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Dreier, Stein & Kahan LLP: Using Talent Strategy to Bring Back the Law Profession

Not many law firms actively profess to care more about providing excellent client service than tallying up billable hours.

January 8, 2008
Related Topics: Technology
KEYWORDS technology

Not many law firms actively profess to care more about providing excellent client service than tallying up billable hours. So, it might take a moment to imagine members of a legal workforce so content they rarely leave to join the competition. In this imaginary law firm, diversity is so much a part of the organization’s day-to-day talent activity that when a newspaper called up to ask about its impressive diversity program, management said, “What diversity program?” But wait. This law firm exists. Stanton “Larry” Stein, partner and head of the entertainment and media department at Dreier, Stein & Kahan LLP, said the aforementioned scenario is just part of the firm’s work model for its roughly 400 lawyers and personnel in Los Angeles, New York and Connecticut.

TM: Describe your company’s approach to talent management.

Stein:  First, you have to be familiar with what’s happening in the legal community. We’re the antithesis of what all the big firms are doing now. In the legal community, there is a consolidation of firms that become national and even international, with offices in sometimes 10 or 12 different cities. They’re large conglomerate organizations consisting of 3,000 lawyers or more. Those are structured very much like a business, and not a profession. They hire 100 young associates with the expectation that only two or so will make equity partner, because the only ones that make equity partner are the ones who generate substantial business. Because they’re not going to be partners, most of those large firms don’t particularly care about mentoring or training these lawyers, because if you’re only going to keep two out of a hundred, it’s not cost-effective. They don’t care about their mental health, their personal relationships, physical health. It’s very much a business, and the individual associates are treated as widgets. You make money off the youngest people working very hard, very long hours, and all of the money goes upward.

Our concept is exactly the opposite. We want to bring the practice of law back to a profession, not a business. Therefore, we have as many partners as we do associates. It’s our expectation that every associate can become a partner. Not everyone does, because everyone doesn’t live up to their expectation, but the vast majority of them will become partners. As a result, we must mentor them, care for them psychologically, physically, emotionally and spiritually. We do a lot of different things, like supply free lunch to all the lawyers every day so they can spend time together. We pay for gym memberships so they can exercise. We insist all associates and partners participate in public interest work. All of our partners have to be on the board of directors of some form of foundation or charitable, public service organization. We believe that you can have a midsize law firm and supply the needs of most of the kinds of clients we want to service.

TM: How have your talent management processes affected workforce performance?

Stein:  Exceptionally well. The problem with lawyers today in the big firms is they go there, they work for a couple of years to pay off their debts in law school, and then they leave. The unfortunate part is they not only leave those big firms, they leave the practice of law because they find the experience so unpleasant. The demands are so great, and there’s no mentoring, no interpersonal relationships. They find it devastating. No associate of ours in 30 years has ever gone from our firm to another law firm. They’ve gone to do different things with their lives, but they’ve never said, ‘I don’t like practicing with you. I want to go practice with someone else.’ Also, the number of students who obtain positions with us is remarkable. We have a small recruitment program, but mainly our recruitment comes from the exposure of our lawyers. For instance, I lecture at Harvard, Yale, Stanford. I teach the entertainment law class at USC and seminars at UCLA. We travel all over and lecture at bar associations, trade groups, etc. People come to us rather than us having to go out and seek them.

TM: You’ve done quite a bit around diversity improvement. Tell us about that.

Stein:  We’re very entrepreneurial. We take a lot of contingency cases, and we look for new emerging markets where we can take advantage of our expertise. For instance, we have an Asia practice, which is very unusual for a firm our size. A number of our lawyers speak Korean fluently and know the Korean market. I recently lectured to the Entertainment Law Society of Korea because they’re going to institute a Talent Agencies Act, and I’m an expert on the California Talent Agencies Act. We also have a very strong Chinese practice, and we’re developing various other areas, as well.

We were given an award for being the most diverse firm because we have a great number of African-American, Hispanic and Asian lawyers, and a tremendous number of women lawyers, including our partner level, not just young associates. A couple of years ago, we had a group of young partners, and of the seven, I think two were African-American, two were Asian, one was Hispanic, and four of the seven were women. The Daily Journal called me and said, ‘Tell me about your diversity program.’ I said, ‘What diversity program?’ They said, ‘Wait a second, you must have an incredible diversity program. Look at your young partners.’ And I said, ‘No. We don’t actually have a formal program. We interview people, and we hire them based on their qualifications.’

If you look at the number of people coming out of law schools nowadays, it’s not hard to have more women than men partners. And it’s not hard to have candidates of any racial, ethnic or religious background, because great people from all those areas are coming out. You’d have to do the opposite — try to prevent people from making it into your law firm and making it to partnership — in order not to have diversity. We were diverse before it became popular. All we did was open our arms to anyone who was a quality lawyer.

TM: What challenges impact talent management in your organization?

Stein:  The biggest challenge is that people know of much larger firms, the international firms that are thousands of lawyers, and people have to recognize we do the same caliber of law. They can deal with as many important and exciting cases at a firm of our size as they can at a larger firm.

TM: Do you think having a different model from the average law firm has impacted your talent management strategy positively?

Stein:  No question. Many of our associates and partners are refugees from larger firms where they found the style of practice there unsuitable to their lifestyle and/or their moral codes. We don’t take certain types of cases where we feel we’re on the wrong side of the issue. [At] most of the larger firms, the issue seems to be totally irrelevant. The ability of the client to pay seems to be the only serious consideration.

TM: How do you measure workforce performance?

Stein:  We measure by client satisfaction, by reputation in the community, by results on successful litigations or deals. At a lot of the larger firms’ profitability is based on hours the same way a manufacturer would base profitability on the number of widgets they can turn out. We’re trying to keep law a profession and not require or obligate people to certain minimum hours. We’re much more concerned with the caliber of work and that people get the work done than with the number of hours they’ve been able to bill to the project. The mega-firms are looking for profits for partners so they can publish it in the national law journal. Their primary concern seems to be the bottom line. We obviously are in business, so we are, of course, concerned with the bottom line, but we hope that we take into account a lot of other factors.

TM: How do you use intangible metrics, such as client satisfaction and successful litigation, to handle performance management?

Stein: We work in groups, in teams, and we’re very familiar with the work of the other people in the office. We do it based upon less empirical, more subjective factors, which I think is more important. [Some] places look at the empirical to determine who should receive a bonus, giving someone a bonus for spending too many hours doing a project, which may earn to the firm’s benefit by virtue of extra billing. I would rather give it to someone who’s more efficient and did a good job in less time.

TM: How have your workforce performance management activities contributed to your company’s bottom line?

Stein: Our workforce is content, happy and team-oriented, and as a result, we have much less stress on people. We have less illness than most places. I feel everybody makes a concerted effort on behalf of the firm because of the way we treat them. That actually generates greater productivity than the opposite techniques used by large firms.

TM: Some of the things you mentioned — less absenteeism, better health, greater discretionary effort — seem as though they would save the company money.

Stein: Right. You have to mentor young lawyers physically, emotionally and spiritually for them to develop into excellent lawyers and contributors to the community. That’s what we try to do. As a result, we don’t have the turnover, for instance, that other places have. Therefore, we don’t have to train and retrain people. A number of my partners have been with me 30, 28, 25 years. Having people around you for that length of time is a real advantage.

TM: What’s next for your organization in terms of talent management and workforce performance development?

Stein: To acquire other, smaller law firms and integrate them into what we do. Our model seems to be incredibly unique and successful, which is contrary to the way that law firms in general are going. We want to make ourselves available as a model to a lot of other lawyers and smaller law firms, [to illustrate] the advantage of our size and the individualized practice that we provide.

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