There are some rather eye-opening figures on a poll conducted by AdamSmithEsq about the perceived ability of US firms to ‘cross serve’ current clients. Given that one of the key justifications for having larger law firms is that, through economies of scope / deeper specialisation, they can better meet the needs of the clients. It’s quite an important issue to be grappling with: if economies of scope do not exist a big reason for large law firms disappears.
The thing that really caught my attention was the difference between large firms (>500) and smaller firms (<100). Of those surveyed,only 73% of lawyers in large firms agreed they had the capacity to cross service clients – 93% agreed in smaller firms. 73% of lawyers in large firms agree that management supports collaborative efforts.whereas the figure is (again) 93%) in smaller firms
One potential explanation of these findings is that those in large law firms were less likely to feel they understood how the capabilities of other lawyers in their firms intersected the needs of their clients. Only 41% of lawyers agreed their was good coordination between practice areas within their firm (the figures were even worse for coordination between offices).
The figures on trust are worth quoting:
Perhaps most damning is what appears to be a significant lack of trust within law firms; you’ll note that none of these are even passing grades.
% Strong agree/agree High degree of trust between lawyers at my firm I’m confident others will serve clients as well as I do All lawyers 41 49 Management 67 68 Business professionals 48 30 >500 lawyer firms 42 42 <100 lawyer firms 47 46
I’m hoping (hoping) that this is more of an indication of a lack of familiarity with others at the firm; if there truly is a lack of trust and disbelief that others will serve clients as well as they will – then cross-serving/collaboration exhortations and programs are pretty much toast and we should just go home.
Here we see less no difference between lawyers in different sized firms but the (actually quite common finding) that management and the workers have considerably different views of their own firms. We do however see that only 21% of those working in big firms agree that incentives to pursue cross-serving (selling?) are “commensurate with the effort required”. In smaller firms the figure is 53%.
The findings might be explained by another post I stumbled across recently about the problems of scale. This quote gives us a flavour, but it is worth reading for the elephant and mouse analogue.
The reason communism or utopianism can work at small scale is because of the tight knit nature of a small group. Think of your family dinner table: Do you need to trade chits to decide who gets to eat how much, or do you need some grand overseer to dole out the potatoes? No. You all simply take what you need for the meal, and make sure everyone has enough. Think of the shameful admonitions if you over-eat and leave another family member hungry.
The problem is when concepts don’t scale. People do take too much. Trades within firms become metrics and metrics promote selfishness and mistrust. The idea, in essence – transferred to here – is that, economies of scope do not scale in knowledge intensive, relational businesses or perhaps as AdamSmithEsq suggest do not scale without better management initiatives to make them scale. Big law may be built on reputations, the hype if you like, but their size corrodes the trust and knowledge that it is necessary to share for the hype to be believed – internally at least. Clients will be wondering, if they don’t trust themselves, why should we trust them?