Laura Leopard on Law Firms’ Current Succession Planning: Step One – Do Nothing (TGIR Ep. 215)

Marlene Gebauer 0:07
Welcome to The Geek in Review. The podcast focused on innovative and creative ideas in the legal profession. I’m Marlene Gebauer.

Greg Lambert 0:14
And I’m Greg Lambert. So we are once again going to reach into our alumni list this week and pull out a former guest who was here with us about this time last year. I think, Marlene, do you want to introduce who he pulled off our Rolodex this week?

Marlene Gebauer 0:32
Yeah, I would be happy to. We’d like to welcome Laura Leopard founder and CEO of Leopard Solutions. Laura, it’s we’re really happy to have you back here on The Geek in Review.

Laura Leopard 0:42
Thank you, I’m very happy to be here.

Greg Lambert 0:44
So Laura, I know, every year you come out with some great surveys, and we talked about one last year with the women retention in law firms and legal industry as a whole. And this year, we’re gonna touch on something that’s probably in the same vein, but kind of on retention. But on the on the other end of things, and that is succession planning and have a great report that you put out. And, you know, Laura, on that, based on that report, it seems like a lot of top law firms have partners who are nearing retirement age. And I imagine that, you know, this is our Boomer generation that that is finally finally getting to retirement. So yeah, no, no, no, your opinion, there are no animosity from this Gen X or here, I can tell you that not not at all. So, so in your report, you know, how are these firms planning for the future and making sure that there’s a lot of talent that’s about to walk out the door? In a lot of leadership that’s about to walk out the door? So how are they planning for these partners to retire?

Laura Leopard 2:00
Well, from what we understand, they’re really not planning at all. When we got it and everyone’s shocked? Yeah, we contacted, like 13 law firms and talked to people in different departments to ask them to cooperate with the white paper and come and be on the webinar. And they all said succession planning. Yeah, we don’t do that. Yeah. We are terrible at that. So they all said no. And we really got the idea from talking to a number of consultants and stuff to this is really just something they are not focused on at all, which, you know, poses a problem for their long term future. And recent events, sort of prompted us to take a look at this to see what the real world toll is, of not having a succession plan. And not, you know, having older leadership step aside. So younger ones can move in, and there really is, there really is a price that they pay for that.

Greg Lambert 3:11
I’m just curious, the previous generation, which had, which I think is the silent generation, silent, Silent Generation, you know, we used to have very kind of almost draconian rules that people had to retire at 65. And, you know, there was, whether you liked it or not, there seemed

Marlene Gebauer 3:32
then it kind of crept to 70. And, you know, and it just it’s like, creep, creep creep.

Greg Lambert 3:38
You think that by pulling some of these rules away that well, let me ask you this. Is it the boomers that are to blame? Or is it the silent generation? That’s to blame for the lack of secession planning coming up? No w?

Marlene Gebauer 3:55
There’s gotta be somebody to blame. There has to be someone.

Greg Lambert 3:59
And it’s Millennials probably.

Laura Leopard 4:03
No, it’s not millennials. It’s, it’s the people at the top, it’s the people running the show. And when those rules changed, and there was no longer, you know, a forest retirement, they just kept going because they could, there was nothing really to stop them, you know, from from continuing, and really no motivation to leave. It’s not like they have a retirement plan in place. It’s not like you know, they will continue to get benefits from shares of the firm after they leave the firm and retire, there’s really no incentive for them to step aside. As long as they stay at the firm. And as long as they they keep all that wonderful origination credit. And as long as it then that gravy train just kind of keeps rolling forward. But in many instances, it’s to the detriment to the firm at large. So when you when you have a generation, or you’ve got leaders at the top, that don’t want to step aside really for the good of the organism for the good of the firm, then you’re gonna have a problem. They don’t have an incentive to leave. And there is no, there is no parachute for them when they leave, either. So if they haven’t made enough money, they feel like they need to retire. That’s one issue. But then I think there’s also another issue that’s rarely talked about. And that is the huge generational divide that we see today with millennials and Gen Z. And now other other folks at the firm saying, you know, what, I want to life now, I just don’t want to be a partner at this farm. I want a life. When you’ve got people at the top, that missed birthdays, missed weddings, you know, every weekend working hours, if they leave today, what kind of life are they going to have? I think they have a hard time seeing what life will be without being this partner in the firm without being this managing partner. Right? They sacrificed a great deal to get to the top. And I do think they resent the fact that people now at the farm are not willing to make those same sacrifices. They’re confused by that. And I think it really sort of shakes them to their foundation.

Marlene Gebauer 6:29
Yeah, I mean, it’s pretty much you know, who they are at work has become that’s part of their psyche. And it would be hard to transition from that into, you know, a retirement phase. And as you said, like, How can you even imagine what that would be? It would be so different, right?

Laura Leopard 6:47
I mean, if you are spending the majority of your time and waking moments and efforts at work, that also means that you haven’t had time to cultivate other interests outside of work, you know, you haven’t built up a structure that you could, that would help ease your transition, you know, from that work life to to a retirement situation. And I think that is another problem. I have a friend who has been working with not an M law firm, but a midsize firm where the managing partner is in his 80s. And called, you know, she was there to help talk about succession planning, because he realized he had to have someone take over the farm and his, and his big problem was, no one wants to work today. They all want to see their kids. I didn’t see my kids, you know, it’s a big

How dare they?!

Marlene Gebauer 7:43
What’s good for me is good for you.

Laura Leopard 7:45
That’s right. And that kind of thinking, is not going to cut it today. It’s just not going to work anymore. It’s worked for a long time, but it’s not going to work for them in the same way moving forward.

Marlene Gebauer 7:59
And I might be getting ahead and in terms of the questions, but it just struck me that firms aren’t sort of helping with kind of these transition plans or helping attorneys with, you know, how to think about these types of transition plans and prepare them for it, that there’s no help there to do that. It’s just, you know, you’re you’re either here, you know, you’re you’re working or then suddenly you’re not, and there’s no sort of in between, that I know of that sort of firms are sort of contributing towards,

Laura Leopard 8:30
Right. Well, that’s because, I mean, if you think about it, you know, law firms are so different from from all kinds of other, you know, corporate structures, right? If you if you look, if you look at the accounting industry, and you look at the the big four, right, they’ve got all this figured out, they know how to deal with succession. And they have, you know, a date and a time that these people have to exit, and they have retirement plans, and they have, you know, stock they have, they have all kinds of stuff that help ease that transition in law firms. It’s everything’s on an individual basis. I have my book of business. And these are my goals. No one at the firm is thinking about the overarching problems of the firm if they want that firm to continue, right? Yeah, there was a startling statistic that we mentioned in the webinar was like, only 30% of law firms live beyond sort of that first generation. It’s because they’re not thinking for Long Term Life of that law firm. Because everything is sort of built on an individual basis. Right. Your book of business, your this your that there is no retirement plan, even though I have heard of some firms that are starting like an annuity kind of program that will help continue to you know, give these partners income after they have retired. That’s something all law firms should be thinking about doing. as well as helping attorneys understand the importance of succession planning with their own practice with their own practice, you know how to bring people in how to, you know, get the associates under you working with the clients that you have, so they’re familiar with them. So when that you actually do exit, the firm is, is able to keep that business, there’s so many things that firms could be helping these partners do that could smooth that path to succession. But they’re just not doing it. They’re not talking about it, they’re not making a plan. So they are going to fall victim to those choices, as either people leave, or as younger partners and younger associates look at the farm and say, I’m not going there. I’m not going there. What what the firm requires what the firm stands for is not what I want. And they will make decisions on that. And they’re not going to continue to choose those firms, or the best and the brightest may not continue to choose those firms. You know, we’ve seen a lot of people that have made statements that, yeah, they’re gonna go work for big law, but their plan from the outset is only to be there for a couple of years. And then they can pay down their law school that and then they can go somewhere where they can really plan on having a life. Is that really great for big law? No, it’s not. You know, when we reported on the women leading in mid career, which they are in huge numbers, we also saw that men are making that same choice. They’re making that same choice, leaving in mid career, you know, men had more opportunities in mid career. So more people are being recruited and hired in mid career, you know, for men, but they’re also leaving in big numbers. All of that is a risk to the farm. And we, when we looked at those firms, we saw that they were top heavy on the top for the older age groups. There were also you know, younger people at the bottom and a pretty good number and the slimmest portion of that pyramid, were those mid career attorneys. And that really should be much bigger, because that’s where a lot of that income is driven.

Marlene Gebauer 12:20
Yeah, the income and that’s where your your next leadership is coming. Right. actly. Exactly. Right.

Laura Leopard 12:25
So all of that poses a risk. The question is, do they really care about that? Do they really care that this firm does continues? Do they really care about, you know, being able to recruit the best people from law school and having them stay at their firm over time, if they really care about that, then they’re going to have to make some hard choices, and start to think in a more long term way.

Marlene Gebauer 12:53
So I think one of the challenges with having kind of, you know, a top heavy partnership, older partnership is the road to making partner is getting longer for everyone whether you know, they start as an associate, they come in laterally. And you know, you’ve kind of hinted at this just now it’s like, do you think it makes it harder for associate senior associates to, you know, to stay motivated and to stick it out? And is it shrinking the pool of new partners down the line?

Laura Leopard 13:21
Oh, I think absolutely, it is. There’s really a few factors that kind of, you know, affect this. But it was startling to us, when we looked over time to see how long it took people to make partner right from an associate in 2012. For entry level hires, it took 1353 days on average for them to make partner at their firm. Today, for entry level hires, that number is 3229 days. That’s enormous. Every year, it’s growing at a rapid rate for laterals in 2012, on average, 965 days. Today, it takes 1622 days. So the time it takes to make partner has increased over time, in a huge degree. But something else has really changed. Our friend Bruce McEwen over at Adam Smith, Esquire wrote an amazing paper about the rise in non Equity partners. And he did say I think there’s at least seven firms now, where there are more non Equity partners than there are Equity partners. And that number has risen to a great degree and it’s going to continue to rise. What this tells me is that those Equity partners are gaming the system. You know, if you’re a non Equity partner, you’re basically a senior associate with The title, it’s like how everybody used to hand out the title and vice president to somebody, right? Like put it on the door, don’t give them a raise, give them a new title. Yeah, well, that’s what they did to this group, this group of non Equity, you know, partners. And by doing that, the other thing that they do is make sure that their PPP stays nice and high. Right. So while they’re not, they’re increasing the number of partners at the firm, they are holding fast to that small group of Equity partners, so they can inflate their profits per partner numbers. What is the say to the people that go to work for these firms? Wow, wow, it’s sort of like a shell game, right? You want me to come in, you want me to make money for the firm, you tell me that you want me to succeed and stay here and make partner yet you make it harder to reach those goals every year. Not only that, but the number of billable hours required has also exploded since 2012. And as salaries have risen, of course, so as those billable hour requirements, so they really have set themselves up for failure. Yeah, who’s going to take that bargain. When they became partners, that guys at the top, the rules were different, it was easier to make partner low, so many years ago than it is now. They have made it longer, they have made it harder, they have made their requirements much, much more difficult in order to stay and make partner Oh, after COVID, you’ve got an awakening of people that say, I don’t need this. Why do I need this? I you know, during COVID, I got to put my kids to bed at night, during COVID, I got to actually see my wife, I’m not going to give that up. There’s a struggle, there’s a struggle, but for leadership to convince these kids to stay, and not even kids, but that even those in mid career to stay and get that partnership ring is going to get harder and harder for them to convince them that this is what they want.

Marlene Gebauer 17:09
Oh, they see the system is game, they figure out how they can game the system, you know, and to their benefit.

Laura Leopard 17:15
That’s right, that’s right, as well, they should as well, they should they should they’re you know, these are their these are their lives. And frankly, if the firm is really just all about enriching those people at the top, who’s going to buy into that, who’s got to buy into it, if they structured it more like a, you know, a normal company, where they had an exit plan, they had a retirement plan, they had a profit sharing plan, they had, you know, something like that, that really made everybody feel like they all had a stake in the firm. And in the game, I think more decisions would be made that were beneficial to the firm as a whole, instead of just those people at the top.

Greg Lambert 17:58
And just a point of clarification, when you talked about the number of days that it took for an entry level attorney to make partner, is that to make non Equity partner or to make Equity partner?

Laura Leopard 18:11
Well, that we could not distinguish over that time period. So now is title of partner.

Greg Lambert 18:18
Yeah, my guess is that’s for most firms. That’s non Equity. Because most have that that three, three step career path of associate non Equity Partners and maybe Equity partner. And I think Bruce is under estimating the number of firms that have had th is model, right. Well, if we kind of talked

Laura Leopard 18:43
with him, everyone should get that paper. It’s a really great,

Greg Lambert 18:46
Yeah, it’s a great paper. So we touched on this a little bit where we were talking about people that are really in their 40s that are mid career or just leaving law firms. Now, I think we, again, have touched on why this is, but what do you think firms could be doing to better retain that group of senior millennials, younger Gen Xers that are in that sweet spot that that we really need to have.

Laura Leopard 19:15
And unfortunately, it’s everything that they don’t want to do. That’s, that’s the bad in order to keep those people they’re gonna, they’re gonna have to do a lot of things they don’t like. And that’s really, you know, sort of looking at everything, you know, from that from the top down. In our white paper. There was a an anecdote about a post that went viral on LinkedIn, from somebody who was a partner in big law, and he decided I’m stepping off the hamster wheel. I want to life I want to see my family. I turned down offers. I’m just done, right. This has to do with, you know, forcing everybody back into the office five days a week. It has to do with billable hours. Is that awful billable hour number that goes up every year. All of those things, the law firms tell us or that will never change, it’s impossible will never change. Well, I got news for him. Unless I start considering that there’s going to be a whole new crop of competitors. We see all the time, new virtual law firms cropping up, they are taking these people that are leaving big law, they are taking those people and they are letting them work, whatever hours they want. They’re letting them work from home, they’re, they have so much more freedom. And if they want to work a lot, they can work a lot. If they don’t, or they can’t, they don’t have to, you know, luckily, there are firms out there that have learned some lessons and are making some different choices. You know, in our, you know, one of our women white papers, we talk about several firms that have flex time, where they they made partners, probably non Equity partnership, but they’ve done that on flex time where they’re really working on a part time basis. And one of the quotes I remember from that is an attorneys boss said to her, I would rather have you 50% of the time than most of the associates out there 100% of the time, it’s about retaining good talent, and making accommodations to keep them, you know, there was a time when firms did not operate under the billable hour, there were multiple ways that they had fee arrangements and fee agreements. It’s a rather recent invention, this whole billable hour thing, and it’s really gotten out of control. Here’s another little nugget for these firms. Churn is very costly. Yeah, they’re these firms lose 10s of millions of dollars a year in employee churn. Because replacing people not and I’m just not, I’m not talking about recruiting fees, I’m talking about all the other fees, I’m talking about the training and the onboarding, and the time that it takes them to get ramped up, and to really being, you know, a fee earner for the firm, all the money that they have lost from all the people that had walked out the door. So if they looked at it from a holistic business sense, and they looked at all the cost of losing valuable, talented people, they looked at the cost of churn. And they also looked at customers trying to make a decision. So here’s my choice, I need to pick a law firm to work with. And Mike and I go with this 82 year old attorney, who may or may not be there in the next few years, they could retire, then I’m going to be working with who knows who, you know, there are questions that clients make, because they worry about succession. If I choose you as my law firm, I expect to work with you for the next 10 years, who is really going to be working my case. Will it be you or will it be you know, someone else? There’s so many business problems that come up from the way that they’re currently doing business? Yeah, there’s people at the top making a lot of money right now. Yes, there are and they want to continue that gravy train. But is that in the best interest of the firm as a whole? That’s the question that they really have to ask.

Greg Lambert 23:21
Yeah. And I know on the virtual firms, I know we have at least one virtual firm that’s in the law. 200. And that’s FisherBroyles. And a new up and comer is Scale, which I just saw in the news this week, which merged with a with a boutique here in Texas. So you know, those are real. And I think you know that they have a great opportunity, we’ll probably see more of those. You definitely will. He definitely, especially as they’ve started asking people to come into the office four or five days a week.

Laura Leopard 23:54
That’s right. Now, now, you know, we should watch and report on all of this. Because as these virtual firms start creeping up into the, you know, top 200 ranks, that should really make everyone stop and consider what the next five to 10 years are gonna look like. Here’s the thing. The world is changing so quickly, right now, the foot is down on the gas pedal. And no one knows where exactly, we’re all going. We’ve got aI out there, we’ve got aI going to be helping them in their work. There’s, there’s multiple changes in almost every field and then you’ve got the law, which is on an island.

Marlene Gebauer 24:38
And you’ve got big law.

Laura Leopard 24:41
That’s right. Well, they can’t stay there forever and survive, right? They’re gonna have to adapt and change because the world is rapidly changing around them.

Marlene Gebauer 24:52
Right, right. Looking at the ages of most managing partners, I mean, many seem to be on the more With, shall we say experienced side? You know, and there could be a benefit to that, you know, do you think having sort of longer tenured leadership is better for law firms? Or is fresher thinking needed to, you know, should there be more of a mix? Should there be sort of regular turnover? Should there be mentorships?

Laura Leopard 25:21
Boy, I think I think there should be all of that, I think there should be regular turnover, I think there absolutely needs to be mentorships, we have to look at the, you know, origination credit system and how they do that, that definitely has to change. It’s really, you know, we talked about age, I don’t want to get into ageism, it’s, it’s, it’s really about a state of mind. You know, if if they are 56 and close minded, they’re just as much a danger as if they’re 85. And closed minded. Right. The one problem, I think that the leadership that’s on the older side, at a lot of these firms, it’s a recruitment problem. It’s a recruitment problem, because I think people tend to believe they are going to be close minded at the top. And if we see those same firms, bringing people in five days a week, and there’s no flex time, and there’s no this and there’s no that there, Diversity numbers are terrible. There’s, I mean, there’s all kinds of things that combined to make people look at that firm and go, I can enjoy. I’m not gonna go there. Yeah, we sort of broke it down, we looked at the lateral partner success by looking at the ROI, you know, on partners that they brought in, and it was really interesting, we looked at the top 200. And the top 200 is not created equal, right? From from the number one spot to the 200 spot, or really, like 178. Now, because there’s not that many left, we saw a big disparity. And in the top 50, there was a huge difference in ROI between the firms that had younger partnership, to the very old, the youngest band of partnership, in that top 50. For lateral partner success, their success rate was 87%. Now, that same group of firms that had the oldest band of managing partners, was a 72% success score, that’s a big divide, that is a big, big divide. So when people are trying to make a decision about where to go, you know, they’re gonna look at a number of factors. But older leadership, for good or bad, has some connotations that go with it, you know, they’re not a progressive firm, they’re not forward thinking, I would much rather, you know, go to this firm, because they seem to be, you know, more, more progressive, right? People also have to make room for other people. If you want to go to a firm, where the majority of partnership are way beyond retirement age, as a mid career partner, is that going to be a good choice for you, or you feel you’re going to be battling them for what you’re looking for, or for them just to make room for you, you know, to be in their firm? There’s a lot of questions around that. But when we looked at that ROI, it was really clear, who was doing better in retaining that partner talent, and it was the firm’s that had that younger group of managing partners.

Greg Lambert 28:40
You know, as we’re talking, it reminds me a lot of our it almost runs parallel to our political system, and how we’re seeing a lot of leadership. You know, we have we have a broad range of ages that are in in politics, but most of the leadership that we see, especially in our federal government are in their 70s and 80s. And one of the reasons that this happens is, you know, there aren’t any term limits, and it’s very, it’s very hard to vote out somebody that’s out that’s in office. So taking that situation and looking at how law firms are. Now we talked about before that we had mandatory retirement ages, we also had term limits on leadership, that leadership was seen as cyclical that you you spent three, six years, eight years and and then you went back and went back to work, or retired. But now it seems like the leaders of law firms tend to almost have some type of tenure, and that it’s almost impossible to get them out. Do you think maybe we need to bring back term limits on how long you can be in leadership and then but Does that also bring bring its own problems with it?

Laura Leopard 30:02
Well, it might, because if you have someone that’s doing a tremendous job, you want to keep them in that job, right? So I don’t term limits, you can make them a bit longer, you can make them like instead of three years make it like a 10 year term limit, you can’t go beyond this. Something like that might work. But I really do think they have to start looking at a retirement ages again, and it doesn’t have to be 65. You can you can take it up to 7071. Beyond that, just take a minute and reflect what’s going on in our country today. Right? Everyone is in despair that everyone running for the two front runners running for the highest office in the in the land are in their 80s. And the country has reacted to that by being very depressed by that prospect. Right. So imagine, you know, what, what attorneys or young attorneys that are looking at this farm and looking to join it, how they feel about it? I mean, it’s I don’t think they can deny that that that is a problem.

Greg Lambert 31:14
Oh, he’s like the people that are five years away from retirement for 15 years. So

Marlene Gebauer 31:20
yeah, a couple in a couple years. Yeah. Couple years?

Laura Leopard 31:26
I know it can be it can be hard to pick me hard to let go. And I think that’s important for firms to look at that. How can they ease the exit? And how can they do some sort of restructuring, so they continue to have some income after they leave the firm, if they really look at it, that way, I don’t think you would have the problems that you have today, you know, especially if you do have some sort of term limit for ages, right where they have to, they have to retire, people can really start thinking and planning for what to do, you know, after they have to leave their farm, then they might start looking at cultivating things outside of work, because I think that’s really important to helping their exit, is to show them that there is life after leaving the firm, and not just becoming a upcounsel. You know, really, really retiring and going on to do something else having another challenge in their life, something else to do. And firms can help with all of that. But all of that takes thoughtfulness and planning and the will to do it. And right now they don’t have any of those.

Marlene Gebauer 32:38
All right. Well, you’ve you’ve set up my next question perfectly. So thank you for that. So what are some examples or case studies of law firms that you think have done succession planning really well? What can other firms learn from that? Or how could they institute it?

Laura Leopard 32:56
In our webinar? Somebody asked Bruce MacEwen, that same question. And he was silent for about five seconds. And then he came back, he goes, I really I have no examples for you. I have no examples of a firm that really do executive planning. Well, I think, you know, he goes, I can tell you where it happened by accident that this succession planning work, goes because but I really don’t know of any examples where a thoughtful written, you know, real plan was successful, because they just haven’t done it.

Marlene Gebauer 33:30
Right now we’re in depression mode again.

Laura Leopard 33:33
Well, it doesn’t mean they can’t do it. They just have to commit to doing it. And they have to recognize the problem.

Marlene Gebauer 33:41
And it’s a hard conversation, I imagine because the people who are making these, these determinations are the people that’s going to impact and so it’s like, it’s very, I imagine it’s very personal. And that’s a hard thing to do.

Laura Leopard 33:55
And as Bruce call that it is the third rail for law firms. You just don’t touch it, because people can get hurt and offended and you know, irate. So it’s a tough subject to broach, it could ruffle many, many feathers. But looking at it from a business perspective, it makes complete sense to do it. And if they could take the personalities and take the, you know, personal feelings out of it and just look at it as a strictly business proposal. I think it could help convince people that it’s the right thing to do.

Greg Lambert 34:34
Yeah, but it’s hard for people in power to give up power.

Laura Leopard 34:37
Oh, it is. Oh, it is. Yes, it is. Yeah, we think look at George Washington, who was hailed as a hero because he had the courage to turn down a third term and the courage to say no, I don’t want to be your king. So it does take courage to make these decisions. It takes courage and it takes you know, A real commitment to the firm itself to make these decisions. And these leaders at the top can do it, they can do it. They just, they have to want to, they have to want to, but it will take courage in order to make this change. But if they don’t make it, they’re really in danger of the firm, falling from its lofty post, or even, you know, just just crumbling and falling apart. Let’s remember, like, as I mentioned, in the white paper, I really started looking at this, after we saw a big profile exit out of a top 200. firm. And it was because it was over 100 attorneys, right, that left the firm. And it was because they disagreed with the people at the top, according to reports, who can withstand that? Right, what firms can lose 25% of their income as they walk out the door and survive and still be as vital as they were before. Believe me. There’s not many, and they’re in danger of defections like that, if they continue to be unwilling to change and unwilling to bend. Yeah. So there’s there’s a danger of doing something. And there’s a big danger in doing nothing.

Marlene Gebauer 36:21
Big danger in doing nothing. Yeah.

Greg Lambert 36:23
So let’s, let’s say hypothetically, there’s a there’s a George Washington managing partner at an at an analogue 100 firm that reaches out to you and says, Hey, we’re really struggling with this. Is there like one piece of advice that you would give this person this brave person that saying, yes, we need we need to change, but we don’t know how, what do you think would be one of the most important things that they would need to focus on?

Laura Leopard 36:51
Well, I think they have to have the willingness to put everything on the table. Everything, just as a an exercise, everything is on the table for change. And when I say everything, I mean everything. And they really should bring in someone from outside that should bring in, you know, a law firm consultant, and have them go over all of those things, what they could change in order to make their their firm, stronger, more resilient, and more attractive to the new people that they’re trying to recruit. And for those mid level people that they’re trying to retain. I hear all the time. You know, I was in a conversation with a law firm last week where and it was, it was kind of funny to me, because they said, Yeah, you know, what we’ve noticed, we’ve noticed that women are all leaving mid career like, yeah, duh, yeah, I got, I got two white papers I can give you that can give you all of those numbers. And I’ll tell you why. And I’ll tell you how you can fix it. So everything should be on the table. If you really want to solve this problem, you have to look at everything objectively, you should bring in fresh outside eyes that can help you weigh the pros and cons of making a change here or there. But if you really want to be that remarkable leader, that makes changes that assures this firm’s longevity over you know, for another 100 years, then this is what you have to do. And this is the time to do it. Because we are at an inflection point, I really do believe that the pandemic changed a lot. UFC law firms change a lot over time, the world around us, however, is changing at an even more rapid rate. And if they are not willing to look at what’s ahead, look at their current problems. See what they did in the past that helped bring these problems right up in center, you know, for today, then they’re gonna Yeah, their their success is going to be limited in the future.

Marlene Gebauer 39:02
Okay, Laura. So you know, the drill, we ask all of our guests our crystal ball question at the end of the interview. And so I have to point out about a year ago, we asked you the same question. You know, I wanted to mention one thing that you said that I think is relevant to this discussion. You said that younger generations like Gen Z, and millennials are also questioning if law firm partnership is worth it, given the work life balance sacrifices required, you know, the partnership bargain is becoming a bad deal. So how do you think this may add to the succession issues in the future?

Laura Leopard 39:38
Well, you know, for one thing, it’s going to be a short term is going to be a real recruitment problem for them. If everyone is looking at these big law firms as a short term step, you know, that’s going to be a big problem, right? But here’s an even worse problem. And it’s gone beyond just millennials and Gen Z. Because now you see it Going into different generations, the pandemic really changed the mindset for a lot of folks, I was at an art conference on a panel with a partner at a, you know, big law firm was in his 50s. And he said, he goes, yep, I’m never going back into the office, again, I got a dog in the pandemic, and I’m not going to leave my dog. This is this is a 50 year old partner that made the state but Right. And you see examples all the time of partners leaving, because partnership is not what they expected. Partnership did not make anything easier. It wasn’t the brass ring that they thought it was going to be, it was more work and more responsibility and less time at home, and they don’t want it anymore. So it’s not just millennials and Gen Z, it is now creeping up among mid level folks and into partnership. So a lot of their minds have changed. You know, I also there were a rather revolt at a firm recently, the partnership voted against ending remote work, but the managing partner pushed it through and they’re going to bring them back, you know, five days a week, there’s a revolt, that’s going to happen. And it’s not going to be a generational barrier. It’s going to be throughout the firm. It’s creeping, it’s growing.

Marlene Gebauer 41:22
So it’s actually becoming more pervasive?

Laura Leopard 41:25
It is it is and a bigger problem than it was even last year, two years ago. Yeah.

Greg Lambert 41:32
Well, it sounds like you nailed that one a year ago. So I’m gonna cue you up again for this year. So what do you think are going to be some of the big

Marlene Gebauer 41:41
She gets two crystal ball questions?

Greg Lambert 41:45
But what do you think are gonna be some of the big challenges or changes over the next two to five years now?

Laura Leopard 41:50
Well, I think the rise of the virtual farm is really going to shake the industry quite a bit.

Marlene Gebauer 41:58
Are we seeing the beginning of the end of big law?

Laura Leopard 42:02
Well, you know, it’s, it’s been said many times, right, throughout the years, you know, and they have been threatened with extinction time after time. But big law overall may change. You know, why, because the players in big law change. So you have some at the top right, that had been at the top for a very long time. And then you’ve had other people join that group over the years. And now as we just said, we got we got a new virtual firm in the top 200 group, we’re gonna see more of that. And if the really great talent is going somewhere else, then I think you’re gonna see a shake up in what big law is, right? If you’re only measuring stick is money is income to make that group, then you’re gonna see a lot of virtual firms in that group. So I think that group will change, you know, we have our own ranking system, because we believe that firms should be ranked on more than just their financial bottom line, there’s a lot of different ways to measure a law firm, our group of top firms are very different from the amlaw, top 200 groups. And these firms are very interesting to watch. And there are going to be a lot of upstarts that shake up, you know, big law, and big law is going to have to make some changes in order to keep up with it. Pocket Books are tight, people have become accustomed to paying, you’re paying $1,500 an hour for an attorney, right? This billable hour thing, I think, is also going to end up being a threat because some of these new law firms are giving clients what they want. They’re not billing that way anymore. They’re offering them alternative fee agreements, they’re trying to make the client happy. And you know, they’re taking business away from big law, there should be some sort of openness to, you know, alternative fee arrangements, at least, you know, for some clients, and in some, in some instances, but these these little virtual firms that are clipping at their heels right now, they’re going to become even stronger over the next few years.

Marlene Gebauer 44:21
Right. They’re starting from the ground floor in terms of how they’re doing pricing and evaluating the value, whereas these large firms have to kind of turn the Titanic and change everything that they’ve built up, which is a big ask.

Laura Leopard 44:34
That’s right. And when you are giving the customer what he wants, you’re gonna get a lot of customers.

Marlene Gebauer 44:40
Exactly, right.

Greg Lambert 44:41
Well, one one last question. The post Crystal Ball question. Do you think the industry has a too big to fail problem that they think despite what I’m going to do, everything’s going to continue on because we’re you know, we’re we’re, you know, a $4 billion law firm what what can I possibly do to to undermine that? It just feels like that’s kind of the attitude that I’m seeing from a large firms.

Marlene Gebauer 45:15
Nothing’s gonna happen till I leave and then it won’t matter.

Laura Leopard 45:17
Because I’ll be gone.

Greg Lambert 45:20
doesn’t matter how hot this summer is, I’ll be dead soon. So it won’t be my problem.

Laura Leopard 45:26
Well, I think they think they’re too big to fail. But I don’t know that anyone’s too big to fail. And let’s think about it this way. Their capital is people. It’s all people. People make them money, right? It’s not like they are selling, you know, boxes of widgets. And then they can sit on inventory. And they’ve got that, you know, in the bank, people, people make them money, people make them money. What if they can’t get those people? What if they can’t get those people that can command that, you know, $1,500 an hour, billable hour, that’s being the you know, churn that’s making them all that money. So if they are suffering from retention problems now, and they’re suffering from recruitment problems, they are not too big to fail. We have seen law firms go under for these very reasons, a group of 40 attorneys leave here. And the firm just continues to go down over time. And then it’s just gone. Anyone can fail if you were making terrible business decisions. It could take a $4 billion law firm a long time to do it. But it’s like a drip campaign. We see it all the time. Once those exits really start, they escalate, and they escalate. And the more exits that you see the more exits come right behind them. So what they do today really matters and keeping their people happy, really matters. Because those people are what they’re selling the talent of those people. That’s what they sell. And if they can’t keep their talent, then no, they’re not too big to fail. I know they may think they are. But I don’t think that’s true.

Marlene Gebauer 47:15
Well, this has been a fascinating conversation, as always, Laura Leopard, founder and CEO of Leopard Solutions, thank you so much for joining us today.

Laura Leopard 47:25
Thank you so much. I had a great time.

Greg Lambert 47:27
Me too.

Marlene Gebauer 47:28
And of course, thanks to all of you, our listeners for taking the time to listen to The Geek in Review podcast. If you enjoy the show, share it with a colleague, we’d love to hear from you. So reach out to us on social media. I can be found at @gebauerm on Twitter, and LinkedIn.

Greg Lambert 47:44
And I can be reached @glambert on X and @glambertpod on Threads and in LinkedIn Of course. So Laura, how about you is there someone wants to continue the conversation or learn more? Where can they find you online?

Laura Leopard 47:59
Oh, they can find me at leopardsolutions.com I’m also on LinkedIn. I don’t do X.

Greg Lambert 48:08
you know, in the 90s that was that had a completely different meaning.

Laura Leopard 48:17
Yeah, I don’t do that. But you can find me at LeopardSolutions.com.

Marlene Gebauer 48:23
And listeners, you can also leave us a voicemail and our geek and review Hotline at 713-487-7821 As always, the music you hear is from Jerry David DeCicca Thank you, Jerry.

Greg Lambert 48:35
Thanks, Jerry. All right, Marlene, I will talk to you later.

Marlene Gebauer 48:37
Bye Bye