Is firm culture a recipe for success or an excuse for failure?

By Julious P. Smith Jr, Chairman Emeritus, Williams Mullen

Many law firms regard firm culture as their most cherished asset. Depending upon the age of the firm, it rivals even the library in value. However, in many cases, it is more of a link with the past than a bridge to the future.

But, what represents the fabric of the firm and what represents an effort to hold onto outmoded attitudes and practices?

In his History of Williams Mullen, my late partner, Bob Eicher, said: “A firm’s culture is difficult to describe. Like beauty, it lies in the eye of the beholder”.

Bob recognised the difficulty of putting a precise definition on the elusive concept of culture. His view shows the latitude that most firms give its members to assign their own definition of culture. As a result, many firms shoehorn bad decisions under firm culture rather than acknowledging them for what they are.

Firms reject mergers and forgive delinquent timekeepers, ignore requirements regarding write-offs and write-downs, and debate assignments of assistants (aka secretaries), all in the name of firm culture. Should the vessel hold all of these fairly mundane decisions, or should firms come to grips with what should be part of their being?

What is firm culture?

Firms talk a lot about their culture. Unfortunately, they often expand the definition to defend anything their members want to do or, more frequently, that they don’t want to do.

Firm culture should be about who, not how or why. It should be about who the firm is, what its core values are, and what its members believe. It should not be about how it conducts its business.

To be successful, firm members must understand their culture and differentiate it from resistance to change and poor business decisions. They can then build on that culture and try to live it everyday. They can protect it and pass it down from generation to generation.

On the other hand, if firms want culture to be an excuse for failure, they can use it as an obstacle to change and as an excuse for both poor business practices and a lack of productivity.

I have heard many smart people say: “Working a lot of hours is just not part of our culture”. That may very well be, but the firm tolerates unproductive people as a choice, not as a culture. In this situation, the ‘c’ in culture is a synonym for control. Lawyers want to keep control, or their vision of it, rather than do what is best for the firm.

Ultimately, successful firms must understand the difference between culture and business. For example, the methodology of making partnership – the vote required and the performance to earn that vote – would fall under firm culture.

Partners’ interactions with each other, their staff, associates and paralegals present great examples of firm culture. Partnership compensation bridges the gap between culture and business. The methodology of compensation is at the heart of most firm cultures.

Firm culture should not intrude upon how a firm makes its business decisions. Most firms began as small partnerships. As such, all decisions were made by the partners. Gradually, those decisions landed in the hands of a few and executive committees were born.

As firms grew and decision-making requirements became more urgent and important, many firms gravitated toward a corporate form of governance. That does not mean their firm culture changed: just the way they did business.

Recently, I overheard a managing partner say that he avoids exploring merger opportunities because he fears a negative impact on firm culture. This merely indicates a lack of confidence in his firm’s culture. Getting larger does not sacrifice firm culture. As long as the firm realises that it is merging people, its culture can survive and flourish.

Preserving strengths

Ultimately, each firm must answer this question: “Do we want to practice law with these people?” If the answer is yes, then firm culture will be preserved. Will there be changes? Certainly, but those changes need not impact upon core values.

At the end of the day, strong firm cultures and well-run businesses are not mutually exclusive. Firms need to work as hard at being good businesses as they do at having good cultures. Firms that maintain who they are but change how they do things will be stronger and more successful, with a deeper culture.

Firm culture should not preclude profitability. It should not mean that the firm cannot attract top-notch lawyers and encourage them to have a thriving, productive practice. Most of all, it should not mean that the firm cannot continue to change as the times require.

Cultivate and cherish firm culture. At the same time, understand and embrace the changes that need to be made to have a successful business.