Collect Your Fees or Collect Your Belongings

The ongoing Dewey & LeBoeuf trial provides endless fodder for observing dysfunctional organizational behavior. Today's commentary was prompted by the quotes attributed to a former Dewey partner in response to nagging from a collections clerk. The partner had apparently missed his monthly collections target of $1.6 million and didn't appreciate being hounded.

"I am the reason you have a job. You obviously have no clue about what is appropriate. I am going to talk to [the Chief Operating Officer] and insist that you be fired if you ever send me an email or call me again. If he does not, I will seek other opportunities at a firm that gets it."

What exactly is a firm that "gets it?" One that allows partners unfettered access to firm resources without demanding anything in return, such as revenue? One that allows a partner to speak and act like a schoolyard bully to a staff person doing her job? One that allows a shareholder to meddle in day-to-day operational affairs, such as the acceptable age for receivables, how our collections clerks should handle their responsibilities, and who gets fired? And exactly what is he threatening? "Don't make me collect my fees, or I'll quit... and forever absolve myself of all responsibilities to collect these fees." We get it. You don't like to collect your fees. Who does? Well, in fact, many do.

Photo: ©iStockphoto/Taphouse_Studios

I've shared this thought with numerous law firm partners: If you are routinely discounting fees or failing to collect your billed fees, one of two things is happening. Either your clients do not believe you're worth the fees you charge, or YOU do not believe you're worth the fees you charge. Actually, it's probably a bit of both.

Every so often, I think it's helpful to offer a bit of tough love to partners who think their accomplishments give them free pass to act however they want, even when their actions are harmful to the business. Allow me to dust off my former CEO hat and offer my contribution.

• If you act like an asshole, you should be fired. Point me to one firm, anywhere, ever, where a perpetual asshole was shown the door and the law firm collapsed. It doesn't happen. We're all replaceable. Being a schoolyard bully to a lowly staff person is easy. Collecting your fees is evidently hard. So if you want to prove you're all that, then collect your fees.

• The top dog rainmaker isn't the reason everyone else has a job. In fact, it works both ways. The top dog rainmaker looks good because there are many people marketing the firm, managing key client relationships, managing firm operations and infrastructure, and doing the legal work necessary to satisfy the client that you brought in. Also, the firm exists because of the efforts of many others who built the brand and paved the way for you to get a job here. Your success wasn't inevitable; it was a result of an extraordinary team effort. If you don't like, or can't understand, the team approach, collect your belongings and leave. If you think you did it all on your own, then go form your own one-man firm and prove you can compete.

• Many partners are not 100% utilized. Many partners do not bill 100% of the time they capture. Many partners offer discounts that erode profitability. Many partners rewarded for billing time do not fully exploit leverage to improve firm profitability because doing so will reduce their hours. Many partners cost too much for what they generate. So after all these deductions to the firm's profitability, when you have the nerve to refuse to collect whatever discounted fees the client has agreed to pay, you are willfully engaged in a conspiracy to screw your colleagues out of rightfully earned compensation. You benefited from a plush office, the firm's powerful brand strength, and all of these lawyers and staff being paid to work on your matters before you collected a penny. Collecting your fees isn't a favor you're doing for the rest of the firm, it's your rightful obligation. If you can't stomach asking clients to pay for your work, then you have abdicated your fiduciary duty to the firm and you have no right to be an equity shareholder.

• Law firms often adopt the partnership model as a business form for its tax, liability, and profit-sharing benefits. But let's be clear: operating as a partnership doesn't convey day-to-day management responsibilities to every shareholder. If you want to engage in firm management, step up and volunteer or run for office. Otherwise, leave firm management to others. If you don't like the firm's collections policies, or business development team, or IT services, or secretary ratio, or compensation plan, or the color of the logo, then communicate these concerns to those in charge and then go practice law. Or start your own firm where you can make all the decisions, drawing on your substantial expertise running a business... though if your insight into collections is any guide, your career as a titan of business will be short.

Law firm senior leadership and practice group chairs, if you're not having this conversation with your partners who fail to collect their fees in a timely manner, then you should question whether you're cut out for your role. A law firm is a business. If every partner is allowed to choose which policies they will follow, you're not running a business, you're operating a holding company of independent contractors sharing a logo. Your failure to establish sound policies and to hold everyone accountable means shareholders are losing money and compromising the quality of the legal services delivered to the clients. Is it any wonder why clients are dissatisfied and seek alternative approaches to addressing their legal needs?

Timothy B. Corcoran is principal of Corcoran Consulting Group, with offices in New York, Charlottesville, and Sydney, and a global client base. He’s a Trustee and Fellow of the College of Law Practice Management, an American Lawyer Research Fellow, a Teaching Fellow at the Australia College of Law, and past president and a member of the Hall of Fame of the Legal Marketing Association. A former CEO, Tim guides law firm and law department leaders through the profitable disruption of outdated business models. Tim can be reached at Tim@BringInTim.com and +1.609.557.7311.

On Bullying

It's a relatively simple mathematical calculation to quantify the negative impact of bullies in the workplace, yet managers in organizations everywhere allow toxic behavior to persist. This week's object lesson comes from the NFL Miami Dolphins, where a professional athlete left the team due to persistent harassment and bullying.

While the full story is not yet known, there are certain unassailable facts: at least one protagonist with a long record of impulsive behavior has acknowledged coercing a teammate into contributing funds to a Vegas vacation, directing ethnic and homophobic slurs at this teammate, and engaging in physical and mental abuse, all in the spirit of hazing -- a long and misguided tradition of veteran players "riding" younger players. The protagonist is not merely a veteran teammate, he's also on the team's leadership council.

There has been a large public outcry leading to the suspension of the protagonist, the victim hiring a lawyer, and the team owner demanding a full investigation. Sadly, but perhaps predictably, the segment of sports punditry comprised of retired athletes has defended the protagonist thusly:  One can't possibly understand what goes on in a locker room unless you're part of the team; the victim walked out on his team during a competitive season, thereby revealing his true character; and the protagonist's actions were merely "boys being boys."

One retired coach called the victim a "baby" and waxed philosophic about "Back in my day when men were men..."  Others accused the victim of gamesmanship, suggesting his failure to report these allegations earlier and his supposed camaraderie with the protagonist demonstrates disingenuousness. In response, the victim acknowledged a fear of retaliation and the loss of his livelihood as reasons for not stepping forward earlier. We'll learn more as this story unfolds, but we know enough to recognize a hostile work environment. Why? Because nearly all of us have witnessed such bullying in our own workplaces.

In the corporate sector, the toxic personality often takes the form of a top-producing salesperson who breaks the rules, fails to properly document activity, over-commits the organization to meeting a client demand, and then bullies colleagues into delivering the impossible because, as the old saying goes, "nothing else matters until we make a sale."

It can also take the form of a long-entrenched manager who has watched leaders come and go, who has watched strategies come and go, who has watched competitors come and go, and all the while she's tending to the company's day to day needs. She truly believes her steady hand on the rudder is the primary driver of organizational success in an ever-changing marketplace, and so when presented with new and uncomfortable ideas her knee-jerk reaction is "We've tried that before and it didn't work. Next!"

In law firm land, the corollary is the toxic partner, that rainmaker bringing in millions in billable hours, or the long-established patron of the corner office whose reputation is unassailable and who can do no wrong. Whether the partner cycles through secretaries like others change their socks, or metes out punitive assignments to associates who fall out of favor, throwing tantrums in the office when the staff fails to read his mind or demanding that others adhere to stringent work requirements out of some vague allegiance to client service, these actions constitute a hostile work environment.

Worse, if the toxic partner is acting under the delusion that such actions will improve team performance, she or he is assuredly provoking the exact opposite outcome. We've all seen the feel-good movies where a tough-as-nails but kind-hearted leader drives his team to victory by forcing everyone to reach deep inside, to unlock that extra courage, to go that extra mile. And there's some truth to that, of course. Any coach knows that even high performers often need external motivation to break through barriers. But how much is too much?

The underlying math in any organization is simple, requiring us to balance the revenue generated with the costs incurred. But too often we fail to complete the equation, focusing solely on the revenue side. So the rainmaker generating millions of billables earns a free pass, or perhaps only an occasional private "talking to" when his conduct falls too out of line. But when we factor in the victims' lost productivity due to distraction or emotional detachment, the cost to continually recruit and train replacements, the sub-optimal work product that results from star performers avoiding collaboration with the toxic partner, the client defections, and more, this "total cost of ownership" will invariably tip the scales in the other direction.

There is NO financial reason to perpetuate a hostile work environment. There is ALWAYS a long-term loss in revenue and profit when such a situation is allowed to persist.  If you've done the math and somehow produce a result that says otherwise, I challenge your approach.

There are protections in place for whistleblowers for a good reason: people often won't speak up for fear of retaliation, because they fear the loss of their income and job security, because they feel they'll be shunned by colleagues for impairing the team's performance. Rather than discourage open talk, we should encourage it. If there's a toxic personality creating a hostile work environment in our workplaces, as managers and leaders we need to step up and address the situation directly and immediately. If you can't summon the courage to do so because it's the right thing to do, then take action because such an environment is unquestionably impairing the team's performance.

Why in the world would you take money out of your own pocket to reward some immature buffoon's temper tantrums or locker room behavior, when the alternative is to excise the annoyance and improve both morale and financial performance? Not every workplace has a toxic personality. But if you have one, or more, take action today.

Epilogue: The Miami Dolphins had a .500 record when the above incidents came to light, meaning their next game would literally put them on the path to a winning record or a losing record. The team lost its next game to a previously winless opponent.

Timothy B. Corcoran is principal of Corcoran Consulting Group, with offices in New York, Charlottesville, and Sydney, and a global client base. He’s a Trustee and Fellow of the College of Law Practice Management, an American Lawyer Research Fellow, a Teaching Fellow at the Australia College of Law, and past president and a member of the Hall of Fame of the Legal Marketing Association. A former CEO, Tim guides law firm and law department leaders through the profitable disruption of outdated business models. Tim can be reached at Tim@BringInTim.com and +1.609.557.7311.

My Cool Kids Are Better Than Your Cool Kids

Author and NPR commentator David Sedaris discussed the startling realization that the popular kids in his school were not universally popular:

"Call me naive, but it had simply never occurred to me that other schools might have their own celebrity circles. At the age of twelve, I thought the group at E.C. Brooks was, if not nationally known, then at least its own private phenomenon. Why else would our lives revolve around it so completely? ... But what if I was wrong? What if I'd wasted my entire life comparing myself to people who didn't really matter? Try as I might, I still can't wrap my mind around it."

When You Are Engulfed in Flames; Little, Brown & Company; Copyright 2008

A law firm managing partner recently asked me to meet and calm down a senior partner after his latest outburst over what he considered poor marketing practices. Apparently the partner is a BIG DEAL. Everyone knows him. Presumably his presence is one of the factors laterals and incoming associates consider when choosing whether to come on board. He's one of the top rainmakers. He's well known to both political parties and has been considered for high office several times.

Or so I was told by the marketer as we prepared for the meeting. I had never heard of him. I'm fairly knowledgeable about the legal marketplace, and his name meant nothing to me. Nothing at all.

The senior partner was as articulate and bright as I had been led to believe. He had a sincere desire to grow his practice. He believed that if the firm overall and the marketing minions in particular would simply act as he directed, his practice would thrive. The practice was doing well by any measure, except that in his view inferior firms with inferior talent were winning engagements that should come to him. Not only was this senior partner more accomplished than the competition (and arguably he was as good as he claimed to be) but the various General Counsel who had been hiring the competition were often his personal friends.

We quickly learned that the senior partner did not regularly reach out to his personal network. Many of his friends didn't explicitly know about his practice. Much of his practice consisted of referrals from past clients. And they appeared to be pleased with his work product. But he didn't land many of the noteworthy clients in the news who needed exactly what he offered.

To me, the challenge was simple. We needed to raise his profile. I was strongly encouraged not to express this opinion, because it would set the senior partner off on a rant. Furthermore, it was wrong. Everyone knows who he is! It would be an insult to suggest otherwise.

In troubled times like these, we need to really question our own rhetoric. It's perfectly fine for a senior partner at a large law firm to believe he's well known and popular, so long as he understands the practical reality that his popularity often extends only to the boundaries of his own "school." There are plenty of other schools and they have their own cool kids. So as the man once said, get over your bad self.

My advice to the senior partner: Work the phones. Reach out to your network. Author a blog. Write an article. Give a webinar. Deliver a speech to a trade association. Take specific, tactical action to inform your network about the work you do. Don't assume your prominence and popularity will automatically lead to new business.  To his credit, he turned out to be gracious in the face of my startling revelation that he wasn't universally recognized. He seemed to embrace my contention that the sheer weight of his impressive credentials won't, on its own, result in a deluge of work, but that by working his extensive network he could easily produce results.

Winning business isn't a high school popularity contest. And even if it were, it's safe to assume no one's ever heard of your high school. So go make some new friends.

Timothy B. Corcoran is principal of Corcoran Consulting Group, with offices in New York, Charlottesville, and Sydney, and a global client base. He’s a Trustee and Fellow of the College of Law Practice Management, an American Lawyer Research Fellow, a Teaching Fellow at the Australia College of Law, and past president and a member of the Hall of Fame of the Legal Marketing Association. A former CEO, Tim guides law firm and law department leaders through the profitable disruption of outdated business models. Tim can be reached at Tim@BringInTim.com and +1.609.557.7311.