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Partners are 'bottlenecks to change' in law firms

Lawyers find 'lots of reasons not to make a decision', says Steve Billot

24 July 2015

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By Manju Manglani, Editor (@ManjuManglani)

The biggest challenge facing law firms today is the inability of lawyers to make business decisions.

That's the view of Steve Billot after having conducted more than 300 reviews of law firms in the past five years.

"The bottleneck to change in law firms is partner decision-making," the managing director of Duff & Phelps' global restructuring advisory practice told Managing Partner.

"Lawyers just don't make good decision makers. If you ask them for advice, they will tell you what not to do, rather than what to do."

A big part of this comes down to the professional liability attached to the role and the risk of clients suing them for giving poor advice.

However, partners often fail to recognise the need to have a different mindset when it comes to making business decisions on behalf of their firm.

"Lawyers tend to assess business decisions in the same way that they do a legal puzzle," he said.

Instead, they need to take a more commercial approach and be prepared to take risky decisions for their firm.

"Lawyers are fearful of making a commercial decision and of getting it wrong - they will find every reason not to do something," he said.

"And, if things do go wrong, they will be faced with their fellow partners saying 'you got it wrong'."

The problem is exacerbated by having a diverse and intergenerational group of partners with different levels of risk awareness and risk appetite.

"Add to this the 'group think' mentality and you have a group of lawyers finding lots of reasons not to make a decision."

This fear of making the wrong decision can often stymie innovation in law firms and put them at a competitive disadvantage to those with professional managers or non-executive directors.

"It stops firms from making commercial judgements for fear of getting it wrong," he said.

"But, taking risks is a big part of business and if you aren't prepared to make mistakes, you're stuck."

 

 

 

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