What’s more successful, an estate planning law firm run like a democracy, one that uses flat management or a dictatorship? It’s fair to say that many firms incorporate a combination of styles and that at varying times, different management approaches may be more effective. But is a combination the best answer when it comes to profitability, effectiveness and growth?
Many forward-thinking sectors, particularly technology companies, are based on what is known as a “flat” management style. There are few or no levels of middle managers between the staff and higher ups and employees take a more active role in decision making. It may be a long time before law firms turn to the flat management model.
Associates, even those who are several years out of law school, are not likely to have the business acumen required to run law firms, regardless of their size. On the other hand, and at the risk of generalizing, a younger attorney is more likely to be open to new technology and marketing strategies that fuel today’s law firm growth.
Here’s the problem with an ad hoc combination of management styles: the inconsistency creates confusion. If one person is in charge of big decisions one week and then, smaller decisions are made by another person the following week, then who makes the decision on week three?
We’re all in favor of democracy, but in a law firm it may prove problematic. The biggest reason: unless the law firm has made a commitment to financial transparency that gives all members of the firm a full opportunity to see how their decisions impact the bottom line, it will be difficult for them to understand the short and long term ramifications of decisions.
If the firm leadership has a clear vision for the firm that extends five or ten years (and they should), will a member who has only been at the firm for two years who may or may not plan on staying at the firm have the same perspective? Not likely.
The size of the firm can have a big impact on whether or not a democracy works. With twenty partners, an executive committee and a chairman, whose vote counts more?
Our thoughts: the organizational structure is secondary to the leadership. A strong and decisive leader knows when to allow equity partners to be part of the decision making process and when her vision for long-term growth is being undermined by petty factions. The bigger question may well be this: how do you handle the politics of your firm?