Reference no: EM132810239
The case below is 'the case' with respect to the individual analysis.
You are a management consultant appointed by a local law firm that is having trouble expanding into lucrative markets in the mining industry. Tormund and Associates have been operating for nearly two years and have a staff of over 300. Like many law firms its structure is largely defined by industry practice in which partners jealously oversee client portfolios in a largely segmented fashion. Clients deal directly with a solicitor they have known for some time and solicitors earn promotion and bonuses through bringing in new clients and demonstrating their value to the firm in the billable hours (hours charged to clients) they accumulate. Partners and senior solicitors will often have many junior solicitors and legal clerks (Articled Clerk) under their supervision and earn by charging rates over and above the cost of these junior staff to the firm. While an articled clerk may be billed out to clients at over $100 per hour, these staff generally receive half that amount. While that isn't unusual, some contend these staff are often exploited by the partner they answer to.
While an articled clerk may often work over 70 hours a week, many complain that they have trouble reaching their quota of 40 billable hours per week as they do not get credit for all hours worked from senior staff. Some even complain that senior staff often take credit for their work and charge this out at far more expensive rates. Additionally, senior partners seem aloof and unconcerned about the tremendous pressure for results or the difficulties experienced by junior staff. Many senior staff are the prime culprits in perpetuating these problems in the belief this tough initiation is part of the industry wide "individual high achievement" ethos. One that is summed up well with these words from one partner "I never got an easy ride on my way to the top; it was hard work and perseverance that got me to where I am. Those that make it have the tough mindset that this firm needs to survive - it's just how it works and what we are left with in the end is the cream."
Yet Tormund and Associates is experiencing many problems in growing its business and achieving greater depth in their service offerings. It was clear that many mining clients' required legal specialists with industry knowledge as litigation was an increasingly complex area in which involvement of a legal experts needed to be of a much higher order. Lawyers were now engaged so frequently in the course of doing business that many firms were opting for their own legal function in order to keep commissioned legal practitioners honest. As one partner so aptly put it, "As many of our clients have grown and we accumulate more large firms as clients, we are finding they often have their own legal people that are quick to pick up on where we fail. Our clients are far more sophisticated these days and some of the old practices are causing a crisis in client satisfaction."
Consequently, Tormund and Associates better junior staff are often poached by their clients. As soon as junior staff accumulated enough industry relevant, firm specific experience, they were often head hunted for more secure and attractive roles in these large corporations to assist in contracting, negotiation and risk assessment activities. As a result, Tormund and Associates corporate law revenues have remained stagnant or slowly shrinking for some time while other markets have continued to steadily grow. It is clear that unless the firm accumulates the expertise and reputation needed to win this lucrative corporate business, they will lose out in a race to establish themselves early.
The firm recently attracted an experienced mining industry legal specialist Leonard Giant to improve the calibre and scope of service offerings to its large mining corporate clients. However, while this specialist has a small team and a starting appointment at senior solicitor level (a relatively high level for a new appointment), he has complained that many senior staff seem unprepared to put their clients through to him. As a result this critical knowledge is not engaged in solving complex problems that need a legal expert with some industry savvy. While many of his colleagues had the mining clients, none were prepared to include him in discussions. Giant was now openly talking of leaving as it was clear his own performance targets for billable hours could not be met while this situation persisted. Recently Giant was even told by one partner, "Like the rest of us had to do here, you will need to manage by yourself and earn your own way. You're not riding on my coat-tails. I had to earn these clients the hard way; by myself."
Giant replied, "What do you want me to do, poach your clients?"
One day Leonard Giant angrily said to you "I have worked in the mining sector for over 10 years doing deals many times larger than any these pompous clowns have had a hand in. Every time I show them how a client should have been served better they still don't refer legal matters requiring my expertise. They try to do it themselves and they blow it simply because they know my expertise costs money - money they would rather keep for themselves. I have even been accused of trying to poach clients when all I am trying to do is what the firm has asked of me - fix our service quality problems in the industry." Indeed, while senior partners have commissioned you to assess the problem from a management perspective, it is clear to you that change is needed and that this change may be unpopular with many. Giant and some of his team look stressed in the extreme, complaining of the long hours needed to promote their worth in the firm but, how little they seem to get in return.
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