Advocacy Matters - Spring 2024
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Dunn (two members of the three-person executive<br />
team leading the closure of Minden Gross<br />
LLP) and Norman Bacal (former managing partner<br />
of Heenan Blaikie LLP). We spoke about<br />
law firms and common trends more generally,<br />
as opposed to Minden Gross LLP and Heenan<br />
Blaikie LLP, in particular.<br />
Two common themes emerged in our discussions.<br />
First, without constant attention and focus, law<br />
firms can coast, losing a clear and common sense<br />
of direction over the years, especially when partners<br />
are making healthy money. “Ignorance is<br />
bliss,” says Sallese. “Nobody wants to have hard<br />
discussions when they are making money.” During<br />
a financial downturn, however, all the issues that<br />
could have, and should have, been proactively addressed<br />
previously can rear their ugly heads.<br />
Second, lawyers do not necessarily make the<br />
best leaders. In some law firms, the leaders are<br />
the highest billing partners. But excellence in<br />
attracting and providing legal services to clients<br />
does not necessarily translate into being an effective<br />
law firm manager. “How are managing<br />
partners chosen?” posited Bacal. “How many<br />
hold an MBA degree, or other leadership and<br />
management training? In what other company<br />
would you choose a CEO without leadership or<br />
management experience? Leadership doesn’t<br />
come naturally to everyone and in law schools,<br />
it isn’t taught.” Point taken.<br />
I suspect these themes are common for<br />
many other law firms who have yet to reach<br />
the breaking point. Sallese agrees, and wisely<br />
warns: “I genuinely believe that Minden Gross is<br />
the proverbial canary in the coal mine. If I could<br />
offer one piece of advice to law firms who may<br />
be in a similar situation, it is to look inward, get<br />
a hold of your finances and how each partner is<br />
compensated now while things are positive. Get<br />
your house in order.”<br />
What are some of the warning signs of a potential<br />
closure? “Partners having increased<br />
hushed meetings with one another behind<br />
closed doors,” notes Sallese. Another common<br />
theme is an unusual “quietness” in the firm.<br />
“Trust the staff,” says Bacal. If legal assistants<br />
and law clerks appear unusually stressed, there<br />
is a reason for it.” Another sign is unprecedented<br />
discussions or memos about “cost-cutting”<br />
measures, notes Dunn.<br />
Finally, with respect to advice to law firms<br />
who may find themselves on autopilot while<br />
still earning a healthy profit, Bacal stresses we<br />
need to revisit law firm culture. “The partnership<br />
needs to determine the culture they want.<br />
Is it ‘people over profits’, ‘teamwork over the<br />
individual’, a ‘churn and burn’ profit-maximizing<br />
model, or something else? Grapple with the<br />
overall philosophy and then start building your<br />
tactics. Everything you do should be consistent<br />
with that philosophy.”<br />
Sallese suggests that partners need to start<br />
“acting like owners. Understand what you own,<br />
understand the value you bring to the firm and<br />
the value of your other partners. Keep an eye<br />
on expenses and don’t sit back believing ‘other<br />
partners’ have it under control”.<br />
Dunn makes another important point. “Be<br />
transparent with one another and recognize<br />
that partners can contribute to the overall success<br />
of a firm in different ways. When times get<br />
tough, the value a partner brings tends to become<br />
their revenue exclusively. This can lead<br />
to divisions, resentment, and a lack of cohesion<br />
amongst partners.”<br />
All these points make good sense. Will law firms<br />
learn from these high-profile closures over the<br />
past decade, or continue the status quo while<br />
partners continue to be well compensated? Only<br />
time will tell. Sallese offered a final thought: “If<br />
you were sick, wouldn’t you want to know the diagnosis<br />
sooner rather than later so you could do<br />
something about it? I don’t understand why law<br />
firms would be any different.”<br />
As mid-career advocates, many of us are new<br />
partners and we bring fresh perspectives. We<br />
can help keep our firms on track by asking<br />
thought-provoking questions about culture and<br />
compensation, and challenging the status quo<br />
where warranted.<br />
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