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    November
    01
    2014

    Solutions
    Organizational Culture: Predicting a Law Firm’s Success

    Identifying and understanding the behaviors that underlie a firm’s organizational culture will help promote more effective and comfortable lawyering.

    Susan Spoerk

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    business suitsEvery law firm has a culture and an organizational culture. Culture is the set of assumptions and values that is shared by a group of people and that guides the group members’ interactions with each other.1 Organizational culture (also known as corporate culture) is the behavior of people within an organization and the meanings the people attach to their actions.2

    Behavioral norms determine the organization’s capacity to solve problems, adapt to change, and perform efficiently.3 The importance of organizational culture is that a constructive organizational culture has empirically been proven to enhance performance in organizations, whereas a defensive culture can sabotage an organization.4 This article provokes thought on law firm organizational culture and provides tools for its assessment.

    Little Academic Research on Law Firms

    There are numerous academic studies on the organizational culture of corporations, health care organizations, the military, and educational institutions but a dearth of academic research on law firms’ organizational culture (and for that matter, very little empirical research at all on law firms).5 A search in Amazon lists hundreds of books on organizational culture focused on businesses such as IBM, Apple, and Zappos. Many of these books are based on academic research conducted by noted scholars of organizational culture, such as Geert Hofstede (an academic from the Netherlands who eventually worked for IBM), Edward Schein (Massachusetts Institute of Technology), Terrence Deal (University of Southern California), and John Kotter and James Heskett (Harvard Business School).

    It was not until 2010 that a law firm was the subject of study for an article on organizational culture in an academic journal.6 The author noted, “Law firms traditionally have been loathe to provide … access,” which is why there is little empirical research on law firms.7 Legal trade journals and blogs discuss culture in law firms, yet these references are more anecdotal than empirical.

    Law Firms – The New Normal   

    The 2011 State Bar of Wisconsin Board of Governors Report titled “The New Normal: Challenges Facing the Legal Profession” lists many of the changes and challenges law firms have faced recently.8 Two major factors have shaken the legal profession: the rapid increase in technology and a downsized economy.9 Law firms have been forced to go through tremendous change since the economic downturn of 2008.10 Legal services are becoming commoditized and law firms must be creative in how they distinguish their value proposition. Buyers of legal services, particularly corporations and family businesses, are becoming more demanding in this buyer’s market.

    At the same time law firms face increased pressures to perform, technology has changed the way clients hire and interact with lawyers. These changes minimize the face-to-face relationship between lawyers and their clients. Through this last decade, law firms have been thrust into change.11 A law firm’s organizational culture can be a help or a hindrance when attorneys respond to change.12

    Culture in Law Firms

    Attorneys who practice in a law firm, especially those who have only been at one firm, might not have a point of reference to compare their firm’s culture to others. However, there is unprecedented lateral movement in law firms these days.13 When attorneys change jobs or share stories with their colleagues who move between firms, it is fairly easy to assess the culture by asking the question, “What is it like working for XYZ firm?” Answers might include the law firm was “high tech” or “a sweat shop” or “political,” “diverse,” “innovative,” “cheap,” “fun,” “collegial,” “family friendly,” or “stodgy.” A large firm might have subcultures, for example, in its practice groups or through a result of certain initiatives such as a focus on diversity.14

    Susan Spoerkcom susan.spoerk thomsonreuters Susan Spoerk, Marquette 1991, is a Westlaw account manager for Thomson Reuters. She received a master’s degree in leadership from Marquette University’s College of Professional Studies in 2011.

    An obvious indicator of law firm culture is the name on the door. Law firms are made up of individual lawyers who choose to practice law together. Law firm websites often track key historical changes, including telling the story of what inspired the original partnership. There is a difference between first-generation law firms and legacy firms when it comes to culture. In a first-generation law firm, the named partners often drive the firm’s culture. In a legacy firm, culture is often diluted, and members might fall into the pattern of “this is how we do things,” even though people have long ago forgotten why.15 What creates the firm culture initially is the belief system and values of the firm’s founders. Firm culture is not stagnant. New generational leaders in a firm can cause the value system and culture to shift. Successful organizations heavily emphasize values.16

    Importance of Organizational Culture in a Law Firm

    As law firms adapt to the “new normal,” they often turn to consultants to help with internal assessments.17 Consultants may be called on to assist with a strategic plan, succession planning, law firm governance, marketing and business development, or planning a law firm retreat. However, any one of these endeavors may fail during the implementation phase if the firm’s organizational culture does not support them. A firm’s organizational culture may be its greatest strength for determining and achieving its immediate and longer-term objectives.18

    This is why the definition of law firm culture (for example, innovative, stodgy, collegial) is not as important as the shared behavioral expectations. The behavioral norms guide the way in which members approach their work and interact with one another. Identifying the norms that guide members’ behavior can help to understand the differences that underlie effective versus ineffective organizations.19 Measuring a firm’s shared behavioral expectations or organizational culture can help a law firm predict success. [Note: For an explanation of how to shift from a mindset of resistance to a culture of innovation, see “The Path to Innovation: It Starts with Pain Points” at page 22 in this issue.]

    How to Assess Culture

    One of the world’s most widely used and thoroughly researched tools for measuring organizational culture is the Organizational Culture Inventory® (OCI®).20 The OCI assesses an organization’s operating culture in terms of the behaviors that members believe are required to “fit in and meet expectations.” Four of the behavioral norms measured by the OCI are constructive: they facilitate problem solving and decision making, teamwork, productivity, and long-term effectiveness. Eight of the behavioral norms are defensive, because they detract from effective performance.

    A constructive organizational culture has empirically been proven to enhance performance in organizations whereas a defensive culture can sabotage an organization.

    The OCI takes less than 20 minutes to complete. There are approximately 120 questions regarding behaviors in the organization. Respondents determine on a scale of 1-5 “[t]o what extent are people expected to or implicitly required to…?” Examples include 1) point out flaws; 2) never challenge supervisors; and 3) maintain their personal integrity. Individual survey results are confidential and are categorized into three types of cultures – constructive, passive/defensive, and aggressive/defensive.21

    In a constructive culture, members are encouraged to interact with others and approach tasks in ways that will help them meet their higher-order satisfaction needs. In a passive/defensive culture, members believe they must always interact with people in ways that will not threaten their own security. In an aggressive/defensive culture, members are expected to approach tasks in forceful ways to protect their status and security.22

    The outcomes associated with constructive culture result in both individual members and the organization as a whole benefitting. At the individual level, members are satisfied, healthy, and motivated to perform to the best of their abilities. At the firm level, norms for coordination, cooperation, and mutual support enable members to rely on one another and work as a team. The end result is that services offered by a law firm with a constructive culture tend to be very high quality.23

    Endnotes

    1 Geert Hofstede, Cultures and Organizations: Software of the Mind 3-19 (1991).

    2 Edgar H. Schein, Organizational Culture and Leadership 18 (2010).

    3 Robert A. Cooke & Janet L. Szumal, Measuring Normative Beliefs and Shared Behavioral Expectations in Organizations: The Reliability and Validity of the Organizational Culture Inventory, 72 Psychol. Rep. 1299-1330 (1993).

    4 John P. Kotter & James L. Heskett, Corporate Culture and Performance 11 (1992).

    5 Susan Saab Fortney, Taking Empirical Research Seriously, 22 Geo. J. Legal Ethics 1473, 1474-78 (2009).

    6 Elizabeth Chambliss, Measuring Law Firm Culture, 52 Stud. L. Pol. & Soc’y 1 (2010).

    7 Id.

    8 State Bar of Wisconsin, Board of Governors, The New Normal: The Challenges Facing the Legal Profession (July 2011).

    9 Erin J. Cox, An Economic Crisis Is a Terrible Thing to Waste: Reforming the Business of Law for a Sustainable and Competitive Future, 57 U.C.L.A .L. Rev. 511, 551 (2009).

    10 Steven J. Harper, The Lawyer Bubble 103-04 (2013).

    11 Marc Galanter & William Henderson, The Elastic Tournament: The Second Transformation of the Big Law Firm, 60 Stan. L. Rev. 1867, 1882-99 (2008).

    12 J.A, Rose, Cultural Concerns, Legal Management (2013).

    13 John S. Smock, Peter A. Giuliani, Gary B. Fiebert, & Joseph V. Walker, The Legal Marketplace Outlook, No. 4 Of Counsel 6 (2014).

    14 Raquel J. Gabriel, Tying Diversity to Organizational Culture, 102 Law Libr. J. 507-12 (2010).

    15 Cynthia Thomas, What Makes Law Firms Succeed or Fail? Law Practice (Jan./Feb. 2014).

    16 Terrence E. Deal & Allan A. Kennedy, Corporate Cultures: The Rites and Rituals of Corporate Life 22-23 (2000).

    17 Jack Zemlicka, Law Firms Turning to Non-lawyer Managers, Wis. L.J. (Oct. 26, 2009).

    18 Kim S. Cameron & Robert E. Quinn, Diagnosing and Changing Organizational Culture 5 (2006).

    19 Robert A. Cooke & Janet L. Szumal, Measuring Normative Beliefs and Shared Behavioral Expectations in Organizations: The Reliability and Validity of the Organizational Culture Inventory, 72 Psychol. Rep. 1299-1330 (1993).

    20 Robert A. Cooke & Janet L. Szumal, Using the Organizational Culture Inventory to Understand the Operating Cultures of Organizations. Handbook of Organizational Culture and Climate (Thousand Oaks, CA: Sage Pubs., 2000).

    21 Id.

    22 Id.

    23 Id.

    24 www.law.georgetown.edu/academics/centers-institutes/legal-profession/research/projects.cfm.

    25 Id.

    26 Robert L. Nelson, Are We There Yet? Empirical Research and Predicated Demise of Large Law Firms: An Introductory Essay, 22 Geo. J. Legal Ethics 1249, 1257 (2009).

    27 Susan Saab Fortney, Systematically Thinking About Law Firm Ethics: Conference on the Ethical Infrastructure and Culture of Law Firms, 42 Hofstra L. Rev. 1, 7 (2013).

    28 Cooke & Szumal, supra note 20.




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