Advocacy Matters - Spring 2024

Dunn (two members of the three-person executive
team leading the closure of Minden Gross
LLP) and Norman Bacal (former managing partner
of Heenan Blaikie LLP). We spoke about
law firms and common trends more generally,
as opposed to Minden Gross LLP and Heenan
Blaikie LLP, in particular.
Two common themes emerged in our discussions.
First, without constant attention and focus, law
firms can coast, losing a clear and common sense
of direction over the years, especially when partners
are making healthy money. “Ignorance is
bliss,” says Sallese. “Nobody wants to have hard
discussions when they are making money.” During
a financial downturn, however, all the issues that
could have, and should have, been proactively addressed
previously can rear their ugly heads.
Second, lawyers do not necessarily make the
best leaders. In some law firms, the leaders are
the highest billing partners. But excellence in
attracting and providing legal services to clients
does not necessarily translate into being an effective
law firm manager. “How are managing
partners chosen?” posited Bacal. “How many
hold an MBA degree, or other leadership and
management training? In what other company
would you choose a CEO without leadership or
management experience? Leadership doesn’t
come naturally to everyone and in law schools,
it isn’t taught.” Point taken.
I suspect these themes are common for
many other law firms who have yet to reach
the breaking point. Sallese agrees, and wisely
warns: “I genuinely believe that Minden Gross is
the proverbial canary in the coal mine. If I could
offer one piece of advice to law firms who may
be in a similar situation, it is to look inward, get
a hold of your finances and how each partner is
compensated now while things are positive. Get
your house in order.”
What are some of the warning signs of a potential
closure? “Partners having increased
hushed meetings with one another behind
closed doors,” notes Sallese. Another common
theme is an unusual “quietness” in the firm.
“Trust the staff,” says Bacal. If legal assistants
and law clerks appear unusually stressed, there
is a reason for it.” Another sign is unprecedented
discussions or memos about “cost-cutting”
measures, notes Dunn.
Finally, with respect to advice to law firms
who may find themselves on autopilot while
still earning a healthy profit, Bacal stresses we
need to revisit law firm culture. “The partnership
needs to determine the culture they want.
Is it ‘people over profits’, ‘teamwork over the
individual’, a ‘churn and burn’ profit-maximizing
model, or something else? Grapple with the
overall philosophy and then start building your
tactics. Everything you do should be consistent
with that philosophy.”
Sallese suggests that partners need to start
“acting like owners. Understand what you own,
understand the value you bring to the firm and
the value of your other partners. Keep an eye
on expenses and don’t sit back believing ‘other
partners’ have it under control”.
Dunn makes another important point. “Be
transparent with one another and recognize
that partners can contribute to the overall success
of a firm in different ways. When times get
tough, the value a partner brings tends to become
their revenue exclusively. This can lead
to divisions, resentment, and a lack of cohesion
amongst partners.”
All these points make good sense. Will law firms
learn from these high-profile closures over the
past decade, or continue the status quo while
partners continue to be well compensated? Only
time will tell. Sallese offered a final thought: “If
you were sick, wouldn’t you want to know the diagnosis
sooner rather than later so you could do
something about it? I don’t understand why law
firms would be any different.”
As mid-career advocates, many of us are new
partners and we bring fresh perspectives. We
can help keep our firms on track by asking
thought-provoking questions about culture and
compensation, and challenging the status quo
where warranted.
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