Why lawyers make terrible managers

“After spending 25 years saying that all professions are similar and can learn from each other, I’m now ready to make a concession: Law firms are different.
The ways of thinking and behaving that help lawyers excel in their profession may be the very things that limit what they can achieve as firms. Management challenges occur not in spite of lawyers’ intelligence, but because of them.”

DAVID MAISTER Strategy and the Fat Smoker (2008)

I return to a favourite book this week. David Maister is a global authority on the management of professional-services firms, working as a consultant, author, lecturer and speaker. His book, ‘Strategy and the Fat Smoker’ is a regaling collection of insightful pieces.

My excerpt today concerns lawyers; and specifically, why lawyers tend to make such bad managers. Unlike most doctors, lawyers actually have to be managers; successful ones usually build large firms and span geographies. But, as most of you can probably confirm, they are generally terrible at running those firms.

Yet these are highly intelligent, highly trained individuals. With his wealth of experience, Maister points out that it is probably BECAUSE of their training and mindset that lawyers make bad managers. He pinpoints several reasons; I focus on three below.

First, lawyers have problems with trust. They are professional sceptics, trained to be pessimistic and to fear and expect the worst. As Maister’s own lawyer brother-in-law told him: “I am paid to have a nasty, suspicious mind.” The problem is, lawyers end up mistrusting not only their clients and adversaries, but their own partners and employees.

In such a low-trust environment, it becomes very difficult to build large, diversified firms with uniform quality standards. Decision-making structures and compensation systems become especially problematic.

Secondly, lawyers are conditioned to be professionally detached and dispassionate. They tend to score very low in social skills and intimacy. They believe in roles rather than relationships. Good business, however, is essentially about people: understanding them, motivating them, involving them. Lawyers tend to be tone-deaf when it comes to these things – with their clients as well as their employees. The management tools they use are the more clinical type: performance scorecards that emphasize capacity utilization and fee metrics, rather than coaching and mentoring.

Thirdly, lawyers struggle with collective decision-making. The essence of their training and everyday practice is to be in a contest with others – to attack their ideas and disprove them. Put those same people in a room to make collective decisions, and watch what ensues. Endless theoretical expositions; vicious cross-examinations; pompous sabre-rattling; much recording of minutes. At the end, because no judge is present, the parties depart without a decision having been made.

Those of you who have dealt with firms of lawyers, or work in them, will probably be nodding vigorously at this point. Maister suggests that the standard legal-firm business strategy – work long hours, slash all costs, ignore personal issues – can only go so far. Law firms require a cultural revolution, and need to be taught the basics of trust and collaboration from scratch.

He recommends that most large firms should hold a ‘constitutional convention’ to discuss the values and behaviours that their lawyers need to adhere to – and being lawyers, they must also spell out some rules and penalties for non-compliance.

For long as all law firms remain managerially dysfunctional but keep making high profits, change is unlikely. The pressure will come from clients, particularly the larger, more complex ones who are frustrated with a lack of alignment to their own operating practices, and who will demand consistent quality and cross-boundary collaboration, not just a reliance on ‘star lawyers.’ Legal firms who catch the wave of change early will be the ones that thrive in future.

When you find one like that, do let me know…

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