According to many law firm leaders, having a good law firm culture is a key to sustainability. Not infrequently leaders attribute their firm’s culture for the success enjoyed. When new mergers are announced or reviewed, the importance of compatible cultures gets top recognition. And when law firms fail, the impact of a dysfunctional culture reaps its share of the blame. So, the importance of culture is consistently acknowledged. But what makes a law firm’s culture “good?”
A “good” culture can be difficult to define. Like Justice Potter Stewart’s “I know when I see it” test of one observable fact, law firm culture means different things to different people.
A firm with a good culture need not subscribe to a particular business philosophy. Indeed, firms with good cultures fall across a broad spectrum of business fundamentals and strategies. For example, despite thoughts by some to the contrary, an “eat what you kill” firm can have good culture. Conversely, a “share and share-alike” firm can have a challenging one.
Even with this seeming lack of clarity, because the quality of a firm’s culture matters to its well-being, periodically assessing it is an excellent practice that all firms should adopt. And as 2020 begins, there is no better time to give it the attention it deserves by performing a culture audit.
A culture audit assesses a firm’s performance in five non-financial areas. Although non-financial in focus, an audit identifies cultural disconnects that can be addressed before they fester and impact a firm’s stability.
A firm performing a culture audit reviews its connectivity in the following five areas:
Aspirations. Common aspirations for the firm and its owners are extremely helpful to a firm’s culture. By “being on the same page,” owners are more likely to have similar goals and ideas about the future. For that reason, an audit starts with determining if the firm’s owners share the same ideals, objectives, and philosophies. If they do not, a firm’s culture could be out of sync. Taking steps to align aspirations can help eliminate harmful dysfunction.
Trust. Do the firm’s owners trust leadership and each other? It is easy to understand that a lack of trust can undermine culture. Using the audit to determine the level of trust within the firm is essential. If the audit uncovers questions about trust, a deeper dive into the root causes of the mistrust is necessary. Once known, the difficult challenge of restoring trust is the next but essential step.
Understanding. Is there a common understanding about the firm’s intended path to achieve widely shared goals? A firm whose tactics are understood has a better chance of a positive culture. On the other hand, if there is confusion about the firm’s plan for reaching its intended goals, the seeds for a difficult culture may have been sown. Remedying any misunderstanding about the firm’s direction is an important step to improving a firm’s culture.
Consistency. Does a firm act inconsistently towards its owners and its approach to business? A firm that acts consistently is more likely to be both trusted and understood. In contrast, a firm whose decision making is inconsistent and unpredictable can find itself struggling. Using the audit to learn the perspective of the firm’s owners respecting its consistency can provide a vitally important piece of information.
Communication. It is not surprising that most firms with positive cultures communicate well with their people. Because good communication is a “two-way street,” if done well good communication helps leadership build trust while keeping it informed about the mood of the firm. All components that impact a firm’s culture are aided by the existence of good communication. Thus, shortcomings in communication revealed by the audit signal the need for improvement so that the firm’s culture avoids undue stress.
As much as culture seems “touchy feely” and thus not worthy of focused attention in this increasingly data driven world, nothing could be further from the truth. An audit may reveal surprising information that is best known sooner rather than later. As 2020 begins, will you take the time to assess your firm’s culture?