Whose Client is it Anyway?
In law firms, most lawyers typically get paid for two things: (1) billings; and (2) bringing in clients. Of course, there are a few lawyers here and there who get paid just for being brilliant, but then again, too few to mention.
Today I want to focus on lawyers who get paid for bringing in clients. Time and again during my tenure in law firm management, I saw lawyers who were billing and earning a lot of money, but who did not have a sophisticated understanding of the financial implications of their relationships with their clients. Usually this came up when they were thinking about leaving one firm and joining another firm. They would tell the new firm how much they were billing and give their best guess as to how many of their clients would follow them. More often than not their best guess was wrong, and not by a little bit, but by a whole lot. Rarely was the mistake that more clients than expected followed them to their new home.
The consequences were often bad. Sometimes very bad.
Perhaps their new firm guaranteed them a minimum salary or profit share. Their billings at the new firm were low. Their new employer or partners were unhappy.
Or perhaps they negotiated a formula based in part on the business that they would bring with them. Again, their billings at the new firm were low. Their new employers or partners were unhappy. They were downright miserable.
It is an interesting quirk of human nature than when you are at the top of something, you tend to think that being at the top is the natural order of things. For example, I saw an old white guy U.S. senator on television recently ranting about affirmative action programs and how the only criteria for advancement should be merit and nothing but merit. Perhaps he was right. Maybe he was wrong. But regardless, it seemed to be somewhat disingenuous for him to be so strident in his view when he was appointed (not elected) to his senate seat as a replacement for his father who had previously held the seat.
Similarly, I have observed that when a lawyer has been earning big dollars at a law firm because she has been getting credit for having a huge client base, she tends to think that she is entitled to keep doing so, and that occasionally colours her view of things. Sometimes she feels entitled to have that compensation continue even if someone else is now taking care of that client base. If lawyers such as this decide to leave for another firm, they are sometimes pre-disposed to think that their clients (and the compensation that comes with the client base) will follow them to their new firm. Occasionally they find out the hard way that they did not really understand the dynamics of this aspect of their practice.
What I am talking about is the difference between having a client base and having a portable client base. Having, and being compensated for having, a client base at your existing firm is one thing. Taking those clients with you may be a whole different kettle of fish.
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Firms often have a ‘client lawyer’ or ‘originating lawyer’ classification which they use to track which lawyer gets credit for bringing in the client. They often attach compensation to the lawyer’s ‘originating credits.’??Here are my thoughts on the whole ‘client lawyer’ thing:
In conclusion, it is not uncommon for some lawyers to have overdeveloped egos and competitive instincts and underdeveloped emotional intelligence and financial acumen. It is not difficult for them to fall into the trap of believing their own press and then being smacked in the head by reality.
Post-Script
Some lawyers guard their client lawyer status jealously and go so far as to sacrifice the interests of their clients, their partners, and their associates by trying to keep their clients loyal to themselves and not the firm or other firm lawyers.
Some lawyers go to the opposite extreme and involve other lawyers with their clients whenever it is in their client’s interest to do so. They may sacrifice their hold on their clients by doing so, but they engender loyalty from their partners and associates. They also serve the client better and engender trust with their clients.
I always liked the second type of lawyer more.
VIGIL JURIS, PARTNER, Mumbai
3 年Superb piece Mr. Gottheil, I never took my clients with me, never informed them that I was even leaving , because by the time I had decided to leave, they had already developed a great working relationship with the partners... but the bulk of them followed me ,once I left , because they realized that I used to normally bring out of the box solutions and I would sit to hear their problems at length, which nobody else would do. They ultimately realized that I used to get paid for getting the job done in a brilliant manner , something that even I didn't understand till the time I left and they started to tell me how I solved their problems.
Employment Lawyer | Nominated Top 25 Most Influential Lawyers | Twitter: @empLAWment | Instagram: @emplawment_on
3 年Murray, this is a great article. Imagine person A goes on a date with person B. Person A then introduces person B to person C. Person B ends up marrying person C, and they have been together for many years, building on the relationship, but person A still wants to take all the credit.
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3 年Stunning ! ????????
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3 年Another excellent article. Thank you!
Providing Practical Legal Advice to Clients | Partner at Renno & Co | Co-Founder at 4L Academy | Founder of The Authentic Legal Professional | SMB M&A | Tech | Crypto/Blockchain | Neurodiversity Stuff
3 年Like all your posts, this one is far too accurate. I resonated far too much with #3, since I lived that one in the last year. My favourite part was when clients would say 'who?' when I told them who the firm considered the client-responsible lawyer.