LAST WORD: Big Firm, Itty Bitty Brain
Lexpert, May 2006
I have known and loved (or do I mean laughed?) Canadian law firms for almost a decade, and my love affair with the profession has one and only one raison d’etre: it’s chokful of uber-smart people. So in the opening days of our romance, I was frequently shocked, dismayed and just plain disappointed when large groups of these incredibly intelligent people made atrociously bad decisions.
I’m not talking brown socks with a blue suit or clip-on suspenders here. I mean dropping the ball on critical business, marketing or recruitment decisions. You know: choosing a managing partner for a greenfield operation who is so territorial, he won’t let you recruit any real talent. Recruiting a high-priced lateral guaranteed to die of culture shock in his new home. Not “buying” the name of the firm you merged with. Lest you think these brain misfirings are limited only to the Canadian market: introducing a lockstep compensation system into the New York market… The list goes on.
Wiser and older by 10 years (Happy anniversary, baby! What’d you get me?), I finally understand what’s going on here. It’s a plummeting EQ–no, not the emotional intelligence thing your human resources people have been trying to ram down your throat. Encephalization Quotient, more prosaically known as brain-to-body mass ratio–a useful guide for determining the relative intelligence of an organism. The formula goes roughly like this: the higher the ratio–that is, the more mass the brain takes up relative to the body, the more intelligent the organism. Humans like this scale, because we have a killer EQ, as do dolphins. (And tree shrews–what’s up with that?) But take pretty much any of the bigger dinosaurs, and the reverse is true: giant body, itty bitty brain.
As you are all overeducated, very smart people, you see where I’m heading… and you probably don’t like it. The bigger law firms get, the lower their brain to body mass ratios get… and so, the more likely they are to make dumb, dumb decisions. It’s inevitable, and I’m not complaining about the crippling paralysis of consensus seeking in a firm of 300 partners. I’m talking about the inevitability of big firms eventually recruiting… oh, how do I put this delicately? dumb, dumb lawyers.
The insight, I hasten to protect my behind, is not mine. It comes from a cranky partner whose colleagues want to double the size of a regional office in a couple of years–without diluting Firm X’s “brand.” The trouble is, he says, when you grow by 30 lawyers in a year, you’re pretty much guaranteed to dilute that brand. Twenty years ago–heck, 10 years ago!–there were only three or so lawyers deemed “good enough” to join the firm every year; some years, there was none at all. There are just three or so lawyers in that class now, the explosion in law school graduates notwithstanding. Maybe five. Six, if you don’t mind someone who swears at his secretary. Thirty? Nah. Yet the number of law firm offices growing, or wanting to grow, by that number… let’s just say it’s more than one.
An ongoing poll at Adam Smith Esq (www.adamsmithesq.com) is looking to determine the profession’s opinion on the “natural” end size of global law firms. Conventional wisdom has placed no cap on it, suggesting they experience mamooth growth a la the accounting firms. While I do not wish to unilaterally offend all my accountant friends (I have accountant friends… when did I get that old and boring?), I have no compunction about suggesting that as the accounting firms grew, their EQ plummetted. Does anyone think that all the professionals at any of the Big Four are of the same intellectual calibre? There is the top-five percentile of stars that make the firm what it is. And there is a bottom-50 percentile that drags down its overall EQ. (Query: was it the stars or drones who lead to the downfall of Arthur Andersen? Hmmm…)
Here’s the thing: I think accountants can handle it. That is, the accounting firms need a sizable contingent of drones. Law firms most emphatically do not. For lawyers, “dronism” is a larval state they experience at the beginning of their careers. By the time they get to partner, they should be building up the firm’s brand–not diluting it by adding more to its body mass than its brain. The bigger a firm gets, the harder it is to ensure that the folks who get to partner are performing at this level, and the more mediocre and just plain inadequate candidates get through.
You know I’m right. Let’s not pick on our nearest and dearest, but… do you really think there are no dumb lawyers among the 3300 at Clifford Chance? (Don’t tell me there no dumb lawyers–you’ve sat next to them in law school and opposite a board room table, wondering how they got that far. I’ve suffered through conversations with them, wondering the same thing… No, I don’t mean you. I love you. You’re brilliant. I’m talking about him.)
The solution, I believe, will be a natural selection-driven cap on the size of top-tier law firms. That’s not to say we won’t see multi-thousand global, or perhaps even Canadian, law firms. The dinosaurs ruled the Earth before they went extinct. But the cream of the cream, the end-five who are going to rule the Canadian marketplace… here’s the bet I’m making: they’re not going to be 30-lawyer partnerships. But they’re not going to be the country’s biggest law firms. They’re going to be the ones who find a balance between brains and body mass that favours the brains side of the equation.
Don’t believe me? Look at how the top transactional or business law firms in key Canadian markets haven’t grown.
Marzena Czarnecka is a Calgary-based freelance writer and frequent Lexpert contributor. Upon reflection, there may be a second reason for her love affair with Canadian law firms. Loving a profitable profession is, umm, profitable. Thank you, baby. You don’t need to get me anything else.