Volume 6 Issue 3

There but for the grace... Lessons learnt from the Clifford Chance memo

Last month, Managing Partner published the first part of an article examining the impact and lessons that can be learnt from the Clifford Chance memo, which was written by associates at the firm’s New-York office and was published in the international press towards the end of 2002. In this second part, Gerald Riskin, a principal at Edge International and a former managing partner, continues his lessons, focusing on the problems of the billable hour, the importance of communication, and the need to explore and enforce the firm’s values throughout the workplace.

Lesson 3: Manage the billable time

Who could argue with this reference in the memo:¹ “The idea that I could work hard all year and bill, for example, 2,100 hours...and, in the firm’s eye, I wouldn’t even meet the firm’s ‘expectations’ is totally ludicrous, offensive, and generally makes me crazy.” Again, targets (expectations) must be customised to individuals. Should there be generalisations on performance levels? Possibly, but general targets are meaningless by themselves because they allow excuses. Management must remove the excuses. Any individual can believe (if not argue) that their lot in life is different. Let me cite some further references in the memo:

“The 2,420 billable-hour requirement angers, worries and harries virtually every associate in the firm.

“Associates stated that the requirement is profoundly unrealistic, particularly in slow areas of the firm. Moreover, associates found the stress on billable hours dehumanising and verging on an abdication of our professional responsibilities in so far as the requirement ignores pro-bono work and encourages ‘padding’ of hours, inefficient work, repetition of tasks and other problems. Associates expressed concerns that the requirement promotes misallocation of work to senior associates who ‘need’ the hours when less expensive junior associates could do the work. Associates also stated that partners care only about associates’ billable hours.

“The requirement ‘makes me feel that management cares exceedingly about hours billed, but gives no thought to the quality of my work, let alone my career development’.”

Customising individual objectives and providing meaningful feedback either dispenses with excuses or allows then to be dealt with sensibly, either of which is far better than the perceptions that led to the Clifford Chance memo. By customising targets, the assignment issue is diminished, if not eliminated. Look at these sobering references in the memo to the assignment process:

“The assignment system is an ‘old boys’ club.

“The assigning process is largely a mystery and work seems to be doled out on the basis of favouritism.

“If the assigning system isn’t corrupt, ask yourself: why aren’t attractive female associates ever out of work?

“The firm feels ‘like a fiefdom’ or a loose confederation of independent states. One cannot take an assignment that does not benefit the feudal lord of his department.

“The whole business of getting assignments in litigation revolves around ‘schmoozing’ the people who can give you work. For me, the person I was expected to schmooze to get work on one of my cases is a snake. Not only is he dishonest, but he also behaves completely inappropriately with female associates working under him. I wasn’t willing to ‘schmooze’ him and missed out on a lot of good assignments.

“The new corporate rotation makes one associate in the class of 2001 feel like a ‘sacrificial lamb.’ Another class of 2001 corporate associates commented that the new programme ‘is particularly frustrating, given that partners sound genuinely committed to figuring out what the firm can do to improve our experience here, that at the same

time they are putting our entire year of corporate associates into an extremely difficult position while seeming to be oblivious as to what they are doing and how desperate many of us are becoming to get out of this situation as soon as possible. A good deal of this concern and desperately low morale could be relieved if we could get a true commitment on the option to try another group if we so desire after the first year... I understand by our third year we may not be the ideal candidates (from an economic standpoint) for a rotation, but this is our careers we’re talking about. The disadvantage to us if we are denied the opportunity to try an area in which we think we’d like to specialise is surely far greater than the disadvantage for the relevant product group in taking a modest hit...for a year on its balance sheet’” (emphasis in original).

“One corporate associate echoed the comments of many and said: ‘I think that something needs to be done about the accounting structure within the corporate group, whereby if a securities associate works for an M&A partner, the M&A partner does not get credit for the time billed by the associate. Thus, there is an enormous disincentive for the partner to work with this associate. Obviously, in a market such as this, the system makes no sense: because M&A is slow, associates should be able to work for other groups needing associates. Even more importantly, however, it is very disruptive to relationships between associates and partners and between associates and clients. Particularly with the M&A and securities groups having so much overlap and securities partners doing M&A deals and vice versa, to make a junior associate not only pick between the groups, but then, because of the accounting system, be almost guaranteed of being cut-off from the non-chosen groups and the partners/clients with whom they used to have relationships strikes me as being absurd’.

“Replace the anarchic assignment ‘system’ in litigation with a genuine structure that ensures that all associates get equal access to work. Numerous respondents to the surveys commented that the assigning partner in litigation appears to be simply too busy to handle the requests for work or for assistance, since he does not respond to them. Thus, some associates suggested having each associate in litigation complete a weekly status report.

“Other suggestions include: (i) having an assigning person for litigation and one for corporate who does nothing (except maybe reviews, see below) but manage associates’ work-load; (ii) a system where junior associates receive assignments only from the firm’s professional in charge of assignment distribution. This would ensure an even, fair workload for all junior associates.

“Associates have also suggested that the corporate department should adopt an accounting system more similar to litigation, whereby there is no internal accounting within the practice groups, or at the very least, eliminating such accounting between the M&A and capital-markets groups since even many of the partners in those two groups cannot clearly be pinned down to one group or the other based on their actual work and transactions.

“The combination of the billable-hour requirement and the lack of a functioning, fair assignment system leaves associates to scrounge and compete for work.

At least one partner has stated that this ‘system’ is desirable. The associates disagree vigorously and ask you to change it.”

This assignment issue is huge and exacerbated terribly by the general billable-hour goal. (According to the press, Clifford Chance New York has scrapped the goal. I wonder what kind of personal objectives have replaced it, if any. Removing that goal without replacing it simply leads to more uncertainty.)

Lesson 4: Give quality feedback frequently

The memo says: “The requirement [billing target] makes me feel that management cares exceedingly about hours billed, but gives no thought to the quality of my work, let alone my career development.”

The memo also says: “The associates believe the firm has zero interest in reviewing their performance and, hence, making them better lawyers.”

It says further: “Complaints over poor communication from partners to associates were widespread. Associates felt unsure of what the firm expected of them that year or over the course of their careers, or what the firm even expected of itself. They felt it was unclear if they would be fired unexpectedly. They felt unnecessarily kept in the dark about where the firm was going (both metaphorically and literally) or, in many instances, where the matter they were working on was going.”

I do not believe that partners do not want to give feedback. I believe they do not know how and some are afraid.

Law firms are typically environments in which you gauge how well others respect you by virtue of who is prepared to have eye contact with you. If you haven’t had any eye contact in three months, go ahead and accept the headhunters’ calls – you will need them when the firm gets around to firing you. Take your time though – the process takes years. Rest assured that associates (with whom no partner has eye contact) know that they will never become partner unless they attract a fortune top-ten company as a client in the nick of time.

When we got to the moon ahead of the Russians, there was one factor that stood head and shoulders above the rest. It was the ability to make course corrections quickly. There were so many calculations to do that NASA simply could not do them fast enough until they had computers that could do in ten minutes what a room full of good mathematicians could not do in a week. If NASA could not course-correct a moon mission within ten minutes they would miss their target by 200,000 miles.

So what about course corrections for associates?

To start with, feedback involves the negative as well as the positive. Most partners won’t give negative feedback overtly. I am not talking about being critical of the third paragraph in an opinion or being silent about a draft pleading and re-doing it without ever telling the associate, never assigning work to him again, or maligning him in front of your partners. I am talking about feedback that is organised by relevant category and includes praise and reinforcement for talent and effort and constructively suggests where areas of weakness can be strengthened.

If you made a hiring mistake and you need to correct it, by all means do so. This is not about keeping the wrong people. It is about helping those you think might be right for the firm in the long term get better and better.

Many assume that a lack of negative feedback means that everything is fine. Would great athletes accept coaching like that? Not for a minute. The “sink or swim” approach is just fine if you are such a wealthy firm that you can bribe anyone to join you, train over and over again, and are not embarrassed by leaked memos from those whom you tormented.

Remember the moon shot. One course correction per year is not enough, you need to course-correct at least quarterly or even weekly in problem situations. For those who are thinking: “You don’t understand, we don’t have time to manage our people like that,” there are two choices available:

Involve more people in the coaching process (even senior associates can help junior associates improve);
Be flexible and learn to marshal the necessary resources to get the job done.

Ironically, what I am suggesting is a return to the approach that was effective 50 years ago. The only difference is that most firms – even the brand-name, blue-chip ones – were tiny enough for quality interactions to happen spontaneously in the hallways and offices. Few associates were orphaned or could hide. Partners would chat about every associate because the small numbers were such that once the process was started it seemed natural to go all the way down the list.

Today, there are managing partners who are naive enough to think they can manage by memo, by firm-wide targets and/or by generalities. That is science fiction and bad science fiction at that.

Lesson 5: Communicate, communicate, communicate

The memo says: “Complaints over poor communications from partners to associates were widespread. Associates felt unsure of what the firm expected of them that year or over the course of their careers, or what the firm even expected of itself. They felt it was unclear if they would be fired unexpectedly. They felt unnecessarily kept in the dark about where the firm was going (both metaphorically and literally) or, in many instances, where the matter they were working on was going. The surveys indicate that associates feel that partners have little interest in talking and even less interest in listening. The associates depicted partners as aloof.”

Communication is encouraged through the management of individuals as well as the associate meetings referenced earlier. Those may not be enough, however. Management may have to work hard to ensure that much more communication occurs. It will never be good enough – but it can get a lot better.

Lesson 6: Explore your values and enforce them

The memo lists the following associate comments:

“The partners ‘hate’ the associates.

“The partners deeply resent paying the associates’ salaries and bonuses.

“Some partners have lashed out at associates because of Am Law survey results.

“Being yelled at and told ‘we own you’ was also a winning moment.

“I remember one instance where a partner introduced himself to an associate at a drinks party not realising that the associate was (a) in his group and (b) had worked for him for three years!

“ Another associate was invited to a partner’s party, then asked by that same partner what he was doing there.

“ One associate wrote in a personnel-committee survey that if he could change any one thing at the firm it would be many a partner’s attitude and manner of approaching/working with associates, but that’s impossible. They don’t seem to really care here.”

I highly doubt that the associate observations here reflect the predominant partner view. However, behaviour is being tolerated that allows the associates to think so.

Some firms have the equivalent of an ombudsman or trusted committee (selected by the associates) to whom sensitive complaints can be made anonymously and where action will be taken.

Note this reference in the memo: “About one-third of all respondents referred in one way or another to the lack of a grievance mechanism. Many associates either do not know to whom to turn or do not trust the person in charge of a particular issue.”

To put it bluntly, no partnership can afford to allow a few of its ranks to abuse the associates. It is too costly in human terms as well as financially. People have choices at least from time to time and when they do, abuse-tolerant firms will suffer.

The memo is desperately trying to convey that if you choose to do one thing to improve partner-associate relations, it is to at least say hello in the hallways. It sounds like a small thing, but it is about simply talking and getting to know the associates.

Lesson 7: Train your people

This isn’t a “nice to do anymore” – it’s essential. Look at these references in the memo:

“Absent partners cannot provide informal training.

“Ways exist to train associates. Even if they cannot bill the time, include associates on calls and bring them to meetings. You should also encourage us to use pro-bono matters to foster legal skills.

“We find it ironic that a British firm ranked last in training. Some of the more junior associates and laterals chose to join the firm exactly because the British influence would encourage training. It appears that we were wrong.

“In addition, associates believe that many partners have abdicated their responsibility for associate training or even for managing associate life.”

Lesson 8: Your associates are on your side

Remember, even if they have concerns, most associates want you to win and they want to win with you. The following reference in the memo supports this contention:

“Thank you for reading our memorandum. We hope that you will reflect on the associates’ concerns. Please remember that the driving force behind this memorandum was the associates’ conviction that we can build the finest law firm in the world and move from worst to first.”

In conclusion, if you come at this with optimism and a positive attitude and trust your associates (initially overlooking the risk of there being a bad apple or two in the barrel), the rewards that await you are substantial both in non-financial terms as well as financial.

Have the courage to invite your associates to explore these issues with you. Make your firm a happy family. Happy families can be high-achieving, demanding environments where trust and loyalty abound.

Reference

The memo was: “TO New York Partners, FROM cc New York Associates, RE Associates’ Concerns, DATE October 15, 2002”

Gerald Riskin is a principal at Edge International. He can be contacted at: riskin@edge.ai.