The one firm firm what makes it successful

Focusing on young hires has the added virtue of creating a nimble, energetic army of people who are generally more willing to embrace the core teamwork culture and core values than are older lateral hires. Many warlord firms have reduced or eliminated entry-level recruiting, purportedly because of the short-term cost of hiring and training such people. They prefer to hire laterally from other firms, to avoid the costs of investing in junior people.

We believe these firms are sending two uncongenial messages: the people we hire are fungible, and there is nothing special about us. As a result, they are not developing sufficient loyalty and glue to survive the coming down periods, much less to take them to the upper reaches of their respective industry or profession.

One of the keys to the one-firm firm model has been the vigorous enforcement of high standards for progression within the firm. This means that a relatively small percentage of those hired are actually promoted through the ranks. For that reason, one-firm firms may not have different nominal turnover rates than other firms. However, one of the hallmarks of the model is that people who leave one-firm firms do so with great pride and loyalty, often becoming a source of business referrals for the firm.

Turnover among junior and even senior people has become a fact of life in all professions. In the s, Latham learned that it made all the difference in the world whether people left feeling, on the one hand, neglected or badly treated or, on the other hand, as proud advocates of the firm. Up to that point in time, Latham had ferociously concentrated on hiring, training, indoctrinating, and holding on to talent.

In that environment, when a lawyer left the firm to do something else, it was regarded as a failure rather than an opportunity. As a result, the firm often treated the departing lawyer neglectfully or even badly, as if he or she was a defector. This is an example of a one-firm firm principle run wild. In retrospect, the firm lost millions of dollars in potential business because it mismanaged relationships with those who left.

As Latham matured as an organization, it changed its practices to honor people who leave the firm and to cultivate their friendship. In the mids, Latham made a calculation about how much of then current business came directly or indirectly from alums.

The figure was approaching 50 percent. And it was great business — name-brand clients, often premium rates, quicker bill collection, pleasant dealings, and so on. Moreover, the clients benefited because the alums had a special feel for the firm, including knowledge of strengths and weaknesses. At all of the one-firm firms, the loyalty of alumni is a key competitive weapon.

Prior to the s, firms entered new markets cautiously by redeploying existing talent. But affairs and clients began to move quickly and markets have shifted much more rapidly in the years since then. Accordingly, most of the one-firm firms have expanded their use of lateral experienced senior hires. To wait for inside talent to develop was to risk missing the boat.

In addition, firms in every profession started to open offices in new geographic markets. Early attempts to staff new offices solely with partners from existing offices were unsuccessful. As a result, expanding firms began to cherry-pick talented experienced people from outside the firm. Most firms moved cautiously, bringing in only individuals and small groups and avoiding large-scale mergers. The key has been to make sure that when new laterals join the firm, they know what they are buying into.

The lateral must understand that he or she is joining a firm with an established ideology. Surprisingly to many outsiders, one-firm firms have found that many laterals come to the firm to benefit from good management; that is, to be managed. Often — not always — they are the most fervent supporters of teamwork, management, and cohesive action in their new organization. Lateral hiring, now a competitive necessity, remains a double-edged sword for a one-firm firm.

Done well, laterals can bring a new air of dynamism and creativity to a firm. On the other hand, lateral hiring is management-intensive. The bottom line is that a disciplined lateral program, anathema not very long ago, can strengthen a one-firm firm. A poorly managed program will tend to pull the firm apart.

The one-firm firms have largely avoided the stampede toward individual-based or profit-center-based reward schemes. However, since most one-firm firms have gradually expanded the individual component of their reward scheme in fact if not in rhetoric and have increased the total compensation ratio between the highest-paid members and the lowest-paid members.

At Latham, until the long-term compensation element known as units was essentially lockstep, with seniority as the main driver. Under cover of the early s recession, this system was changed. Since that change, the percentage of Latham partners hustling and producing business of substance has dramatically grown.

Most one-firm firms run judgment-based compensation schemes with a studied avoidance of formulas. As always, the key to successful functioning of the system is agreement on values and ideology. There are many reasons why institutional trust and loyalty are important in a professional business, but three are worth stressing immediately. First, clients of a one-firm firms have, as a practical matter, access to all the resources of the firm.

Individual members, rewarded through the overall success of the enterprise, are more comfortable bringing in other parts of the firm to both win and serve clients with complex multidisciplinary or multi-jurisdictional matters.

Clients are generally better served than they would be by a firm of solos or silos. Clients respond positively when individual members support and, especially, do not undermine their colleagues.

One-firm firms are good at relationships, internally and externally. In firms that emphasize the use of credit and compensation systems to motivate and placate individual members, client service across disciplines and geography will often suffer. Sophisticated clients may cherry-pick great individual professionals or small practice teams from such firms but will rarely depend on them for complex work across boundaries.

Warlord firms tend to excel at transactions, not relationships across boundaries. Second, as we have seen, the stewardship approach that one-firm firms take toward their recruits selectivity, training, high standards , when done well, can lead to great alumni loyalty.

One-firm firms do not necessarily have lower levels of turnover, but former employees often leave as loyal advocates of the firm, based on the way they were treated when they were there. Employees of warlord firms do not always feel this way.

This can have a significant impact on future revenues. Third, trust and loyalty give a professional service firm a better chance of surviving market downturns. The test of a firm is not how it does in good times, but rather how it responds to roadblocks, stumbles, and problems, minor and major.

On such inevitable occasions, members of a loyalty-based firm will pull together, and they will take pride and pleasure in doing so. In professional businesses with a free-agent climate, seemingly successful firms can disintegrate and have disintegrated almost overnight. The values in one-firm firms can be delicate.

In good times, partners may become intolerant when top management fails to lower its standards to hire enough people to handle new business. Partners may also favor getting the work done over training. Firms must diligently maintain their principles to avoid short-term gains at the expense of the long term.

Rainmakers are intolerant of one-firm firm values. Their obsession with new clients is an antidote for their feelings of insecurity. They feel they should be compensated commensurately with rainmakers in warlord firms. Our mission is to provide essential resources for being a great partner and a great firm. All Rights Reserved. Use by any person other than the addressee is prohibited. Member Resources. Articles for CPAs. In contrast, McKinsey expect each office to put the overall organisation's best interest before that of the office itself — a principle that is not compatible with warlord firms.

Change Management Principles John Kotter, the illustrious author, has created one elegant model for change management that fits well within the context of psychiatry Kotter He created a defined eight-step process that fits well into our model for change.

The subsequent italicized words are from his model; they are followed Big Book of Emergency Department Psychiatry Integrated Watershed Management Principles, Institutions, and Practices IWM is the process of coordinating the conservation, management, and development of water, land, and related natural resources across sectors e. As we have already discovered and as we will carry on doing throughout this book, the water heritage of indigenous It was always the determination of the builders and makers of the products to ensure that their products Quality Management in Oil and Gas Projects Safety management principles and organization tasks for product safety Over the years, professionals working in the safety area have developed many safety management principles.

As a microcosm of management, project management focuses on the application of these It is clearly apparent who is in charge of coordinating activities across the firm. It is therefore a high-risk Effective Client Management in Professional Services Change of Activities and in Organization and Management in the Chinese Securities Firms From an objective point of view, institutional change over more than 20 years after has resulted in profound changeover in the system structure of the Chinese securities firms.

A system has taken shape that consists of market-oriented financial institutions offering securities services. And there