Monday, October 16, 2006

Social Stability in Law Firms

The COO at my firm has a theory about firm size (number of attorneys) and their ability to grow. He surmises (and has witnessed) that firms have great growth momentum between inescapable plateaus of change. The first plateau is at 50 attorneys, then at 100, and then at 150. As I do agree with his theory I can't help but want to dig a bit deeper.

In my view, at each plateau the firm has to make it through a change in the social and operational order of things. In research it's been shown (Dunbar's Rule of 150) there is a cognitive limit to the number of stable relationships an individual can maintain. Once someone is outside (your) realm of a maintained relationships that person ceases to be relevant to you (see David Wong's Monkeysphere).

The same is true of operational process. The more moving parts there are the greater the need for order. But what administrative methods and practices work for a 50 attorney firm will certainly be inadequate at 150.

Going back to the Dunbar rule something else needs to be considered. In any firm, one attorney does not exist among only other attorneys in a firm. The firm also has staff (typically close the number of attorneys), clients, external peers, family and friends. All relationships contribute to the 150 people numbered in the Dunbar 150.

Now the plateau's are making sense. At 50 attorneys (plus 30-50 staff, plus 5-30 family, plus 50 professional and social relationships) an individual attorney is pretty tapped out for adding new people in their circle. In order for a firm to get beyond 50 they need to find a way to reorder their social structure to be inclusive of new relationships (attorneys, clients, staff, etc.) while remaining inside each attorneys capacity for stable inter-personal relationships.

Firms that adapt usually start creating highly defined specialty groups, divide leadership and responsibilities. At the 50 and 100 attorney firms this means that someone or a group of leaders may have to learn to let go of daily involvement in everything. A tough change to navigate!

As the firm gets even larger leadership will have to develop faith in the judgement of others about concerning people he/she does not know. This is when firm retreats, leadership circles, and internal news reporting becomes extremely vital.

As you grow your firm keep in mind how important the social structure of the firm is to your success. Remember that you will not be able to stop the change from happening (unless you determine to halt the growth of your firm), but you can work to adapt your firm to what is inevitable.