Post #621 – September 6, 2012

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Post # 620 – Monday, August 20, 2012

Social Media is Now Among Top Areas of Risk               

It is interesting how seemingly harmless social networking activities don’t hint at the dangers many are discovering with social media.

Exhibit One:  I noted that with the advent of more law firms appointing or hiring internal pricing professionals to work with their practice groups and lawyers, someone decided that maybe it would make sense to launch a Linkedin group exclusively dedicated to allowing these professionals to network and discuss common issues.  The initial thought was immediately greeted with responses from many warning about the possible anti-trust implications involved with sharing information or being perceived to be potentially discussing subjects that were entirely, shall we say: “inappropriate.”

Exhibit Two:  I’ve just completed an assignment with an AmLaw 100 firm assisting the elected Board with the selection of their next managing partner.  As part of the process we had hundreds of partners providing anonymous feedback to me (as the objective third party) on one or all of the four candidates.  Part way into the process it dawned on a couple of the board members that special precautions should be taken to prevent any commentary from leaking and then potentially going viral.  The “viral” aspect of social media – a comment’s ability to go worldwide in a very short amount of time – is what can make social media a conduit for unintended embarrassment and risk.

Exhibit Three:  A new survey of US executives, including many at multinational companies, found social media is one of the top five risks that organizations now face. The Deloitte's report: Aftershock: Adjusting to the New World of Risk Management claims that 27% of survey respondents predict that social media is among their most important risk sources over the next three years.  The global economic environment (41%), government spending (32%) and regulatory changes (30%), respectively, were the top three expected risks identified by executives in the survey – and the only ones named by a higher percentage of respondents than social media.  “Social media wasn’t even on the radar a few years ago – now it’s ranked among the top five sources of risk,” Henry Ristuccia, Governance, Regulatory & Risk leader at Deloitte Touche Tohmatsu Limited, said in a news release.  “The rise of social media is just another contributor to the volatile global risk environment that companies are being forced to navigate.”? ?

Recognizing the risk may be the first step toward managing it.  That said, does your firm have any plan for how it would respond to a crisis that goes “viral” through some social media network?

Post #619 – Monday, August 13, 2012

What Does A Practice Group Leader Actually Do?

Now this could be seen as a pretty strange question for one to ask . . . if it weren’t for the fact that so few law firms seem to have effectively answered this question.

Twice a year I have the privilege of conducting a one-day master class for new practice group leaders, usually held at the University of Chicago and hosted by the Ark Group.  Over the years I have now conducted about a dozen of these sessions and in all cases the participants comprise firms of over 100 attorneys in size including the likes of Jones Day, Kirkland & Ellis, Morgan Lewis, Sidley Austin, Weil Gotshal, Winston & Strawn and so forth.  Amongst a number of opening questions I pose to the entire group at the beginning of the day, is to inquire how many of them have a formal, written job description.  At my last master class this past June, out of a group of 26 participants, ONLY three hands went up – which is pretty typical of the responses I obtain.  What I didn’t ask, of those who had responded in the affirmative, is to tell us specifically what their job description entails.  I’ve since learned that that would have made for the perfect follow on inquiry.

To read the complete article - download the PDF.

The above represents my latest column for Slaw.ca   Slaw identifies itself as “a cooperative weblog on all things legal.”  Slaw has been publishing for five years and gets 30,000 unique visitors and about 100,000 visits every month.  For the past two consecutive years it has been the winner of three different awards as the best legal blog.  I’m honored to have been asked to become a regular columnist and invite you to comment on my latest meandering.

Post #618 – Wednesday, August 1, 2012

Hope For The Best – Prepare For The Worst

There is an old saying, "Hope for the Best and Prepare for the Worst."  Given recent financial reports, we might think we are already at or close to the worst.  But is hoping for the best enough?  On balance, I'd suggest that hope alone is not about to add a single dollar to your bottom line.  The essence of good leadership is to assess the harsh 'reality' of the situation and then take action.

Meanwhile, the Hildebrandt Institute’s Peer Monitor Economic Index reported that demand growth was slightly negative and rate growth was also weak for the second quarter.  These results, combined with a stagnating economy, leads Peer Monitor to predict a challenging economic environment for the remainder of 2012.  And I thought all of the various news reports indicated that the economy was picking up.

Every time I look at the news, every time I see a report on the job market or the housing situation, I see speculation that tries to suggest . . . “It’s another clear sign that the bottom may be close.”  Clear?  Not likely.  Economists show optimist that the housing sector may be showing signs of life one week and then the next, a new report emerges to dampen the enthusiasm.  Job growth?  First the number of new claims for jobless benefits decreases and then another major company announces more job reductions.  What should we believe?

Look at any number widely quoted in news reports today.  The greater the precision, the greater the lie.  Why?  Because economists really don’t know anything for certain.  The best they can do is observe, guess, and hedge their bets with a ‘maybe’ or a ‘possibly.’  The more precisely they claim to know something for sure . . . the greater the distance between what they can actually know and what they claim.  Numbers are to an economist what make-up is to an aging starlet – put on enough of it and maybe the folks won’t see the truth.

Behind every number is a wrinkle.  Small numbers hide small ones.  Big numbers hide bigger ones.  A big number, such as the unemployment rate, has a whole army of other numbers behind it.  There are the statistical adjustments, seasonal adjustments and enough arbitrary definitions to make a corpse look good.

The Bureau of Labor Statistics says that 8.2% of the workforce is unemployed.  Simple enough.  But what does it mean?  What’s the ‘workforce?’  And what does it mean to be “unemployed?’  Think of all those people who work for cash . . . are they unemployed?  How about the guy who couldn’t find a job, so he went back to school?  Is he unemployed?  What about the housewife who would like to find a job; sort of . . . but isn’t actively looking for one?  Are these people part of the workforce?

It’s obvious that you can change the assumptions a bit and change the reported unemployment rate a lot.  When statistician John Williams looks at the data, for example, he comes up with a real unemployment rate of 23% — almost as high as the jobless rate in Spain.  And here is another statistic to chill the blood in your veins . . . 77% of American businesses are NOT considering hiring anyone in the near future!

And yet, the BLS tells us that US unemployment is 8.2%.  Not ˜around 8%.’  Not ‘less than one in ten.’  But 8.2% - exactly.  And yet, there are so many slippery assumptions lurking in the shadows of this number that it is completely unreliable and practically meaningless.  Or worse.  It pretends to tell you something, but once you have taken it in you know less than you did before, because what you think you know is largely a fraud. 

Post #617 – Wednesday, August 1, 2012     

Lawyer Office Sizes Mimicking Dilbert

Wood paneling and large offices are going by the wayside at some law firms.  The idea is to cut office expenses and encourage cooperation, the Wall Street Journal reported last week.  Firms embracing this 21st century design are “shrinking private offices, swapping out walls for glass, and installing high-tech meeting rooms in dead space once occupied by law libraries and filing cabinets.”

Lawyer offices have decreased in size by 20 percent to 25 percent, according to Matthew Barlow, executive vice president at the brokerage firm Studley Inc.  Some firms, he said, are placing junior lawyers in interior space once used by administrative staffers.  Typical office sizes are 225 square feet for partners, the story says, and 150 square feet for associates.  In New York, however, many firms put two associates in an office. 

The story reports that this idea was first embraced by U.K law firms. Talk about a 360 degree turn of events.  I remember fondly my first assignment working with a London-based law firm in the early 90s.  At that time it was not unusual to see the traditional barrister’s desk in every office where the partner sat on one side and an associate (or two) sat on the other side.  All in a fairly small office by North American standards.

Fast-forward twenty years and we now see Allen & Overy opting for a “generic office size,” all with soundproof glass walls.  Others have implemented open-plan offices where lawyers sit at workstations separated by glass partitions.  And among the U.S. law firms is Paul Hastings, which is planning to make the changes when its leases come up for renewal.  The firm is also considering allowing some lawyers to work permanently from home.  Wow, what a radical concept!  The next thing you hear will be firms adopting a hoteling concept like the accounting profession has been doing for decades.