Mark Herrmann

Inside Straight: Why Are There No Law Firm Divestitures?

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Merge; merge; merge. It’s all we hear about from law firms these days.

But corporations do these things in both directions: Corporations do acquisitions, but they also do divestitures. Corporations merge, but they also de-merge.

If it occasionally makes sense for a corporation to divest itself of a business unit, or to split itself in two, then it surely also makes sense for law firms occasionally to divest themselves of practice groups or split themselves in two. But we almost never hear about those things. (A reader of this column tells me that he googled “law firm” and “de-merger” and found only this five-year-old announcement about a firm in the UK.) (Don’t complain about my shoddy research. That’s more spadework than goes into a typical one of these columns.)

So here’s the idea: You have a global mega-firm that combines a fine M&A practice with a great litigation practice. Just as corporations sometimes think that combined business units would have more value if pulled apart, the law firm decides that everyone would prosper if the litigation firm were spun off from the transactional practice.

Divestiture! It’s not a dirty word in the corporate world; why is it never spoken among law firms?

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Inside Straight: Aging Out

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Here’s a sad tale that I’ve heard repeatedly recently from senior partners at major law firms.

When these partners were associates, they were superstars. They did great work, were in high demand, and sailed through the ranks.

These folks were invited into the partnership along with (or even before) their peers.

As junior partners, these folks remained superstars. Senior partners were anxious to delegate responsibility to these people, and the then-junior partners were flattered to be asked. The junior partners were doing interesting work, being paid handsomely (if not royally) for their efforts, and were contentedly busy.

But a funny thing happened on the way to retirement. My correspondents became senior partners, and this crippled them (professionally). They had aged out of utility to their firms. . . .

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Inside Straight: Do Clients Insist On One-Stop Shopping?

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I was recently asked to write an article about the future of Biglaw. (That’s one of the benefits of writing this column: Writing yields more opportunities to write. Like first prize at the pie-eating contest.)

I naturally asked some Biglaw acquaintances what they saw in their firms’ futures, in an effort to generate some grist for the article’s mill. (Given that I occasionally write in unbelievably awkward, and arguably unintelligible, mixed metaphors — such as “grist for the article’s mill” — it’s a wonder that Lat even permits me to continue writing this column, let alone that others solicit me to write in other fora. But that’s neither here nor there.)

What do my Biglaw lunch dates (and others whom I pester) say about their futures? They say many things, but one common refrain about the future of Biglaw is “consolidation. Big law firms will continue to merge, and only the biggest will thrive.” When I ask why firms will feel compelled to grow, folks often say: “Clients insist on it. Clients want one-stop shopping.”

What clients? Any real ones, or just theoretical ones? I, at least, don’t insist on one-stop shopping. . . .

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Inside Straight: How To Drive Outside Counsel Nuts!

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How to drive partners nuts. How to drive associates nuts. How to drive your boss nuts. How to drive clients nuts.

What’s left? Today’s topic: How to drive outside counsel nuts.

I’d say that I’ve been thinking long and hard about this subject to permit me to draft this column, but that wouldn’t be true. I’m a natural at this!

How do you drive outside counsel nuts?

First: Insist that outside counsel prepare a budget for every matter. Then complain that the budget is too high; tell counsel to reduce it. Complain that your business will never accept even the revised budget, and tell counsel to cut the estimate further. When you get the second revision, gin up some reason why even that’s too high, and have counsel cut the budget again.

Six months later, when counsel has blown through the budget, refuse to pay the bill! “You told me you could handle this case for damn near nothing. And now you want all this money? This is far more than what you budgeted. There’s no way we’re paying this!”

See? I told you that I was a natural. And I’m just getting warmed up . . . .

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Inside Straight: Turning Lawyers Into Liars

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The average person is relatively honest. Why do we create rules that force otherwise honest people to lie?

We do this to many people. Think first about physicians.

For some reason, New Mom and Baby should spend one extra night at the hospital. Mom and Baby are doing fine, but the doctor sees a reason for one more night of rest. What does Doc do?

The insurance company won’t pay for, and Mom can’t afford, an extra night at the hospital, so Doc lies: He falsely notes that Baby is “jaundiced,” which justifies the necessary night at the hospital. The rules have turned Doc into a liar.

I’m sure that’s just the start of what the insurance bureaucracy does to turn honest physicians into routine liars. But I’m thinking today of rules that turn perfectly honest lawyers into liars. Once you start thinking about it, you’ll come up with endless examples . . .

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Inside Straight: How To Drive Clients Nuts!

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Fair is fair is fair is fair: First, I analyzed what drives partners nuts. Next, I revealed what drives associates nuts. Third, I suggested how secretaries could drive their bosses nuts. Which (unless my imagination improves) leaves only today’s column: How to drive clients nuts!

How can you drive clients nuts? Let me count the ways.

First, remember that it’s really not the client’s case; it’s yours! The client retained you. You’re tending to the thing. If you win, you’re going to link to the decision from your on-line firm bio. So take the case and run with it!

When journalists call, answer their questions. (Make sure they spell your name, and your firm’s name, correctly in the published piece. Free publicity can’t hurt.) That silly little client surely trusts you to handle the press properly and, if the client doesn’t, the client’s wrong.

In fact, don’t limit yourself to handling the press. Figure out what an appropriate settlement should be, and then move the process along on your own. Call opposing counsel and tell her that you haven’t yet run this idea past your client, but you think the case should settle for 500 grand. Tell her you’ll recommend that amount if she’ll recommend that amount, and see what happens. The client will be pleased that you evaluated the case and sped the process without bothering the client at all. That’s both convenient and cost-effective: You’ll be a hero! (It’s quite unlikely the client was thinking more broadly than you are, considering the effect of settling this case on business issues, or other cases, or the like. After all, it’s your case. Don’t be a weenie; you handle it!)

Great! We’ve pushed the client one step closer to the brink of insanity. What else can we do to nudge the client over the edge?

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Inside Straight: Are Law Firms Unnaturally Mean?

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Law firms are not unique.

There are many professional services firms in the world, and there’s no reason to think that corporations would naturally be nicer than law firms.

But I’ve recently heard words spoken by in-house lawyers that I swear you would never have heard at a firm.

Get a load of this one: “The document that Galt distributed had many typographical and other errors. I believe Galt needs some coaching on document presentation.”

“Coaching on document presentation”???

I never heard the concept expressed quite so pleasantly during my decades at law firms.

And that’s just one of many times corporate life has recently seemed nicer than law firm life . . .

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Inside Straight: How To Drive Your Boss Nuts!

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Fair is fair is fair: Two weeks ago, I wrote about how to drive partners nuts. Last week, I wrote about how to drive associates nuts. Today, I’m continuing along the lawyers’ food chain: Secretaries (or “administrative assistants”) — it’s your turn: How can you drive your boss nuts? [FN1]

First: Your time after work is yours, to tend to your family, watch TV, go clubbing, or whatever. So you have to handle all of the other stuff — like making appointments, chatting with out-of-town friends, shopping, and the like — during work hours. Happily, the telephone and computer at your desk are all the equipment you need. So do all your shopping on-line during business hours. Talk to your friends, post stuff at Facebook, and surf the web from your office desk.

That does three things for you. It gives you more free time at home, to spend as you like. It helps to pass the time during work hours. And — best of all! — it’ll drive your boss nuts! Every time your boss walks up to give you a project, just click away from Amazon.com and whisper “gotta go” into your receiver. Your boss may not notice and, if he does, you’ve just pushed him one step closer to the edge, which is, after all, the name of this game. Use your time at work intelligently; use it to handle all of your personal affairs.

Don’t just fritter away your eight hours a day at the office. Also, nibble around the edges. Leave the office at 4:55 without telling your boss. Maybe she won’t notice, and she’ll surely never come frantically looking for you seconds after you’ve left. Sticking your head in the door and saying good night would just tip her off that you’re cutting out early; don’t do it!

Also, remember that Mondays and Fridays during June, July, and August are meant to be taken as sick days. If you take them regularly, your boss will get used to this, and he’ll become more efficient, doing all of his work between Tuesday and Thursday. He’ll probably thank you for this.

How else can you drive your boss nuts?

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Inside Straight: Must You Specialize To Market Yourself?

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Releasing a book may not bring you fame or fortune, but it surely brings you interesting e-mails. I devoted last Thursday’s column to an e-mail I received from a reader of the Inside Straight book asking whether law firms undervalue good lawyering. I’m devoting this column to an e-mailed reaction posing a different question: Must a lawyer specialize if he or she hopes to develop business effectively?

My correspondent (who again is a partner at an Am Law 100 firm and again gave me permission to edit and reproduce his or her words anonymously) wrote: “Your case study of how you developed a pharmaceutical product liability practice (when you worked at a big firm) says as much by implication as it does expressly. You’re implicitly asserting that one develops business more effectively by showing that you’re a specialist in a field the client needs rather than saying that you have a fungible skill. But I suspect that your true value as a lawyer was largely unrelated to your business development pitch in which you pretended that you were a specialist.

“Ultimately, what you brought to the table in private practice wasn’t a nearly 30-year career in pharmaceutical products law. You brought a vast wealth of experience gleaned from cases that had nothing to do with the area of law that, at a particular time, happened to govern specific cases.

“It pains me that lawyers feel compelled to become specialists — or, at a minimum, to pretend that they’re specialists — if they want to develop business . . . . ”

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Inside Straight: How To Drive Associates Nuts!

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Fair is fair: I wrote last week about “what drives partners nuts.” Having armed associates with the ammunition needed to drive partners crazy, it’s only right that I arm partners with ways to drive associates nuts. (I realize that many partners are quite good at this even without my help, but I figure a stray few could use some guidance.)

Come on, partners, how can you drive associates nuts?

First: Give associates disembodied projects!

If you wanted someone actually to be interested in a project, you’d tell that person what the project was about. You’d explain what the transaction entails, what the client needs, and the critical issues likely to arise. In litigation matters, you’d explain who’s suing whom for what, the path the case is taking, the client’s main concerns, and the likely endgame. That would put a person’s brain in gear, and the person might actually care about his or her work.

So don’t do it!

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