If you want to build a diverse and profitable law firm: Part I
by Rachelle J. Canter, Ph.D.

This article focuses on how to build a diverse and profitable law firm, one which is financially healthy and which benefits from the (1) expanded pool of talent and different perspectives, (2) increased caliber and richness of a firm's resources and services, and (3) increasingly heterogeneous workforce and client base that diversity provides.

The Importance of Professional Development

Profitability has been the primary measure of success in law firms.  Firms have concentrated on operating efficiencies and business development strategies to pare costs and increase revenues.  These efforts are consistent with a culture driven by the bottom line.

Professional development represents a largely untapped strategy for achieving profitability. The law firm culture generally does not place a high value on training or development, except for programs to enhance legal knowledge and technical skills, both of which have clear links to the bottom line.  Firms assume that good lawyers pick up non-technical skills on their own and that firms should not have to spend money to train them.

Law  firms cannot afford not to evaluate, coach, and develop their professionals.  The highly competitive legal marketplace demands top performance, yet many lawyers under-perform.  Simply weeding out all but the top performers is costly:  the lost investment in recruitment and training and the loss of clients, are only some of the enormous but largely unrecognized costs of turnover.

In addition, an estimated  30-50 percent  of high potential employees do not reach their potential.  They generally derail not because of a lack of technical skills, intelligence, or track record  but  rather because weaknesses are ignored until they cause real trouble. For example, some attorneys who became partners 20 or 30 years ago have become casualties of recessionary times in law firms because they never learned how to develop business when it became necessary for survival.

Poor relationships with others are another cause of derailment.  The technical expertise of a brilliant attorney may prompt a firm to overlook interpersonal deficiencies, such as a tendency to humiliate others publicly for their lack of brilliance.  Over time the cumulative impact of mistreatment of colleagues, subordinates, or clients may undermine their willingness to work with that attorney and ultimately force the attorney out of the firm. 

Finally, the findings from corporate America and research studies demonstrate convincingly that professional development activities have a significant effect on  performance, productivity, and profitability.

Professional Development, Profitability, and Diversity

Professional development is an important vehicle for building a profitable law firm, as well as one that is diverse.  Fostering technical, business development, interpersonal, and managerial skills in all attorneys maximizes firm, as well as individual, performance. It may also spell the difference between success and failure for women and minorities who are more likely to be judged by harsher standards, and have fewer role models and less access to career opportunities and feedback.

Top performance is the key to profitability.  When associates are trained in how to develop business, they are more confident, motivated, and willing to market the firm's services.  When partners are coached in how to manage associates, support staff, and clients, they are more effective in motivating, delivering quality service, and addressing performance problems.  When attorneys receive performance feedback from bosses, peers, and subordinates, they understand in specific, data-based terms, where their performance needs improvement. 

Which brings us to the second objective -- diversity.  In a national study of 16 organizations recognized for their diversity efforts, the Center for Creative Leadership (CCL) found that organizations frequently recruit diverse populations but do not develop and retain them. 

Recruitment alone is not sufficient:  development is the "missing link" in many diversity efforts.  The return on an investment in diversity will only be realized if the firm makes a concerted effort to develop diverse employees once they have been hired.

This article originally appeared in the Summer 1997 issue of AILTO Insider (Volume 11, Issue 1), a publication of The American Institute for Law Training within the Office, a project of the ALI-ABA Committee on Continuing Professional Education in cooperation with the ABA Standing Committee on Continuing Education for the Bar. Copyright © 1997 American Institute for Law Training within the Office.  All rights reserved.  This information of any portion thereof may not be copied or disseminated in any form or by any means or downloaded or stored in an electronic database or retrieval system without the express written consent of the American Institute for Law Training within the Office.