I tell this personal anecdote as a way of urging you to read this Harvard Business Review piece on this very topic.  Next time you're facing a decision:

• Make sure you understand the logic, not just the emotions, behind your decision.
• Specify what your assumptions are, then stress-test them; do they hold up?
• If you're unsure, collect some pertinent data; try to confirm or disprove them.  (This is hard, like playing both white and black in chess against yourself—you can't tilt in favor of one or the other subconsciously.)
• Consider the decision from different perspectives:  Is it really a zero-sum context?  What if you tried to offer more to get more?  Etc.
• Never forget that human beings are involved, and that they will react dynamically, not statically, to what you're contemplating.
• Lastly, consider both the short and the long term.  This is another way of saying that you have to ask not just, "What?" but "What then?"  And "What then...?" 

It shocked me to experience how passively I used to absorb information.  And now that I'm an "active" reader, I'm hungry to get better yet.  You probably are, too.

I don't know about you, but I can't wait.  For what?  For the results of Legal Week's survey of the intentions of the top 50 UK firms regarding conversion to LLP status to come true:

• 14 of the top 50 have already converted;
• 28 of the remainder either have firm plans to do so or have it "under review;" and
• only 3 report they have "no plans" to do so.

Why does this matter? 

Let's separate cause from effect.  The cause of the wholesale conversion is, as would be the case in the US, to avoid "Armageddon [personal] liability" for partners in a firm hypothetically sued for massive malpractice—or for minor malpractice with massive financial consequences to others.  Younger partners, in particular, so it is reported (perhaps having grown up in a more litigious world—I speculate), are beating the drums for conversion.

The effect, however, is what has my blood racing:  UK LLP's are required to publish independently audited financials which, among other things, will show how much individual partners are making.  (This is, alas, not so in the US—an unfortunate lacuna in our British law inheritance.)  As the FT drily puts it, "solicitors have been reluctant to divulge such details."  

As previously reported, Allen & Overy has led the way, with as pithy and compelling a justification as one could wish for:  They did it "to be taken seriously as a modern, competent business."  Attention, all you gaming the numbers:  Time's up!

Orrick has snagged a total of 40 Coudert lawyers in China, including one partner in Shanghai, two in Beijing, and six in Hong Kong.  Despite the earlier unpleasantness over Orrick's he-said/she-said poaching of Coudert's London and Moscow offices, this is evidently amicable, or at least, as they say in matrimonial-land, uncontested.  Coudert's chairman, Clyde ("Skip") Rankin, would only say "As previously announced, the partners of Coudert authorized" acquisitions like this.

In a more sober analysis of the firm's grim last decade than Caitlin Griffith's still-inexplicable rant, Legal Week describes the combination of pride, outdated views of reality, and inability to establish a world-class presence in either New York or London, that made the events of the past week surely inevitable.

Update:  Bloomberg News covers the story, with a quote from yours truly.

The Lawyer's UK 100 listing will be out right after Labor Day, but we have an advance peek at the top 10 today.  Linklaters is #1 at £410-million in revenue (US$738-million), up over 8% on strong corporate-department performance.  Clifford Chance took second at £402-million, but up just 4%.  Both Allen & Overy and Freshfields suffered declines in revenue, with A&O down just over 1% (£358-million) and Freshfields down 6% (£320-million).  We'll have to await the full report to understand why.

Interestingly, 14 of the top 50 are US-headquartered.

Meanwhile, over at Bloomberg, there's a more analytic story that shows a reporter actually doing more than repackaging press releases.  (Since the California courts have held that bloggers aren't journalists, I can say that without fear of revocation of my press credentials.)   Bloomberg analyzed "productivity" of the top law firms, which they defined as revenue per employee (not per lawyer—per everyone).  Linklaters again grabs #1 by a healthy margin but on this metric Clifford Chance is not second but fifth, with Freshfields taking its place as #2:

Revenue Per Employee at London's Top 20 Law Firms.

Law Firm                    Revenue      Headcount   Fees per
                           (Millions                 employee
                            of pounds)               (in pounds)

Linklaters                   805          4770         168,763
Freshfields Bruckhaus        780          5245         148,713
SJ Berwin                    122           870         140,229
Allen & Overy LLP            666          4766         139,739
Herbert Smith LLP            265          1930         137,305
Clifford Chance LLP          915          6700         136,567
Lovells                      366          2779         131,702
Ashurst                      201          1539         130,604
Berwin Leighton Paisner      121           938         128,997
Addleshaw Goddard            139          1173         118,499
Clyde & Co                   104           908         114,537
Norton Rose                  210          1850         113,513
Denton Wilde Sapte           154          1414         108,900
CMS Cameron McKenna          163          1533         106,327
Simmons & Simmons            196          1904         102,941
Pinsent Masons               151          1518          99,209
DLA Piper Rudnick*           450          4851          92,764
Eversheds                    303          3870          78,242
Hammonds                     100          1439          69,492
Irwin Mitchell               102          1677          61,187

Source: Bloomberg Survey


*DLA merged with U.S. firm Piper Rudnick Gray Cary LLP Jan. 1. The
firm's revenue and headcount figure reflects DLA's for fiscal 2005
plus Piper's proportionate to the part of fiscal 2005 after the
merger, not DLA's total headcount plus Piper's total headcount.


To contact the reporter on this story:
James Lumley in London at  jlumley1@bloomberg.com.

Curiously, Bloomberg reports that "Slaughter & May declined to say" what its revenue was, while The Lawyer pegs it at £257-million, up 20%.  Different answers for legal as opposed to business reporters?  If I become a journalist, I'll have to remember that distinction—or else just call back and ask for someone else.

The Financial Times, always a favorite (think The Wall Street Journal with cheek), observes drily that "the firm's recent history makes poor reading."

The Lawyer comes to bat with no less than two stories and an editorial.  First it tallies up who's probably going where, from which offices, as well as providing a timeline of low points over the past five years and describing the final three-and-a-half hour partnership conference call, in the words of one there, as "sad and gloomy."

But I have indeed saved for last the best, or at least the most scathing (bordering on vituperative—Coudert fans, you have been warned):  Caitlin Griffith's roundhouse punch at the woebegone firm:

• "couldn't bear very much reality;"
• "high farce;"
• "euphemism after euphemism;"
• "Come off it!  'Strengths of the firm?'"

The woes clearly go back a decade or more, and unless one can excavate lessons from Coudert's grave, one can only observe with sadness and gloom. 

It sounds counterintuitive, but is it possible that "knowledge workers" (that would be us) need more supervision than they're getting, not less?  So proposes Thomas Davenport, professor of IT and management at Babson College (in Wellesley, Mass.) and head of the executive education program there. 

In his new book "Thinking for a Living: How to Get Better Performance and Results from Knowledge Workers" (Harvard Business School Press, July 2005), Davenport says that the classic strategy of "hiring good people and leaving them alone" is no longer good enough, if it ever was.  What, then, do knowledge workers need by way of help?

The answer matters, if, as I, you are a lifelong admirer of Peter Drucker and take to heart his counsel that the single most important determinant of economic performance in the 21st Century will be maximizing the productivity of knowledge workers.  To make knowledge workers more productive, most turned first to Knowledge Management.  The concept seems unassailable:  Don't reinvent the wheel, distribute best practices, find the expert quickly, etc.  

But the results of the first generation of KM tools were, as all can now admit, disappointing.  What went wrong?  "Most organizations simply created one big repository for all knowledge and all workers."  Stating it so baldly constitutes a diagnosis of the problem.  For example, at Partners HealthCare System, an organization of Harvard teaching hospitals in the Boston area, the challenge was how to keep doctors and other health professionals current given that some 260,000 articles a year are added to the biomedical literature every year.  The answer?  To target the doctor with the pertinent article at the very moment it's germane.  So if he's writing a prescription for twice-daily Lipitor, the system lets him know a once-a-day dose is now available, and therapeutically recommended. 

Isn't this high degree of granularity time-consuming, expensive, and difficult to pull off?  Yes, which is why Davenport admits he likes the example of Partners HealthCare because he hasn't found too many others like it. 

But in a law firm we don't add 260,000 documents a year to our repository—certainly nowhere near if you count only documents that have some intrinsic material value past their "due by" date.  Would it be feasible for a firm committed to a fine-tuned, "bottom up" KM system to deliver pertinent information in a more targeted manner?   Absolutely—and it will only get better over time.

By now we all know the real problem with KM is not technology, it's culture.  So I was happy to see Davenport endorse what I have long believed is the single most important "cultural" (psychological, motivational) thing KM has going for it in the eyes of hyper-analytic, competitive, super-verbal lawyers:  The desire to become a more capable and expert professional. 

"I have yet to meet a knowledge worker who isn't interested in making him or herself better. Knowledge workers take pride in what they do, and they want to be productive."

Maybe giving them KM tools with clear career and professional benefits is the answer after all.

Update 2:  Here's the Bloomberg News story, in which yours truly is quoted.

Update 3: The Wall Street Journal.

Update 4: The New York Law Journal.  This article implies that one reason a firm-saving merger couldn't be pulled off at the end was "unrealistic expectations" at Coudert about the value of its franchise.  

If true, this is a textbook example of a market failing to "clear"—meaning the situation where buyers and sellers have competely discordant notions of value.  The most common situation in which this occurs is when a particular asset class (just for example, say, residential real estate on the US coasts) has experienced a sustained run-up in price. 

Unsustainable price increases come to an end typically not when buyers and sellers both suddenly come to their senses, but when buyers get cold feet (a/k/a start looking at intrinsic value).  Sellers want to continue to believe the 20%/year growth is still in effect, as it were, and when they find no takers at that extrapolated level, they refuse to lower the price and often just take the asset off the market.  Liquidity drastically declines, and it can take years for psychology to readjust.    Coudert didn't have years.

We note with great sadness the passing of a 150+ year old firm, a pioneer on the international scene in ways many are still trying to emulate. (Also here.)

The firm's demise strikes me as exceedingly unnecessary—given the long perspective—but essentially inevitable, on the short perspective.  And sometimes the short run gets you, as vicious (and virtuous, but that's for another day) cycles are real.  Rumors begin to swirl, people are distracted, revenue and profits decline, partners decamp, clients follow or at least worry, more partners decamp, recruiting becomes impossible, poaching of entire practice groups and offices accelerates:  I needn't say more.

But unnecessary in the long run?  I firmly believe so.  An idiosyncratic compensation structure which drove partners to hoard their work and their clients, keeping all close to their vests, rewarding them disproportionately for hours actually billed by them personally, and devaluing teamwork and collaboration:  These too will get you in the end.  Possibly five, maybe ten, and surely twenty years ago it could have been changed and Coudert today would be a thriving member of the truly international elite. 

 Update: "The breakup of the firm will now commence."

Deloitte has a primer which I commend to you.  Among its key recommendations:

• Focus on the long run.  Where will your needs (by practice group, by geography, by client/industry cohort) be in a few years?  This involves everything from whether you're recruiting at the right law schools to whether your associate development and partner coaching initiatives are in alignment with where you think your firm should be heading strategically.
• Realize that your firm has an image, a perception, dare I say a "brand" in the marketplace for recruits—distinct from the market for clients. Think of your firm's brand image to clients as its "demand side" brand and its brand image to recruits as its "supply side" brand.
• Consider unconventional ways of assessing and recruiting associates—your cheapest source of new talent.  For example, IDEO, the multi-award-winning San Francisco based design firm, sends senior staff members to teach in the engineering master's program at Stanford, creating what amounts to a three-year interview of promising designers.   Imagine some of your corporate partners (the right ones, please!) guest-lecturing at Harvard, Stanford, Columbia (etc.) in the corporate law and securities courses.  Think the top-notch students you might otherwise be unaware of would be receptive to a personal invitation to interview with the firm?

Once you've got the right people, you've got to keep them.  The good news and the bad news here is that money alone won't do it.

To be sure, the overall compensation package must be competitive in the marketplace and, more crucially, perceived as fair.  But once you've achieved that baseline, "softer" factors take precedence:  How strong are your professional development efforts?  Are associates free to move between departments in search of the right fit?  Do you focus on outcomes, not bureaucracy, eliminating constraints and permitting creativity? 

Let's face it:  With the first-year associate package apparently frozen at $125,000 plus bonus, with every firm claiming to be "friendly and collegial," and with the reality of 2,000+ hours/year requirements across the board, how is your firm really going to distinguish itself? 

McKinsey chimes in that it really does get back to "branding."  If you limit yourself to the traditional toolkit (salary, benefits, blah blah blah), you will limit yourself to run of the mill recruits.  But if you can persuasively demonstrate intangible and emotional ties linking your best professionals to the firm with passion and commitment, trust me, you will well and truly stand out—and have the standout recruits to show for it.

Surprised me as well, but apparently the number is only going to rise.  Reportedly on the prowl for merger partners in London are Cooley Godward, Heller Ehrman, Proskauer Rose, and Ropes & Gray—and maybe others.  Nor are US firms already there standing pat.  Having just digested Shaw-Pittman, Pillsbury is supposedly eyeing London again (they've been there since 1972 but have only 20 lawyers to show for their efforts).

The numbers tell the story:

"The top 30 international firms [in London] posted an average profit per equity partner (PEP) figure of £789,900 during the last financial year, compared with an average of just £493,000 within the UK's top 30."

Pop quiz #2:  Q.:  How many of those "top 30 international firms" are US-based?

A:  30.

Again, the numbers help us understand why:  The US firms "depriv[ed] their UK rivals of total revenues amounting to £1bn."  While "deprived" is an odd word to use—the implication being that the UK firms are entitled to a 100% market share and that every £ going elsewhere was somehow absconded with—the economic impact of the US firms in the market is clear, as their revenue now amounts to 13% of the top 30 UK firms' total.

Not analyzed in either of these stories, nor in a third cheeky companion piece taking off from the trope of a personal ad [note to US readers:  "WLTM" is Brit-speak for "would like to meet"], is the relative performance of the top 10 US firms in London, which varies widely.

For example, Latham & Watkins and Weil-Gotshal are, relatively speaking, cleaning up.  Latham collects 10.6% of its global revenue from London, but with only 5.3% of all its global lawyers there and just 4.6% of its equity partners.  For Weil, the numbers are 10.5% (revenue), 8.7% (all lawyers), and 5.4% (equity partners).  Performance in PEP also shows a wide spread:  Here, Jones-Day is the standout, with its UK-only PEP equal to 135% of its worldwide PEP, while White & Case comes in last in London PEP, just 81% of its worldwide average.

In other words, while many have been called, not all have been chosen.

Revealing is the language required to describe this truly bizarre collision in terms that seem to lend it a gloss of rationality.  Consider this, from The New York Law Journal:

"For decades, law firms have depended on the orderly retirement or slowing down of senior partners to make room in the hierarchy for rising stars. [...]
"An even greater challenge to firm retirement policies may be posed by the growing number of older partners who feel they have remained highly productive and insist on holding onto privileged positions, either by negotiating special arrangements or by decamping to other firms. [...]
"[Younger partners'] resentment often centers on the belief that older partners are unfairly maintaining a stranglehold on client relationships and business origination credit that could just as easily go to other partners."

How surreal, not to mention just plain evasive, is this?  Let me count the ways:

• Neither is the "hierarchy" a fixed pie nor is achieving and maintaining partnership status a zero-sum game.  Assuming standards are not debased—a different issue, shall we say—anyone carrying their weight should be more than welcome.  No one is "making room" for anyone; each has rightfully earned it.
• Likewise, those who "have remained highly productive" are insisting on "holding onto" precisely zero "privileges;" what they are insisting on is no more than the ordinary recognition due under the partnership compensation system (expressly not including an "ageism" thumb on the scales).  Lastly:
• Any partner of any age—for that matter, any associate—who is able to single-handedly maintain a "stranglehold" on client relationships has not been properly socialized about collaborative and cooperative practices within a firm.  Need I add that any partnership agreement that permits this type of antisocial behavior deserves equal, if not greater, blame.

In short, where there is no "room" in a fundamentally elastic body, where earnings are "privileges," and where people "resent" individuals for doing precisely what the system permits them to do:  Well, we have a stunning failure of coherent analysis. 

Fortunately, a saner, albeit anonymous, voice also weighs in. 

"An older partner at a top firm who asked to remain unnamed said such disputes are the firms' fault. He said most tried to placate younger partners by dangling a carrot of higher compensation as they aged. But firms then tried to lower older partners' compensation as quickly as possible. In that regard, he said, older partners are seeking to vindicate their rights in a manner no different than their younger counterparts."  [emphasis supplied]

Now, at last, the root of the problem is exposed:  Outdated notions about productivity, aging, and even retirement itself are irrationally skewing firms' handling of these situations (this is the "delusion" I initially referred to). 

Problems demand solutions, and in this case we have two candidates:  Employment discrimination law, or economics.

The former, most conspicuously on display in the EEOC's suit against Sidley-Austin for a purge of older partners a few years ago, brings with it the meretricious re-introduction of "privileges" in the truest sense—unearned entitlements doled out on a basis divorced from merit.  In short, it puts us right back in Unintended Consequences Land, where rules intended to ensure fair play guarantee that no such result will obtain because one party has been granted a valuable bargaining chip deus ex machina. 

I suppose I should be pleased, in an odd way, to be able to report that this perverse intervention is also afoot in the UK, where anti-age-discrimination legislation, reportedly designed expressly to apply to partners, will come into effect in October 2006.  Evidently, only one in 20 partners in City firms is over 55. The result?:

"Notably, the tactic of ‘managing out’ partners will be considerably complicated, with firms coming under pressure to show that exiting partners are being selected on performance grounds, not knee-jerk ageism. This, considering the scarcity of partners over 55 at top 10 London firms will prove challenging, both culturally and logistically. Likewise, law firms will come under pressure to revise mandatory retirement ages ....

"All of which could be seen as an unnecessary hassle for UK firms, though the casual observer might wonder why they don’t just look to their US rivals, who are far more skilled at utilising older partners and are, after all, far more profitable."

At this point, permit me to state what is I hope the obvious:  Robust economics makes "age discrimination" an empty vessel.  Apply compensation metrics even-handedly, reward performance, and establish and enforce an incentive structure designed to support the firm as an institution, with all the collaborative and cooperative consequences that flow therefrom.

And please, never mistake earnings for a "privilege."

Indeed, the more closely the management literature has looked at leadership, the more diverse its manifestations seem to be.  What, then, can we say about how a firm can cultivate its next generation of leaders?  (I'm assuming the incumbents are, well, the incumbents.)  Managing Partner magazine helps distill the roadmap:

• Create a vision.  This means capturing the hearts and minds of people with a call to action to engage them in creating the firm's future.  Financial analytics and market assessments are surely part of this process—to ensure the business case is sound the promised land realistic and attainable—but engaging people's emotional juices is your primary challenge.  The rationale, truth be told, comes later.
• Walk the talk.  Even as young children—perhaps especially as young children—people's hypocrisy detection sniffers are as powerful as a dog's nose.  If your proclaimed goal is to institutionalize the client base and promote collaboration and professional development, for example, you'd best be seen as acting that way yourself.
• Face hard realities.  The reason you call it a "vision" is that it's not yet reality.  In other words, there's a gap between where we are and where we want to be.  Do not duck, temporize, or change the subject.  If people's behaviors have to change, a steady diet of comfort and reassurance isn't going to do it.
• Breed cohesion.  Griping, splintering, and conflict must be avoided or faced squarely and dealt with.  How?  Withholding judgment until all (well, all rational) points of view have been heard; enlisting cooperation and avoiding the Lone Ranger temptation.  Explaining fully to those whose opinions were on the losing side how you reached your decision.  And once the decision has been made, it's time for folks to get on board.  (Yes, the recalcitrant may have to be made an example of.)  And lastly:
• Celebrating wins.  Reward progress.  Recognize individual contributions.  Point out the distance traveled.

Assuming you concur that this all sounds beneficent, how can you get there from here?

Fortunately, the management literature, again, has something to say.

• Developing leaders needs to permeate the firm.  This means it should change the way you recruit, change your coaching and professional development efforts, and change your retention and promotion criteria.  Remember "walk the talk?"  Here it is in action.
• Expand training beyond "skills" and into "behavior."  A technical capability can be developed through essentially cognitive tools, but a set of attitudes and behaviors are complex and require time, feedback, nuanced coaching, and an unusual degree of self-awareness on behalf of the lawyers being groomed for leadership.  This takes planning, commitment, dedication, and follow-through—activities and behavior patterns to which lawyers are no strangers.

Now, the reaction of many lawyers to a conscious, premeditated plan to develop the next generation of their firm's leaders through reliance on tools born in behavioral science and honed in corporate America may be the reflexive, "But we're different than a corporation!  What other law firm does that?  We've always let partners develop autonomously."

The answers to which, in order are:  (a) less different than you think; and why not adopt proven techniques that the F500 and their brethren have learned often at the cost of paying great tribute to McKinsey & Co.;  (b)  perhaps few—and so?; and (c) is your track record under the autonomous model the equivalent of a best-of-breed executive development environment (say, GE)?

The need for leadership is real, as are the tools to address it.  It's too late to pretend the best we can do is letting nature take its course.

My friend Patrick McKenna, of Edge International, sent me a press release announcing the two winners of this year's "InnovAction Awards," a contest held annually to identify firms that significantly stand out for initiatives in: (a) client service; (b) knowledge management; (c) market leadership; or (d) professional experience of their own lawyers.  It is open to firms of all sizes and types, worldwide.

The awards are co-sponsored by Edge and the College of Law Practice Management, and evidently their standards are rigorous insofar as there were no awards for client service, KM or "professional experience" despite "a good number of submissions, from four different countries."  But the killer was "there was nothing particularly unique about many of them."  (No snide remarks, you in the back, about law firms' record of innovation.)

The winners:

• The familiar DLA Piper Rudnick for a service I wish had existed when I was CEO of a dot-com:  Their "Venture Pipeline" initiative, launched in 2002 as a separate business unit and run by experienced entrepreneurs, to help early stage companies.  (Using DLA Piper for your IPO is not a condition of getting help.)
• The unfamiliar (my loss) Simpson Grierson of New Zealand for a comprehensive, all-hands market positioning campaign communicating the firm's radical make-over.

Innovation is devoutly to be wished; congratulations to the recipients.   And for those of you with stalled or still-born initiatives on your desk, let those blocking your road know about these awards—why shouldn't you be in Vancouver next September accepting one?

Gareth Quarry is the headhunter in question, and he's London-based.  The occasion for the quote was an interview with Legal Week, and the occasion for the interview was his opening up his own new shop after a lengthy—and no doubt comfortable—break, having sold his previous recruiting firm for £30-million.  Quarry summarizes the changes he's seen as follows:

"He says that internationalisation — a rarity in the late 1980s — is now the norm. There are now massive UK-and US-led vehicles that are progressing through Europe and increasingly beyond, to Asia."

And the competitive battle is only intensifying:  He cites Linklaters and Allen & Overy as having gotten serious about their establishing a presence in New York, and, conversely, says that "The previous received wisdom about the US firms in London being only in it for the short term has been overturned by the financial success of those London offices."

This speaks to a theme of mine that US firms have established beach-heads in London for specific reasons, not the generic "we ought to be there," and that UK firms opening in NYC have, heretofore, been scattered in their strategic emphasis.  If Quarry is right, the US strategy in London is for real and the UK strategy in New York is getting there.  Bravo.

But there's more; he has astute observations about the criteria for ascension to equity partnership (emphasis supplied):

"A true equity partnership should be a domain reserved for partners who meet the real criteria for partnership. These include the ability to deliver the highest legal services and skills, plus the ability to project manage efficiently. A true equity partner should be able to add to every piece of the equation. But not every lawyer can tick all those boxes."

"Project management?"  Where out of left field did that come?  Well, out of common sense, or wisdom.  A trial (litigation) or a deal (corporate) is, essentially, one enormous project.  And if you don't think it needs to be managed, then it won't be.  That is to say, it will be mis-managed.

Can lawyers become more business-like?  We'll give Quarry the last word: 

"Law firms are going to have to become more 'corporatised.'   When asked to predict the legal market in the next five years, Quarry says: "There are likely to be 10 super firms which are UK- and US- parented. The next tier will be ‘super niche’ firms, which will be as good in quality as the top 10 in their niche practices."

So, the questions du jour are:  (1)  Are you "corporatised?"  and, (2)  Are you super or super-niche?

If "quadrifecta" is a word, then I suppose we have one, although some of the four firms constituting it are, in the immortal words of Orwell's Animal Farm, "more equal than others." 

Reed Smith is reported to be eyeing an acquisition of Chicago's Wildman Harrold, while Squire Sanders is looking at Miami's Steel Hector.   The potential Reed Smith deal was earlier rumored, but unless I missed something this is the first writeup of the Squire Saunders acquisition.   So much for the facts.  What does this mean, if anything?

To begin with, the two purported deals are completely unalike.  The Squire-Sanders/Steel-Hector move is an opportunistic grab by Squire-Saunders of the equivalent of a drowning man; Steel Hector is variously described as:

• "suffering financial setbacks;"
• "plagued by partner defections;" and
• subject to "much speculation about its ability to stay afloat;"

after an overly aggressive expansion into Latin America in the 1990's, combined with taking on as partners former ambassadors and judges with more marquee than market value, blew the lid on expenses.  As luck would have it, key clients more or less simultaneously decided that would be a good time to implode, themselves.  The managing partner who had led these initiatives, Joseph Klock, was deposed and the firm's ranking in South Florida has dropped from second to fifth.

Let's back up:  "Opportunistic grab?"   "Drowning man?"  Am I being too harsh?  I demur:  I am only describing the harshness of the marketplace, a bedrock reality which, no matter how loudly some may keen that "we are a profession, not a business," is something you have no ability to opt out of.   Steel Hector, of course, understands this; they were reportedly trying to recast themselves as a "boutique" before Squire Sanders appeared on the horizon—perhaps the only realistic alternative option.

Although these comments were offered in the context of Reed Smith, they apply with equal if not greater force to the corner Steel Hector finds itself in (emphasis supplied):

"You clearly see a squeeze in the 100- to 300-[lawyer] range," said Lee Miller, co-chief executive of DLA Piper Rudnick Gray Cary, a 2,700 lawyer international firm. Five years ago, Miller's firm was known as Rudnick & Wolfe, a 355-lawyer Chicago practice that depended heavily on real estate work.  But, Miller said, the firm had to become more global and diverse in order to meet the changing needs of its clients. "The law firm world mirrors the corporate marketplace. It's as simple as that," Miller said."

The Reed Smith deal—which smells to me less conclusively "done" than Squire Sander's—presents an altogether sunnier landscape.   Reed Smith has been, since the turn of this Century, on a mission to grow beyond its Pittsburgh roots (not, in itself, a half-bad idea, given the fall from economic prominence of that city).   The presumed Wildman-Harrold acquisition would be merely the latest acquisition-from-strength in that strategically calculated and professionally executed long march. 

Michael Pollack, Reed Smith's Chief Strategy Officer (full disclosure:  I have met Michael and consider him a friend, although I have not discussed this post with him), summarizes the rationale for the putative deal with all the relaxed and considered perspective of someone doing a deal because he wants to, not because he has to:

Pollack said Chicago would be a logical next step for Reed Smith being that the firm has the East and West coasts pretty well covered.

"There is a lot of space between Pittsburgh and San Francisco," Pollack said. "It doesn't mean we have to fill it. It's just a question of opportunity. Chicago is a great legal market with a lot of companies based there. We have a lot of clients there and in the upper Midwest that might give us more work if we were strategically closer to them. That's why we did the Crosby deal."

[The "Crosby deal" was Reed Smith's 2002 acquisition of Oakland-based Crosby-Heafey, which instantly made Reed Smith a player in California.]   Interestingly, Michael also notes that "it's not our style" to enter a market where the firm can't be relevant.  And "relevant" means?  "100 lawyers."  In their New York office, Reed Smith just happens to have nearly that number.  What a coincidence.

The moral of the machinations announced today?  (a)  The marketplace is harsh.  (b)  You can deal with that by becoming global and matching your corporate clients' geographic footprints.  (c)  Or you can deal with that by going boutique, or regional-powerhouse, or alternative-fee innovator.  (d)  What you cannot do is not deal with it.

I'm experimenting (as you can see!) with Google AdSense.

While I have every hope that the ads will be tasteful and germane, I don't know that I can guarantee it. Here's what Google has to say about it:

Google combines advanced technology with editorial staff to ensure the highest quality standards in our ad program, but we recognize that you may not want certain ads.

Feedback is always welcome! Please email me personally with any reactions.

Actually, enlightened companies are realizing there's an alternative:  According to Information Week, it's RSS.  The advantages?

• Email is pushed to you unbidden; with RSS, you only get what you have opted to subscribe to.
• RSS feeds are inherently categorized (one firm set up a "30 days past due" receivables feed for the accounting department, e.g.—contrast that to getting one separate email for each past-due account, scattered randomly throughout your inbox).
• A tremendous number of feeds can be scanned at once from a single screen.
• Because RSS was designed to follow the "headline plus story" format, it's inherently an efficient conveyor of meaning—what you want to read more about vs. what you don't.

And we're not done.  RSS is also agnostic (or should that be, "promiscuous"?) about what's moving through the feed:

"RSS also has this perk for business environments: It handles a variety of data types, not just news articles. Words and numbers, the bulk of most databases, are easily converted into XML for transport. Other kinds of data, such as MP3 audio files, can be included in RSS feeds, too. In essence, RSS can serve as a lightweight data-integration system."

Firms such as Traction Software and KnowNow are beginning to provide "enterprise" RSS tools, but there are other ways to simply subscribe to RSS feeds, most of them free.

One 1,000-lawyer firm hired a consultant to estimate (conservatively) the cost of all-hands emails in lost productivity, and the answer was.....over $125,000 per month.  (All-hands emails are now forbidden at that firm.)   And now, with RSS, you no longer have the excuse of "but there's no other way."