Friday, November 10, 2006


New York City

rodrigo gonzalez fernandez
director, consultajuridica

Dear rodrigo:

October and, with luck, November in New York are the most beautiful months of the year here, as many of you know.  Everything seems to come together:  A new sense of purpose, the "new season" across the arts. social events, and even the climax of baseball and the kickoff of football, combined with spectacular weather, make it, year after year, the grandest season.

I'd like to believe it's been a fruitful period for "Adam Smith, Esq.," as well, but it is only in the eyes of you, Dear Reader, that that is or is not true.

So forthwith to some of the "greatest hits" of the past few weeks:

  • You've heard all the biz-speak/managerial mantras of the past decade or two ("Management by Objective," "Management by Walking Around."  "Re-engineering."  "Six Sigma," "The Seven Habits of Highly Effective People," "Who Moved My Cheese?," etc.  If you're exhausted just reading that list (I am), here comes McKinsey to tell you it actually boils down to Just Three Things.
  • Pop quiz:  Of the "Global 100" law firms, how many are US, UK, or former-British-Empire (Canada, Australia, etc.) based?  Tick-tock-tick-tock...  98.  No kidding.  I offer a theory of how that remarkable implausibility could be explained.
  • Is the geographic distribution of brainpower (or its proxy, college and graduate degrees) changing in the US?  Yes, it is.  Is your firm where the brains are?
  • I've written about "Social Network Analysis" several times, but now "SNA 2.0" has moved from simply analyzing the structure of the informal, but powerful, networks within your firm to quantifying their value.  What would it be worth to you to know that 20% of the value of a particular group was about to resign?
  • Finally, what can  you as a leader of your firm learn from Andy Grove of Intel?  Start with brutal honesty, and an ability to stand outside yourself and outside the situation to reinforce your objectivity.

I'd also like to direct your attention to the "Adam Smith, Esq. Monthly Book Review," this month of James Buchan's The Authentic Adam Smith (W. W. Norton & Company, Inc.: New York, 2006).  Read about it here.

For our bonus, newsletter-only content, we have a look at the UK Magic Circle firm Slaughter & May, courtesy of last month's American Lawyer.  This won't be an exhaustive examination of Slaughter & May, but, I hope, will leave you with some insights about a distinctive—dare I say unique?—firm.

The 117-year-old firm, with 522 lawyers including 126 partners, has not only a lockstep compensation structure, but a two-tier structure, with those in the top tier earning twice as much as those in the lower tier (it takes 10 years to move to the higher tier).  Compared to this 2:1 ratio, 2005 AmLaw 100 firms that responded to the question reported an average spread of 10:1 from highest to lowest.  But Slaughter & May's 2005 PPP was more than $2-million (more than double its 1998 results).

Slaughter & May has other remarkably distinctive characteristics:

  • It's intensely London-centric, having recently closed outposts in New York, Paris, and Tokyo, and maintaining only one foreign outpost of consequence, in Hong Kong.
  • But it has by no means forfeited overseas opportunities, instead concentrating on establishing, cultivating, and maintaining a "network of best friends" across Germany, Italy, Spain, France, and even the US (notable "best friends" here include Cravath, Davis Polk, and Simpson Thacher).
  • Culturally, the firm is sui generis.  Not only is its managing partner, Tim Clark, age 55 (son of a Slaughter & May partner), dismissive of modern management practice, he embraces old traditions while being aware of the antiquarian nature of some (if you just begin The American Lawyer story, you'll hear about the napkin rings).
  • But unwritten rules are just as important:
    • No lateral partner hires
    • No partner departures to other firms
  • And most important, the following (emphasis supplied):
    "Slaughter has no hourly targets, for example, but there is tremendous peer pressure to work hard for the good of the firm, say Slaughter partners and associates interviewed for this story. "The overriding thing about the firm was that you felt you owed the firm more than the firm owed you," says Francis Neate, who spent 34 years at Slaughter and May and is now of counsel at Kirkland & Ellis (following a decade at Schroders plc., an asset management company) and president of the International Bar Association. "It had a living strength. You felt guilty if you didn't pull your weight." The unspoken pressure often leads to early burnout. "You do the same work at 55 as at 33," Clark says, and while "some partners are doing that with vigor and enthusiasm," the overwhelming majority of partners retire by age 60."

As for the network of "best friends," is it a high maintenance creature?  Yes, of course; but its benefits are perceived to outweigh its maintenance costs, both financial and in terms of managerial overhead:

"All [the members of the network] were under pressure to globalize, but didn't want to do so by merging with a large, international firm. "There is an advantage to being rooted in our own country," says Umberto Nicodano, Bonelli's managing partner. "We know the courts, we know the system. Rarely, if ever, are the global firms able to establish these relationships." Practically speaking, Slaughter's Frank says, staying small keeps overhead low, keeps the firm cohesive, and makes it easier to pursue common goals than if lawyers were spread around the world. Furthermore, the fact that other firms don't feel that Slaughter is encroaching on their space makes the British firm attractive to work with, Frank says. In the mid-1990s, several years after their first discussions, the group realized that to compete with the global firms, they needed to do a better job of articulating their vision. So the firms drew up a list of basic criteria to define the relationship: Members are independent law firms based primarily in one country. Relationships are nonexclusive; legally, nothing binds the firms together."

So couldn't it all fly apart?  Well, that's a risk you live with.  My friend Tony Williams puts it in perspective: "Their business is sustainable as long as their best friends don't try and do something different," he says. But then he pauses. "So-called problems at Slaughter and May are problems that managing partners at other firms would die for," he adds.

Slaughter & May is not your firm, nor is it a model for all.  But it has a voice, it has a distinction, it matters to our profession.  You have permission to "think different."

As always, I invite thoughts, comments, and observations.  

That wraps up the "Adam Smith, Esq." monthly newsletter for November 2006.

My parting wish is that you let me know how I can make it sharper, more useful, more helpful.  "Adam Smith, Esq." is, in my mind, not a "blog," but a publication.  More than one of you has compared my site to other prominent legal industry trade journals, and said that the advantage of the online medium is being able to publish as many times per month as seems warranted.  I happen to agree, and I want you to know that the editor (that would be me) is always in, and always delighted to hear from my valued readers.

Best regards,



Legal Blog Watch

In-House Bloggers Slowly Step Out

One group of lawyers has remained largely absent from the blogosphere, reports Catherine Aman in Corporate Counsel magazine: the in-house bar. It is no wonder in-house lawyers are reluctant to blog, legal consultant Rees Morrison of Hildebrandt International tells Aman: "There are a lot of ways blogging by in-house counsel could go wrong." Even so, she writes, the number of in-house lawyers who blog is growing steadily -- some with the company's blessing, others anonymously.

In-house lawyers who blog share a "desire to participate in serious dialogue, whether it be about public policy or emerging technologies and related laws," Aman say. She quotes Microsoft Corporation lawyer David Rudin, who writes the blog Standards Law:

"My participation in the blogosphere, both as a reader and contributor, helps me be more effective in my role as an attorney. It keeps me up to date on the issues the community feels are most pressing. Likewise, I enjoy being part of the broader conversation on legal IT issues."

Other in-house lawyers who openly blog include Mike Dillon, GC of Sun Microsystems, and two of the 10 contributors to Cisco High Tech Policy Blog. But for some on the inside, such as The Wired GC, blogging is best done anonymously.

Microsoft's Rudin maintains that blogging is good for in-house lawyers and good for their employers.  He tells Aman:

"We have an opportunity to provide a human voice and perspective to our company's actions and positions. The information in the blog comes from a single attorney and expresses my own views. Those views are influenced by the company's point of view, and it's my goal to be an effective advocate for Microsoft's positions."

Posted by Robert J. Ambrogi on November 6, 2006 at 12:10 PM | Permalink | Comments (0)

The Only Two Blawgers in Iowa

Could Rush Nigut and Brett Trout do for blawging in Iowa what Prof. Harold Hill did for marching bands? From Dennis M. Kennedy at Between Lawyers comes a pointer to The Gospel of Blawging, a Des Moines Business Record story about Iowa's only two lawyers with blogs and their newfound mission to spread the word among their peers. Nigut, a business and corporate lawyer with Sullivan & Ward in West Des Moines, writes the blog Rush on Business, and Trout, a solo patent attorney in Des Moines, writes Blawg IT.

The two lawyers will join forces to "spread the gospel" of blawging at a seminar for Iowa lawyers later this week. Trout tells the Business Record:

"From what we can tell, we really are the only attorneys in Iowa doing this. And it's such a great tool that if we could keep it to ourselves and not let anyone else use it, I know I would in a heartbeat. But it's like the Internet. How are you going to keep it a secret? So we thought we would help get the word out ourselves."

What do Iowa's only two legal bloggers see as its value? For one, says Nigut, blogging encourages the sharing of ideas.

"You get to see some really great minds discuss the issues in your field, and then you yourself can chime in with your opinion. I've learned so much since I started this that I never would have encountered otherwise."

As for the lack of other lawyers in their state with blogs, Nigut explains it this way: "Lawyers are very reluctant to be the first ones to do anything." But that is changing as more younger lawyers join the profession's ranks. "It's a generational thing," Nigut says.

Sounds like Trouble, with a capital T and that rhymes with B and that stands for Blawg.

Posted by Robert J. Ambrogi on November 6, 2006 at 12:09 PM | Permalink | Comments (0)

For Women Lawyers: Good News, Bad News

Blogger Chuck Newton points us to the newly published study from the National Association of Women Lawyers, NAWL's First National Survey on Retention and Promotion of Women in Law Firms. The news is not good. The survey finds law firms have plenty of women at their lowest level but a paucity at the top. From the survey:

"[W]omen lawyers are well-represented at the lowest level of the profession, constituting 45% of associates, but not at the top of the profession. While women account for close to half of law firm associates, they account for 28% of of-counsel lawyers and 26% of non-equity partners. At the top level of law firm partnership, women account overall for 16% or 1 out of every 6 equity partners. Representation in the equity partnership during prime earning years (between 10 and 25 years experience in the profession) is a little better; in that group, women account for about 20% or 1 out of every 5 equity partners. Among the most junior equity partners, women account for about 24% or 1 in 4."

It gets worse. Even women who achieve the status of equity partner tend to earn less than their male counterparts and play a lesser role in firm governance. On average, women hold only 16 percent of the seats on their firms' governing committees and make up only 5 percent of managing partners.

But the good news for women lawyers, as Carolyn Elefant writes at MyShingle.com,  is that they are finding it easier than ever before to build successful careers in solo and small-firm practice.

"As the barriers to starting a law firm decrease, more and more women are successfully starting firms ... and don't need to settle for the sham part time programs that some firms initially put in place."

In fact, Elefant argues, these solo women are helping to improve working conditions for their peers at larger firms. Pointing to a Boston Globe article on greater part-time opportunities for women at larger firms, she says it is because solo and small-firm practice has become a viable option for women that larger firms are forced to better accommodate their need for flexible and part-time schedules. Call it, if you will, the "trickle-up" effect: broader options for women in smaller firms force larger firms to follow suit.

Posted by Robert J. Ambrogi on November 6, 2006 at 12:07 PM | Permalink | Comments (0)

A Vote for Blawg Review #82

Word has it, there's an election of some kind tomorrow. That would explain why Blawg Review #82 is hosted by Edward Still at the blog Votelaw. Still, a lawyer in Birmingham, Ala., is an expert in the laws relating to elections, voting and campaign finance. Appropriately, he starts this week's review of legal blogs with "some election-related stuff." Thankfully, he also gathers a number of items "for those of you who don't give a damn about elections." Even those readers who place themselves in the second group will enjoy at least one of the items from the first group: Madeleine Begun Kane's limerick for Jack Abramoff, Chatty Jack. Head over to Still's blog and register your vote for Blawg Review #82.


Posted by Robert J. Ambrogi on November 6, 2006 at 12:04 PM | Permalink | Comments (0)



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