Is loyalty dead?

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Last Word: Is loyalty dead?

Lexpert, June 2006

by Marzena Czarnecka

You don’t have to tell lawyers that loyalty’s dead. They know, none better. Clients who used to send all-but-conflict work (and sometimes even that) are asking for RFPs and spreading the work among competing firms. Articling students laugh at guaranteed hireback; associates are looking out for number one, and partners… don’t get partners started on their disloyal, firm-hopping, file-snitching, credit-hogging colleagues. (Or, in Atlantic Canada–firm-hopping offices. Can ya’ imagine the scuttlebut on Bay Street if the Toronto office of, say, Ogilvy Renault did a secret merger with, oh, Torys? I’m not saying it’s in the works… but in today’s world, can you tell me it wouldn’t happen?) Loyalty’s dead and lawyers, among others, have killed it themselves.

Yet… they don’t really act like it, do they? And not just lawyers–business across the board hasn’t quite figured out how to operate in a loyalty-free universe. But let’s stick to the devil we know best: Canada’s major law firms still act as if they buy the loyalty myth. They spend $150,000 or so a head to train new lawyers who they know will take that training across the street. They take clients to concerts, hockey games and–in the Wild West anyway–the rodeo, knowing full well that same client will be picking up that same freebie from someone else next week. And most practice full disclosure of all of their competitive secrets to partners who are increasingly likely to end up in the enemy’s… I mean, competitor’s, camp. (Heck, before they change teams, they’re often sharing more than they ought to as they ride up and down the elevators in First Canadian Place).

They don’t do this out of a misguided sense of chivalry (chivalry in law firms… don’t get me started). They do this, frankly, because it’s what they did back when many articling students stayed with the firm until they became partners, the departure of high-level partners was a scandal not a fact of life, and clients only left if you really, really pissed them off. They do this because, when the fabric of loyalty started to fray, it seemed that behaviours like this should rebuild it. In other words, they do it, because they don’t know what else to do.

And what can they do? Exploit students and young lawyers without training them (not that some don’t do that anyway already) so that they are guaranteed to leave with really bad memories of the firm? Keep partners ignorant of, inter alia, a firm’s financial performance and long-term competitive strategy, is a surefire way to disenfranchise them from the firm long before they decide to leave. And client loyalty… that exists only in markets in which clients have no alternatives.

Actually, client loyalty is the easy part of the puzzle–at least if you interpret client loyalty as getting about half of the client’s most high-margin, high-profile work. (That is as law firms increasingly understand client loyalty–they are learning.) Superlative service, leading edge advice, competitive fees delivered via personable lawyers who build strong relationships with those fickle clients is what makes clients slightly less fickle. (Most law firms have number three covered, do pretty well at number two, are struggling with number one, and number four… the firm that gets those lawyers–and figures out how to keep them forever and ever–wins. Which brings us to the hard part of the loyalty puzzle.)

Let’s leave the junior spectrum out of the equation for now–expecting a 22-year-old to feel any loyalty to the first firm she works at is, well, as goofy as it sounds; the best a law firm can hope for is gratitude for good training and perhaps a bridge unburned a decade or so later in the lawyer’s career. But partner loyalty… that’s a biggie in this fluid market. Granted, the market isn’t quite as mobile as it was five or even three years ago, when keeping track of whether Beth and Mike were at Borden this, Milner that or McCarthy Tetrault (at least McT wasn’t changing its name every other month) was a full-time job, and betting on when Rick would move–and where–the favourite past-time of the profession (of course, with John Black about to enter the races, we may see a new spike in firm hopping…). Still, law firms know many of their partners will leave, some with their blessing… most with a book of business that until their departure formed a part of the firm’s wealth.

So what to do? “Increasing” partner loyalty, frankly, doesn’t seem to be an option, because, as the firms get larger, increasing the loyalty of one or two partners often comes at the expense of alienating one or two dozen. All the tools business uses to snap golden handcuffs on its top performers–profit sharing in its various guises key among them–obviously don’t apply to the profession (and there is some question whether they work for business in the new disloyal business paradigm). Attempts to mitigate against partner mobility by trying to turn Bob’s clients into the firm’s clients are frustrated by clients’ increased commitment to protecting their own self-interest… and Bob’s own unwavering commitment to making sure his clients think of him first. Firm-first behaviour? Not when the firm is clearly plotting against me, thank you.

What firms need to do is tap into that core of disloyalty, which really is loyalty to self, and make it work for firm. My vision: a herd of selfish partners selfishly working together for selfish goals that kinda’ coincide.
Oh wait. Isn’t that how law firms work already? Loyalty’s dead? Long live loyalty.

Marzena Czarnecka is very loyal. To, inter alia, self. And yes, those two words are all the Latin she knows.

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