January 30, 2007
Law Firm Credit Worthiness
IOMA, the Institute of Management & Administration, publishes a yearly edition of its Guide to Best Management Practices for Law Firm Leaders.
I was scanning through the collections of white papers comprising the 2006 guide and found particularly interesting a paper titled “Bank Guidelines to Boost Your Firm’s Credit Rating”. If banking relationships are important to you, this six-page paper reporting on the views of Citibank’s Jeffrey Grossman and Joseph Mendola may justify the $439 cost of the Guide. Another source you might consider is Ed Poll’s $29.00 paperback titled The Successful Lawyer—Banker Relationship.
Citibank Private Bank Law Firm Group is an important player in the legal market, and thus, their views are important. It was their views on the effect of culture and management that I thought added something new to the issue of law firm credit worthiness.
According to the IOMA publication, Joseph Mendola believes that partner departures have little to do with dissatisfaction with compensation. “The main reason [for their departure] is that they felt their firm has no appropriate plan, mission statement, or goals for the business”.
Considering the large number of firms served by Citibank, Mendola’s insight carries a lot of credibility. We know the importance of culture and planning on the financial performance of a law firm. Now Mendola has made the connection to the cohesiveness of the firm. Where does culture come from? In morepartnerincome’s view, a culture grows out of partner conscientious and becomes stronger through constant communication, measurement, and accountability. The partners must first agree on three things:
What they want to be—their vision
Their core set of beliefs that guide conduct
The main things success depends on—strategies
Another interesting bit of insight is that, from this banker’s perspective, an autocratic management is more decisive—decisions are made more quickly. As you might expect, they consider management stability a plus.
Their implied preference for the autocratic leader points out the fact that democratic styles tend to run counter to the emergence of the law firm as a business where all of its resources are aligned as a team in pursuit of common objectives. Banks can understand that. They can’t put their arms around an organization where all of its pieces are operating largely independently, each chasing its own star.
Morepartnerincome.com is sponsored by Juris, Inc. For information about Juris® products and services for increasing law firm performance and partner income, go to www.Juris.com.
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