Law Review: Study: How Duane Morris keeps its collegial culture

Posted: November 18, 2013

In the turbulent and sharply competitive world of Big Law, it is one of the most bemoaned trends of the last generation.

Establishment law firms that once functioned like local monopolies, where partners stayed forever and clients did, too, have evolved into ruthlessly competitive legal-services machines, in many instances spanning the globe.

At some big firms, work is hoarded, colleagues actively undermined, and lawyers jump ship for competitors offering hefty salary bumps.

Being partner, once the equivalent of university tenure, is no longer an ironclad job guarantee.

Yet, according to a Harvard Business School case study, the Center City firm Duane Morris L.L.P. has somehow managed to bar the barbarians from the gate.

Or to at least show them the door if they manage, undetected, to slip through.

Harvard professor Heidi K. Gardner spent five months, beginning in December 2012, visiting with Duane Morris lawyers in the firm's headquarters here, as well as other U.S. offices and its office in London. She had wide access to the firm's financials and spoke at length with lawyers up and down the organizational chain.

Her takeaway was that the firm, through a combination of data management, analytics, and a flattened, more democratic organizational structure, had managed to preserve some of the profession's older and more traditional values.

While the thrust at many big firms is toward chargeable hours and claiming credit for work done, Gardner and associate Annelena Lobb concluded that Duane Morris had taken a more holistic approach.

Productivity is emphasized, to be sure. But the firm also compensates lawyers for stepping up to work on matters brought in by others.

Gardner says the firm uses sophisticated metrics to gauge profitability for not only lawyers but also for the matters they work on.

The firm can calculate the hourly cost, including expenses, for each of its lawyers. That cost is measured against revenue attributed to specific engagements. In this way, the firm can then easily determine whether lawyers, and their areas of activity, are profitable.

The case study also concluded: Lawyers are encouraged to share work with colleagues, when appropriate, and an atmosphere of respect is fostered throughout the firm. There is a "no jerks" rule at Duane Morris and a zero-tolerance policy for any partner who hoards work aggressively and challenges consensus.

Firms frequently claim that they have unique cultures and that collegiality reigns. This, of course, is hard to verify. What gives the Harvard study unusual credibility is that Gardner is a specialist in teamwork and collaboration, and she has conducted similar studies at other law firms. The approach at Duane Morris, while not unique, is nonetheless rare, she said.

The firm's measured-growth approach - it grew to 700 lawyers in 2012 from about 200 in 1997 through small, so-called liftouts from other firms and other incremental hires - helped preserve firm culture and permitted Duane Morris to be selective regarding new hires.

John J. Soroko, chairman of Duane Morris, said the firm's reputation has helped with recruiting.

"We hear repeatedly from laterals [recruits] about how different it is from their old firm," Soroko said.

The lawyers at the firm seemed to have spoken openly to Gardner about its internal operations, offering insights into how legal talent, which comes in all shapes and sizes, is deployed.

One partner, describing how he sought recommendations on whom to assign to an important Food and Drug Administration matter, said he was told by a firm leader:

"Here are three people and here is what [you] need to know about them. This person presents really well in front of clients, but doesn't roll up his or her sleeves and get into the details as much as others. This person is unbelievably bright, sharp, and hardworking, but awkward socially. And this person is probably not the right choice if the deal is going to require weekends and holidays."

The Harvard study is also notable for what it discloses about compensation issues at big firms and how they are hashed out.

The study includes the remarks of an unnamed partner, using an apparently hypothetical example, about the difficulties of having to tell another partner that his or her $800,000 annual salary would have to be reduced $50,000 because the previous year's chargeables were off.

"There are some personalities, when it comes to advising them of a downward adjustment in their compensation, where you simply have to be as direct as possible," the partner is quoted as saying. "I might say, for example, 'Hey, you were at a number close to $800,000 last year, and frankly, this year your results were a bit off.

" 'We are in a situation where we need to spread some of this money out to other folks that are on an upswing. I'm going to have to ask you to take a $50,000 reduction, and here's why.' "

We should all have such problems.

215-854-5957 @cmondics

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