The future of Biglaw may hinge on culture

November 3, 2016

I recently spent a week in our London office. It’s hard to believe it’s been two years since we announced our international merger. The similarity in work ethic, temperament and approach to client service between our US and UK staff always stands out to me, and has been a tremendous factor in how well our integration process has gone. But it gets me thinking, too, about the subtle complexity of any merger. In an era when international law firm mergers are a seemingly daily occurrence, it’s hard to fathom how many pieces they’re trying to fit together.

Culture matters. This is the thought that rolls around in my head every time I read about yet another megafirm merger. A law firm’s culture is a real differentiator, and there are two camps: those firms with a clearly defined culture, and those firms whose culture is to have no culture. What’s striking is how resolute the two camps are about the power of their model. Is it possible they can both be right? Sure. Is it likely that one model is inferior and more prone to implosion? Absolutely.

Law firms are, on a good day, a delicate strand of pearls. Without non-competes to bind them to their organization, lawyers are able to move freely from one firm to another with their portable books of business. In times of trouble at a firm–a drop in profits, an unappealing merger, a scandal, the loss of a large group–it’s nearly impossible to ignore the allure of packing up for greener grass on the other side, particularly when recruiters are pounding at the door and the lawyers down the hall are leaving in droves. What is the one thing that can keep a firm together in difficult times? A strong culture, one that emphasizes that the whole is greater than the sum of its parts.

Culture matters to clients, too. An integrated model means law firm partners in New York will confidently refer business to their colleagues in, say, Moscow, because they likely know something about the partners and the quality of their work. Firms that emphasize culture and the ability to integrate lateral hires, recognize that there are tangible benefits to applying a small-firm vibe to a global firm.

In contrast, the most spectacularly failed merger in recent memory–Dewey & LeBoeuf–essentially began with the creation of an internal class system that rewarded select partners with lucrative side deals that became albatrosses to the firm. When the firm’s survival depended, in part, on certain partners amending the terms of their guaranteed deals, they allegedly refused, and it wasn’t long before the dominos began to fall with breathtaking speed. Could a stronger culture have saved Dewey? It’s impossible to know for sure, but it is fair to assume that many of the underlying elements leading to Dewey’s demise–outsized incentives that created a star culture, the inability to fully integrate Dewey Ballantine and LeBoeuf Lamb, a complete lack of transparency–would not have existed in a firm that valued culture over growth for the sake of growth.

The challenges of effective law firm cultural integration play out in the context of a rapidly evolving market. The pressures facing Am Law 100 firms in 2016 vs. 2006 are akin to the pressures on a college student vs. a third grader. Indeed, many of the new global megafirms, whose size and scale are the differentiators, were created as a strategic response to a post-recession world. The question is: Are these firms built to withstand the inevitable storms all law firms face, or will they crater under their own weight? Certainly, some will fail while others thrive, and I would not be surprised if culture was a deciding factor.  

Jamie Diaferia is CEO of Infinite Global