Courtesy of a UK reader comes word that Adam Smith will adorn the new £20 banknote to be issued by the Bank of England next spring.  In The Guardian's coverage, the headline is "Adam Smith becomes first Scot to adorn an English banknote."

The £20 note is the most widely circulated of all denominations, with approximately 1.2-billion copies issued.   Aside from the portrait of Adam Smith there will appear "an engraving showing the division of labour in pin manufacturing with the words "and the great increase in the quantity of work that results"."

Perhaps predictably, there has been some genial sparring between left and right over who has the better claim to his legacy:  The left pointing largely to The Theory of  Moral Sentiments and its theme of the universality of human sympathy for others, while the right points to the "invisible hand" guided by the self-interest of each, with a minimum of governmental or societal interference, to produce the economically optimal results.  Mervyn King, governor of the Bank of England, offered a nicely inclusive statement: 

"Social institutions and market economies go hand-in-hand," said Mr King. "Second, people who, for the most part, pursue their own self-interest, are also prepared to stand back and ask how their actions should be constrained by social institutions. Such institutions arise because we build them."

I see a trip to the UK in my future to procure one of these, suitable for framing.

So we arrive at the question du jour:  What have you done for your firm's alumni network lately?   This is partly prompted by two articles, one from each side of the pond, in The National Law Journal and in Legal Week.

What's the value of that network?  Let's turn the question around:   What have you invested in those who have left?  The business reality of the value of that investment is changing the tone of conversation from, "They're gone; goodbye; so long" to "Stay in touch; drop by; come to our alumni-network events."  To Skadden-Arps, it's setting up a contact network for lawyers on maternity leave.  According to Earle Yaffa, Skadden's managing director, "we would love to get them back." 

Or consider the Vinson & Elkins partner who left to become GC of a Texas health-care company hoping she could spend more time with her three daughters.  Eighteen months later, after a few visits from V&E managing partner Joseph Dilg, she came back as a partner with the understanding that V&E could provide some flexibility and let her attend after-school events if she could up on work later at home.  Improbable?  So they thought, but so it was not: "I thought it would feel a little awkward coming back," she said. "It turned out to be really comfortable."

Meanwhile, in the UK, according to a Thomson Elite survey (no US analog reported), only 15 of the top 100 firms mention their alumni networks on their websites—but that includes 8 out of those in the top 10, and only 7 of those ranked 11—100 (and just 2 in the second, 51—100, half).

Now, the contrarians in the audience may be asking yourselves, "If so few firms seem to invest in the care and feeding of their alumni networks, maybe there's a reason; maybe, in other words, it's a poor investment."

But consider:  McKinsey, not known for an unsophisticated or unwise approach to business strategy, invests a tremendous amount in creating and nurturing its alumni network.  Indeed, it's virtually a "core competence" of the firm.  And if you happened to graduate from an Ivy League or similar high-caliber, high-endowment fund university, you've had first-hand experience of an institution that works assiduously on its alumni network.  (According to the Legal Week piece, "US universities" raised $7.1-billion from their alumni last year, and "more than 20" raised over $50-million apiece.

While that's admittedly not squarely on point, consider this:

"[A] top 100 law firm in the US, with about 550 lawyers on its staff, decided to initiate an alumni programme. Within six months, it had more than 400 registered alumni, had benefited from 10 significant business leads from the programme and had achieved more than $500,000 (£268,000) in new client work."

To make this more than an exercise in setting up a backwatered email list-serv and some episodic cocktail parties, consider putting real intellectual teeth into your "programme:"

• Group your alumni by practice area and have periodic briefings and updates in their specific areas of expertise provided by your firm;
• Convene groups of similarly like-minded alumni together with your firm's own "thought leaders" in those disciplines and discuss the implications of cutting-edge developments (stock options backdating for the securities-law crowd, anyone?);
• Communicate clearly, albeit in an understated way (this won't be hard for you!), that you welcome overtures by selected alum's about returning to the firm, in roles TBD but which can you are prepared to discuss with flexibility and creativity.

The more anthropologists and evolutionary biologists learn about human behavior, the more firmly established is that we instinctively trust local groups (those aren't the only groups we can trust, of course, but they're the readiest to fall to hand).  Capitalize upon these instincts. 

Consider this:  How large is the potential number of people who could bring business to your firm or otherwise benefit it reputationally or intangibly?  Thousands?  Tens of thousands?  Your alumni constitute the minute percentage of that potential audience that your firm has actually made a sizable investment in, whom you have selected from among scores of ostensibly qualified competitors, who have intellectual and emotional bonds to your firm. 

Ignore or overlook them?  Emotionally immature, intellectually arrogant, and financially imprudent.  Don't be among the 85% (UK 100) going down that benighted path.

Now, using companies as diverse as Whirlpool, Sanofi-Aventis, and Halliburton, Booz-Allen's Strategy + Business has a piece on how to go about just that. At Whirlpool, for example, 400 employees from a range of departments were trained, starting in 2000, in "ideation" (biz-school speak for brainstorming) and divided into teams headed by "innovation mentors" designed to identify unmet consumer needs and target R&D accordingly. Whirlpool's new product introductions have gone from a handful per year to dozens, including the new "Gladiator" product line offering configurable combinations of appliances, storage, and workbench areas.

Despite success stories like this, opposition, some of it principled, remains. One school of thought treats social networks as "emergent communities" spontaneously formed by serendipitously shared interests, and therefore not susceptible to management. A related belief is that networks, as self-governing communities, cannot be interfered with without doing damage. To be sure, throwing money or collaborative software at them without concrete priorities specified and some way of measuring success can be wasteful, and installing Procrustean individual performance metrics can cause the communities to self-destruct.

Nevertheless, if one starts with a rigorously specified social network diagram, one can identify key lines of connection, see which individuals are "nodes," and who fills the role of "natural brokers" spanning two or more otherwise disparate communities. For example, Halliburton, less famous today for its core business of oil exploration and drilling than for its hapless performance in the Iraq theater of war, sought a way to fix highly disparate performance among its various "completion" groups—those responsible for taking oil wells from exploration and drillling to actual production. These groups, widely dispersed in places like the Gulf of Mexico, Canada, the North Sea, Nigeria, Angola, Brazil, and Saudi Arabia, were experiencing highly variable rates of success and difficulty in getting essentially the same job done.

A "network analysis" of the groups revealed, perhaps unsurprisingly, that they communicated relatively little among themselves. Nigeria talked to Nigeria, Brazil to Brazil, etc. The standout performer in the groups was the Gulf of Mexico team, which had created many of the communities' best practices and was improving performance steadily, while across the other six countries, "costs related to poor quality" (e.g., delays) were up 13%, a key poor-performance metric.

Based on its network map, Halliburton did two things:

• moved some individuals in the Gulf to other regions; and
• moved individuals with strong ties in other regions to the Gulf.

These moves were not random, but highly targeted, selecting people already identified as having high growth potential, and investing in their professional development, with highly visible promotions typically occuring on their return "home." A year after the transfers, an updated network analysis showed a far richer skein of interconnections, not just to and from the Gulf of Mexico, but between essentially all other nation "pairs." Concrete results?

• the number of personal referrals needed to connect someone with a question to someone with the answer dropped 25%;
• revenue increased 22%
• the "cost of poor quality" metric declined 66%
• overall productivity went up 10% (this is in just one year, recall); and finally
• customer dissatisfaction dropped 24%.

Impressive as that might be, we know it can be hard getting there from here. As Cross and his co-author describe it:

"Many people are reluctant to ask colleagues whom they don’t know personally for help, even within the same organization, and for a wide range of reasons: Will they think I’m stupid for asking the questions? Are they really experts? How can I trust them?"

One way to help overcome this is through giving people information about others in advance in hopes they will discover commonalities of interest, and letting human nature take its course. What type of information? Not just areas of expertise ("China," "project finance," "technology IP licensing") but personal information (alma mater, hobbies).

So what's the payoff, again? Consider the well-known reality that a consistent differentiator of high-performance individuals is their habit of cultivating ties outside their unit and outside the organization. For example, in one (unidentified) financial services organization, a key female leader of one community of practice was determined through SNA to be surprisingly central to the entire group. Indeed, by herself she accounted for nearly one-fifth of the entire unit's value creation.

"When we asked one of the company’s leaders what would happen if she left the organization, he blanched. It turned out that she had recently submitted her resignation."

Had the firm known the value of the woman's centrality earlier, they could presumably have taken steps to retain her.

The more far-flung organizations (and law firms) become, the more important it is to ensure the "knowledge workers" who inhabit them are well-connected. This nicely sums up its value:

“The system we have developed is intrinsically rewarding to the users,” says Guillermo Velasquez [instrumental in the Halliburton experience]. People participate because they see value. Experts get recognition. As time goes by and people in the community start to know each other, they develop reciprocity. An individual in need today may be tomorrow’s expert providing the knowledge to help solve a problem. Gradually, we see much higher trust, and the community changes from the mode of ‘getting the right information to the right person at the right time’ to truly start building on each other’s ideas to find a solution to a problem. In other words, that’s when we start creating knowledge.”

"Creating knowledge?!"

First, the change in the way the firm is "engaging with our associates," as Genevieve Tennants, A&O's HR Director, puts it at Legal Week. Without question, everything she says about the firm's plans is commendable. Among other things:

• The firm recognizes that "the old days of the partnership laying down the terms and conditions of employment and then expecting associates to acquiesce are over."
• Retaining key talent is the only way to maintain competitive advantage.
• So the firm is taking a page from the way it treats its clients (or aspires to treat its clients, at any rate): "When competing in the ‘war for talent’, we would be well advised to apply the same principles we do when managing our client relationships. We need to listen. We need to understand the issues and be ready, willing and able to respond."
• As associates have become more involved in trying to find a solution, "their appreciation of the complexity of the situation has increased. They too realise there is no quick fix that management has — for whatever reason — decided to ignore." This remark I found particularly telling: Rather than be "afraid" of involving associates for whatever irrational reasons might obtain (generally revolving around such bogeymen as "losing control"), you might discover that involving them makes your job easier. Associates are not, need one be reminded, stupid. They are amply capable of appreciating the tug-of-war between the exigencies of firm profitability, the fundamental pyramidal structure of our industry, and the fact that well-rounded, sane and level-headed professionals need to "have a life." Engage them; you might like it.
• At the most summary level, the A&O initiative can be distilled into "creating a coaching culture:" Providing greater clarity about performance expectations, career paths, and better two-way communication.

Notably, the A&O initiative includes as an integral part a revamped pay-for-performance component. The aspect that grabbed all the headlines a few days ago was the 15% across-the-board pay rise ("out of season," as it were, to boot). But that's the boring part; the fascinating part is a new deferred-compensation structure (somewhat obliquely described in this companion piece), but the primary component of which is: "The bonuses are linked to the value of an equity point, thereby tying the associates’ financial rewards to the fortunes of the firm and its partners."

What makes this more radical at A&O is that firm has simultaneously abandoned its firm-wide bonus handed out every summer "as an article of faith." While intended to foster a "one-firm" mentality, it suffered from the familiar maladies of any lockstep system.

Now, of course, comes crunch time. It's all well and good to pump up morale with a more-than-generous financial gesture, but as the months ahead unfold, if that turns out to be all there was to it—if, in other words, the "coaching culture" initiative falls to inertia, fear, or distraction—then A&O, for all its thought and effort spent over the past year in devising this innovative and, on its face, admirable program, will likely find itself back in the high-attrition-rate penalty box.

Loyalty and enthusiasm cannot be bought and paid for. This is so for associates, it's so for partners, and it's so for clients.

Would you sincerely prefer it otherwise?

I'm here to remind you that CMS Cameron McKenna, #13 on the UK 100, just finished doing that very thing.  First, some background in case you're unfamiliar with CMS:  Their revenue last  year was £181-million, or about $US335-million, and their profits per equity partner £476-thousand, or about $US880-thousand.

In terms of client base, roughly 100 of its 4,000 clients account for two-thirds of its revenue, and deepening its penetration into this group is the firm's strategic goal.  To become the "go-to" firm of choice among this group means focusing on absolutely nothing other than how to deliver the best-quality result for the client and having no monetary or other incentives that conflit with that.  Hence, at the turn of this young century, CMS Cameron McKenna began the process of eliminating its salaried partners and returning to its roots as pure lockstep:  The better to encourage unvarnished collaboration.

Hard?   You bet.

Although the article chronicling this (in brief) doesn't touch on the thorny topic of managing the elimination of the rung of salaried partners, it pulls no punches about what it means to be a lockstep firm:

"Lockstep works only if you're prepared to be intolerant about underperformance," argues [Dick] Tyler [managing partner of Camerons]. "This means you're helpful and visible in terms of managing people, but people have to succeed by reference to what we believe to be an acceptable level of contribution."

Saying you're "intolerant" is one thing; doing it another.  Camerons does it by having frequent, as in quarterly, partner reviews, posing three questions to every partner in the firm:

• What did you say you were going to do?
• Have you done it?
• What are you going to do now?

Partners are not the only ones being queried:  Camerons does the same in face-to-face interviews with some 150 clients annually, although there of course the questions are more along the lines of meeting service expectations—and even asking for numerical grades on a score of 1-5.  The goal?  To score at 4.5 or better, and then to improve from there.

Sound a little too MBA-like for you?  Consider the model Tyler dropped into the conversation:  British supermarket-er Tesco, which reporting period after reporting period beats its previous results.  When asked to explain how they do it, Tesco CEO Terry Leahy respnds simply, "We just listen to our customers."

But as far as Tyler is concerned, the statistic of which he is "most proud" is that of all the new partners made in the past five years, 71% trained exclusively at Camerons.  He believes that the war of the future is for talent, and that "five years hence the firms at the top of the tree will be the ones that crack this." 

If you thrive in an environment intolerant of underperformance, ready to be grilled every three months on how you've lived up to your promises, then you are ready for Camerons—and its clients may be ready to rank you as a 5 out of 5.

Not for everyone?  Indeed not.  But as the profession muses somewhat fecklessly on how to define, and attain, "work/life balance," we have in our sights a few clear alternatives.  If you belong at Camerons, Godspeed. 

It's a truism that one often learns by teaching, and I've experienced this very phenomenon in leading the MBA course, "Strategic Technology & Innovation," which I'm teaching this semester at SUNY/Stony Brook's Manhattan campus.

What have I learned?  It's actually something that I knew at a semi-conscious level, but which has been driven home as indisputably true, and it has to do with the relationship of IT to "the rest" of a law firm.  In business school, it goes by the name "business process optimization," but don't be daunted.  All that "BPO" means is that it's the core mission of IT to help the firm (Clifford Chance, Foley, Wal-Mart, General Foods—whatever) perform those indispensable activities at the heart of what the firm does more efficiently, productively, reliably, with higher quality.   In the case of Wal-Mart, then, it's all about the supply chain and inventory management; for General Foods, it's manufacturing cereal; and for Clifford Chance and Foley, it's things such as producing briefs, negotiating and documenting corporate transactions, and so forth.  (For all firms, "BPO" should also touch those sexless but mandatory functions such as bringing a new employee on-board or assessing the credit risk of a prospective client.)

As with many other domains in the world of Management, what you get often depends largely or in part on  how you've organized the function.    When it comes to IT, there are two familiar models, neither, frankly, ideal.

One is tempted to wonder if there couldn't be a better way.

Now, courtesy of McKinsey (who else?—pdf of the piece available here), let me introduce a different model, the "demand/supply" model for IT.  Here's what it looks like, for starters, then I'll discuss what it means:

What does this accomplish?  Essentially, it unites firm-wide IT demand and also firm-wide IT supply.

On the demand side, the firm benefits by introducing one centralized group of (tech-savvy) managers who can be fluent both in the language of IT and intimately familiar with what the firm does.  Their job is essentially that of drawing a strategic roadmap for technology development within the firm so that, for example, developers aren't overwhelmed implementing a host of low-value enhancements while losing sight of the larger path.  Introducing one and only one source of IT "demand" in the firm means whatever the firm decides it needs can be acquired at enterprise scale rather than departmental scale, that standards can be developed and rolled out firm-wide, that duplication can be avoided and reuse encouraged.

On the supply side, internal and external IT developers are able to work with a more tech-savvy customer, and one that speaks with a unified voice rather than in the Babel of jousting departments with different views of what constitutes a high vs. a low priority.   To the extent internal IT resources are able to serve a broader "marketplace," as it were, opportunities for developing career tracks and investing in training will also be enhanced.   When the question is the familiar "build or buy?," one unified IT supply organization will at the very least avoid inconsistent choices within the firm, and at the best will be in a stronger position to negotiate with external vendors—and will have the luxury of developing relatively deep expertise in the relative capabilities and performance of different offerings.

If you're convinced, what next?   McKinsey posits that while some firms making this switch concentrate on the supply side, the "demand one, however, is what distinguishes this model from the traditional IT setup, and getting demand right is more difficult."  To increase your odds of success, they recommend (the following are verbatim quotes):

• Align demand organizations with the business units:  Demand organizations align with the business to act as the true voice of customers in clarifying what they mean—which is not always the same as what they say.
• Let demand organizations own business processes.  Since business processes are increasingly shaped by IT solutions, businesses should assign the responsibility for work flow designs to a group that understands the underlying technology as well as the key business pain points.
• Give demand organizations a mandate to rationalize demand. Most companies have too many applications doing similar things, so they periodically have to prune their application portfolio—a costly and time-consuming process. Demand organizations can help prevent this situation from developing in the first place by minimizing the number of IT projects and applications at the time of funding.
• Empower demand organizations to manage suppliers. The demand organization should free the business units from the complex task of managing a broad range of IT suppliers, both internal and external.

To be sure, this is no panacea; to implement it effectively will require persistence.   And there are pitfalls to guard against:  For example, letting the demand organization be "captured" by a particularly assertive business unit (I know that could never happen at your firm).  Senior management must be entirely behind it, as well, as some user groups will invariably feel they are being slighted if they are deprived of their "captive" IT departments.

But the benefits seem compelling:  The organizational structure is simplified; IT investments are better coordinated and prioritized (and duplications and inconsistencies are eliminated); systems and processes are more tightly defined; and best of all, lawyers should begin getting greater value for their IT investment.

As a leader in your firm, how do you know when it's time to decide?  And, of course, how do you know what to decide?  How do you reach the "The Go Point," as Michael Useem , director of the Center for Leadership and Change Management at Wharton, puts it? 

Now, the entire notion of studying decision-making may seem too great a mountain to tackle, but I suspect Prof. Useem's comeback would be along the lines of, "Maybe, but because decision-making is so important, I had to do it."  Here's what he in fact says in the Knowledge@Wharton article (downloadable pdf available here) discussing his work: "it's striking to me that people in mid-level office -- sometimes in high office -- are just not great at knowing when to pull the trigger, and how to pull it when they do."

So what makes a great decision-maker?

Some would posit that it's never looking back—Jack Welch, among others, was famous for this.  But is that optimal?  Useem would say it's not.  Here's his "executive summary" on good decision-making:

"I think the basic premise that underlies the book -- I think it just underlies reality -- is that decision making as a skill is learned really by making decisions. Critically though, [it means] looking back on those decisions, to make certain we don't make the same mistake twice, that you have some sense for what went right as well."

Learn from your personal history, in other words, but don't be paralyzed by it.

More telling are the examples of real-life decision-makers Useem cites, from his wide-ranging interviews—everyone from front-line firefighters to the CEO of Lenovo, the Chinese PC manufaturer.  In fact let's start with him: Mr. Liu came from a state owned and operated research center where his budget was handed to him every year, until he broke away 22 years ago with a handful of friends to create what is now the world's third-largest PC maker.  Coming out of that cloistered environment, how could he approach decisions on what to manufacture, how to market, who to hire, how to price?

The answer?

He enforced on himself a discipline of learning how to decide.  For over 20 years, every Friday afternoon, every week, he sits down with his half dozen or so top direct reports, and they review everything they've done that week—which decisions were good and which were awful. 

But this discipline needs to be balanced with intuition, doesn't it?  Yes, but here's the dirty little secret about developing good "intuition:"  It in and of itself is the end result of relentless discipline.   Useem cites the example of a 21-year-old firefighter arriving with a convoy of trucks at a monstrous wildfire in Alaska, eager to jump off the truck and charge the mountain immediately, who is brought up short by the team leader (all of 29, himself).  Here's what happened:

"Burritt just stood there. He just literally stood there, as if there was plenty of time, nothing going on: the look of total cool. And then he very methodically began to ask people on the fire team: "What's going on? What do you see? Where's the fire going? What's the wind doing? What's the texture of the ground material?"

"After about 10 or 15 minutes of careful data gathering and a working through, Bob Burritt said, "Okay, here's what our plan is." And he said, "I want this team to go over to that fire, this team over here. In 25 minutes you're going to report back to me. We'll evolve our thinking and decision making in due course."

And to this day the 21-year-old, now a senior "Incident Commander" for the US Forest Service, thinks whenever he enters a fire zone:  "Burritt."

Which brings us to speed in decision-making.  When is it a virtue and when is it a vice?  For some people (police, emergency room personnel, bond traders), there's rarely any such thing as too quick on the draw.  For others—Boeing, for example, in the go/no-go decision on whether to commit to the 787 "Dreamliner"—the decision can span years.  And should.

Sometimes, indeed, procrastination itself can be a virtue.  It's possible that the situation you're being asked to decide about will be, in military speak, "OBE" (Overtaken By Events). 

"I don't want to make decisions that are so big that they're monumental. I want to make a decision when it has to be decided and I want to get as much input. I want to see how these political forces are arrayed." He was known for saying: "We're just not going to make that decision now. We're going to make it when we have to make it." That's a way of saying there is a spectrum."

But how "certain" is certain enough?  I'm personally fond of the Marine Corps rule:  When you're 70% confident people are 70% behind you, go. 

Useem cites the example of John Chambers at Cisco, who has an extraordinary track record of picking astutely among potential M&A acquisitions.  How does he do it?  He relies on a handful of key advisors who have zero personal agenda.  In his case, the two key people happen to be Larry Carter (CFO of Cisco, and five years older than Chambers, erego not someone aspiring to Chamber's job), and to John Morgridge, non-executive chair of Cisco and former CEO.  Who in your universe is similarly experienced, and similarly devoid of an agenda?  Who could be?

And what about bad decisions, because when all is said and done, bad decisions happen to good people?  Useem tees up a doozy:  In the July 1863 Battle of Gettysburg, Robert E. Lee gave the famous order to a commander named Richard Ewell to "take that [strategic] hill, if practicable."  Historians evidently agree it was quite "practicable" for the Confederacy at that moment. 

But Ewell equivocated, and ultimately decided not to take the hill, despite urgent arguments to the contrary from colleagues on the scene.  Two days later, "failure to take that hill for the Confederacy fed directly into Pickett's charge, which is what ends Lee's campaign in Pennsylvania in the North, and it's the beginning of the end of the Confederacy."

After the war, Ewell admitted "mistakes were made" and he was responsible for "his share."  One historian, in fact, described it this way: "In the moments when Richard Ewell just stood there, some of the most consequential seconds in American history were ticking off. And he did nothing."

The moral?  When it is time to decide, be prepared.

Summing up?  Sure, I'll take this shot at it:

• As with many things, you learn to become a better decision-maker by making lots of decisions.  Practice, in other words.  Just temember, as our friend Mr. Liu at Lenovo exemplifies, to revisit them periodically to see whether they were any good.  Did you hit the notes?
• Pay scrupulous attention to when to decide:  Too soon is too uncertain, too late is too much missed opportunity.  The "70%/70%" rule seems about right to me.
• Gather your trusted, unbiased, raw facts advisors, and listen hard.
• When in doubt, adopt a "bias for action."

Now, courtesy of The Atlantic,we have not a whole answer but some intriguing data. 

We've seen geography-changing migrations before:  For starters, the mass immigration from Europe of the early 20th-Century, the influx of rural southern blacks into northern industrial cities in the post-WWII era, and of families in general out from cities to suburbs and exurbs, and now the immigration (legal and illegal) from Asia, Africa, and South America.

But this is another pattern of migration, one driven by intellect and talent rather than ethnicity or nationality.  It's a realignment, reduced to its simplest, of the well-educated vs. the less well-educated, and the increasing concentration in a few "special" places of—to recur to The Atlantic's analysis—college graduates.  And it's been going on for at least the past 40 years.  Visual aids are outstanding at clarifying how this works.

Here's the distribution, by county, of college graduates compared with the national average.  As of 1970 (below), the average was 11 college grads/100 residents; lighter orange indicates fewer than average, darker red indicates greater than average (from, since you asked, -20 less than average at the very latest to +39 more than average at the darkest red):

And 30 years later in 2000, when the national average was 24 college grads/100 residents, and the low/high band remains the same:

To my eye, the change is striking, almost inconceivably dramatic.  First of all, there was almost none of the lightest orange on the 1970 chart (-10 to -20 college grads/100 vs. the national average) whereas the 2000 chart shows, guessing, half the total area of the country consisting of that cohort.  Second, and at the opposite end of the spectrum, whereas the pockets of deep red were minuscule and widely dispersed in 1970, tiny islands here and there almost at random, by 2000 the deep red begins to demarcate and match what a clear-sky night-time photograph of the US from a satellite looks like with white-light concentrations at major urban centers and darkness in the rural countryside.

In case you were wondering, the statistics on post-graduate degrees follow the trend:  For example, in Washington, DC and Seattle, more than 20% of adults had an advanced degree in 2004, vs. 4% in Detroit and 2% in Newark.

So much for the facts.  What's going on?

As The Atlantic posits, this is part of it:

"The physical proximity of talented, highly educated people has a powerful effect on innovation and economic growth—in fact, the Nobel Prize–winning economist Robert Lucas declared the multiplier effects that stem from talent clustering to be the primary determinant of growth. That’s all the more true in a postindustrial economy dependent on creativity, intellectual property, and high-tech innovation."

"Places that bring together diverse talent accelerate the local rate of economic evolution. When large numbers of entrepreneurs, financiers, engineers, designers, and other smart, creative people are constantly bumping into one another inside and outside of work, business ideas are more quickly formed, sharpened, executed, and—if successful—expanded. The more smart people, and the denser the connections between them, the faster it all goes."

Finally, note what used to be important but no longer is:  Sheer size.  In earlier decades, economic growth and population growth went hand-in-glove, and economic growth meant greater opportunities more or less across the board for the resident population.

Today, the key is not where the largest numbers of people are but where the largest numbers of highly-skilled, flexible and adaptive, people are.  And in turn, the economic, psychic, and cultural returns on having large aggregations of diversely skilled, highly educated, people who are willing to exercise career mobility and acquire new capabilities, are outsized. 

Does what we see today portend what we'll see tomorrow?  The short answer is that incumbency in this particular race is more powerful than in the most corruptly gerrymandered Congressional district.  So if  your firm has a preponderance of offices in the red zone, consider yourself blessed.  If not,....

The "Global 100" is out, presented jointly in The American Lawyer and in The Lawyer.  Like the AmLaw 100, the "Global 100" ranks firms by revenue (as opposed to, say, lawyer headcount or profits per partner), and here are some of the highlights.

First, the top ten:

Now let's get behind the numbers:

• 75 of the 100 are US-headquartered
• 17 are from the UK
• 5 are Australian
• 1 is Canadian (McCarthy Tetrault at #77)
• 1 is French (Fidal at #82) and
• 1 is Dutch (Loyens & Loeff at #99)

In other words, 98 of the Global 100 are from the former British Empire. Can this be accidental?  If not, why such a concentration?   Is something going on here that we can say anything meaningful about?

I would suggest two things:

• The most obvious, first, is that English is the de facto language of global business.  This is true not only for US or UK multinationals, but for firms like Nokia that could ostensibly choose another language.  Fluency in English—as first, second, or nth language—is a condition of employment, for example, at McKinsey.  As one partner there put it, "How can we pretend to be a 'one-firm firm' without a common language?"  Nor has it seemed to hamper their search for talent.
• But far more important, I believe, is that the Anglo-Saxon heritage of the common law is infinitely elastic; it's not limited to what the drafters of the Napoleonic Code have already dreamed up or specified as permissible or do-able.  Every day common law courts are presented with "unprecedented" questions which, as they are resolved, settle the expectations of those similarly situated and, thanks to the newly minted precedent, provide genuine guidance for future behavior. 

The second point means simply this:  If you want to specify the template for a junk bond, say, describing that security in English under the common law system is pretty much the only realistic option you have.  (By the way, an unheralded aspect of Michael Milken's true genius was to do just this, and thus make the hitherto-heterogeneous world of junk debt one homogeneous species, tradable commodites which investment bankers and brokers could slice and dice into known quantities, "tranches," baskets, etc.)

Combine the presumption of the enforceability of contracts (securities indentures, e.g.) with the willingness to indulge the voluntary agreements of consenting adults, and global markets become possible—global markets, importantly, in financial instruments hitherto unimagined.

I'm not arguing that the traditions of Anglo-Saxon common law are intrinsically superior to other systems (our law libraries overflow with bizarre, wrong-headed, baffling, and just plain clueless opinions), but I am arguing that it is:

• malleable, flexible, and extensible; and
• once extended, can with reasonable confidence be relied upon.

There's a deep analogy here to US securities law, at least pre-Sarbanes Oxley.  "Classic" securities law, near and dear to my heart and head, can roughly be summed up thus:   "You can do anything, so long as you faithfully disclose it."  The common law extends a similar invitation.

But the second reason is well expressed in today's WSJ article, "Silicon Valley's Outsiders:  In-House Lawyers?," which posits that in-house lawyers are still seen "as a block to the execution" of companies' plans, that they have "one hand tied behind [their] backs," (this from Mark Michael, the GC of 3Com from 1986 to 2003), and that "you're just not empowered or funded."

Too well do I know this tale.   Year after year after year at budget time I have seen law departments plead, beg, and otherwise prostrate themselves before the "real" businesspeople.  You can imagine this would become tiresome.

Covering it would also make for a rather boring publication:  So that, in a nutshell, is why "Adam Smith, Esq." essentially never has, and dollars to doughnuts never will, address in-house departments.

But what if we had some real data?  Well, guess who does?  McKinsey looked at some 230 businesses from around the world over the past four years, interviewing over 110,000 individuals, and has distilled the results into some fundamental insights—which, blessedly, accord strongly with intuition—about what really matters in driving organizational excellence.

First, let's start with the sacred cows due for a de-bunking.  I can't do better than their summary, so here it is:

* The carrots and sticks of incentives appear to be the least effective of the four options commonly used to motivate and encourage employees to perform well and stay with a company.

* Applied in isolation, KPIs ["key performance indicators"] and similar control mechanisms (such as performance contracts) are among the least satisfactory options for improving accountability.

* Relying on a detailed strategy and plan is far from the most fruitful way to set a company's direction.

* Command-and-control leadership—the still-popular art of telling people what to do and then checking up on them to see that they did it—is among the least effective ways to direct the efforts of an organization's people.

Now, we know you were at zero risk of employing #4, and #3 is straight from the school of enshrining dusty 3-ring binders on bookshelves, but don't ##1 and 2 surprise you?

First, let's get fundamental organizational hygiene down.  McKinsey identifies what it describes as no fewer than 34 management practices at which your firm must be competent in order to even be in the race.  Fortunately for your sanity, there are actually only nine, although there are multiple ways to satisfy each.  An example will clarify.  "Direction," a/k/a where the firm is headed," is one of the nine top-level categories, and per McKinsey your options are:

• Visionary: top-down, attractive, personally meaningful
• Directive/strateigc: top-down specifics for achieving a goal
• Engagement:  driven by input from below

You get the idea.

Back to what really creates organizational excellence, which McKinsey has identified as causally related to financial outperformance.  The three key characteristics are:

• Clear roles, and accountability;
• An inspiring vision of the future, a direction; and
• A trusting culture, an environment of trust, openness, and challenge.

I told you they'd be in intuitive accord with what you know in your heart matters.

As McKinsey puts it, "Employees perform well when they are working toward a future that attracts them, know when they can operate freely, and are encouraged to improve constantly."  Whether or not you have on your bedside table a representative sampling from the current management best-seller list, we're all subject to the winds of fashion. 

"But the evidence from McKinsey's database suggests that a company's performance and underlying health are much more likely to be improved by a combination of complementary practices—especially those that provide for clear accountability, help set goals and priorities, and encourage a high-performing corporate culture. Top managers would be wise to base their actions on this evidence of proven success."

I would add this, importantly:  These McKinsey findings, albeit derived from corporate-land, have particularly dramatic application to law-firm-land.  After all, if there's anything that motivates high-performing, highly-demanding, Type A professionals, it's precisely the environment envisioned by these criteria:  An inspiring, well-articulated vision of the future; a clearly defined role for how you can contribute to getting there; and an environment of autonomy, independence, and collegiality every day.

Would you like to work at a firm like that?  So would I.