Managing Partner Roundtable: Part 1

Over a delicious lunch at The Grill Room for our latest Managing Partner Roundtable, we grilled our crack team of DC law firm leaders and industry experts on topics from lateral hires to law firm growth. Thank you to the beautiful Capella Washington DC, Georgetown for hosting and EagleBank and Cushman & Wakefield for partnering with us on the Roundtable.

After a lunch of artisan pasta with Aleppo pepper, chanterelle mushrooms and shaved reggiano cheese and roasted chicken with potatoes boulangère, we snapped a picture of our brain trust:

• Cushman & Wakefield executive director John Boland
• Fox Rothschild DC managing partner and national construction law group co-chair Dirk Haire
• DLA Piper DC co-managing partner and DC litigation head Mary Gately
• Jackson Campbell president and managing director John Matteo
• Arent Fox executive director Kurt Salisbery
• Cushman & Wakefield legal sector advisory group head Sherry Cushman
• EagleBank SVP Andy Bridge

Cushman & Wakefield is also sponsoring and participating in our upcoming Fifth Annual Real Estate Strategies event on Tuesday, April 14. Get tickets here. 

What changes do you see in retention and recruiting of laterals and associates?

Mary: Many of our lawyers come to our law firm to obtain experience and mentorship, as well as to make connections that will help them in their future careers. On the fixed track of traditional summer associate to associate to partner, which is what I did, both the candidates and the firm are much more selective and our summer classes are smaller. We also have a group of professionals that join us with no expectation of a partnership track. There is an opportunity for career advancement, but their focus is not on developing the clients and business necessary to become a partner. We have a blend of career tracks that allows for professional growth and allows us to be more competitive when we're putting in a proposal for a cost-conscious client.

Have you ever worked out the percentage of associates who join out of law school and eventually become partner?

Dirk: The number of individuals who start with the firm and become an equity partner is much lower than we would like. To be more proactive and improve on this, we've tried to identify folks within their first two or three years who have two key skill sets: being a good lawyer, and having the potential to generate business in the future. We try to encourage all of our associates, even new ones, to take interest in marketing. For those who do and start to develop relationships, and in some cases clients, we provide marketing dollars and support. One of our selling points for associate retention and growth is that we believe we can provide a straighter path to equity partnership than some other firms our size, and we try to demystify the path and help them navigate it.

John Matteo: We have 12 equity partners. I was the 10th; every single person who made partner before me was a summer associate or came to the firm early in their careers. I was somewhere else for 10 years, and the two people below me worked other places as well. We stopped our summer associate program six or eight years ago because we were finding that we were giving them great hands-on training right away and then they were leaving, and right now we only hire laterals. One of the questions I ask when I interview people is, "Do you want to be a partner in a law firm?" Because my fear is, I have no back bench. I'm working really hard for the five guys who are going to retire in the next five years, but [laughs] who's going to take care of me in the next 10 or 15 years? 

What other changes are there in terms of managing lawyers?

Mary: You have to give people flexibility in their work-life balance. I'm a product of it. I have a 15-year-old, and for 14 years, I worked part-time: I worked three days a week and stayed home two days. Later I worked four days a week and stayed home one day. I became head of litigation during that time. Last year, when they asked me to become managing partner of the DC office, I decided to go full-time to meet the added demands. This kind of flexibility isn't just for women, and it's not just for family reasons. It's for a variety of reasons. We have full flexibility. One example is a senior associate with whom I work closely in New York. He decided to move to Charlotte, NC, where we do not have an office. The firm worked with him and now he's basically a one-man operation working from Charlotte and he travels to New York when needed. It works because he is a great lawyer, and the firm is flexible enough to allow it.

Dirk: We're doing a lot more of that. In my group, the government contracts group, we have an associate who's been in Chicago for three years. We don't have a Chicago office yet, but she works out of one of our client's offices. This was an important quality-of-life move that we made to keep a talented associate. Similarly, we just hired a lateral equity partner in Kansas City, even though we don’t have an office there either. With technology, we focus more on fit, skill set and need, as opposed to office location.  

How have recent law firm failures impacted lawyers' perceptions of firm health?

Dirk:I will tell you a question I've been getting from folks who have joined from some of the recent high-profile disasters—they want to know how many days a year we operate out of our credit line.

Mary: DLA Piper went to an all-equity model in 2008. I'm a big believer in that, everybody has some skin in the game. We have no long-term debt and our short-term line of credit has been reduced in amount and duration every year so that we end the year debt free.

John Matteo: We're smaller and we are conservative so we rarely draw on our line. That's the question we get asked because we do interview a lot of laterals. We've adopted a model now where we have some contract directors who are bringing in a nice book of business.

Sherry: I met with a firm in NY that was less than 10 years old and the managing partner said that when they bring a partner on, they have no contracts—just a handshake—and you're not a partner when you walk in the door, only if it works out at the end of a year. The firm profits 55%. This is where I think the big firms have to watch behind them. The boutiques, even the midsized boutique firms, can be much more nimble in shifting directions. I think in the next decade you'll see a major shift in how law firms are structured—not only the business, but the partnership. 

What do you consider when thinking about growth trajectory?

Dirk: We've been in the AmLaw200 for a number of years and I imagine we'll jump into the AmLaw100 this year. We've done it largely on lateral growth. We have a very large client base for the size firm we are: we have about 14,000 fee-paying clients in a year, and according to Wells Fargo our peer group averages about 5,000. We're picking up offices—we just added Dallas last year, and Denver the prior year. These are good full-service commercial firms with 20 or 30 lawyers and great relationships in their areas. We are being very cautious about going international. As we continue to grow and fill in the national footprint, we're finding that the most effective predictors are a lateral and/or group who is entrepreneurial and fits into our profitability rate and billing structure; then we throw in an overlay of whether they'd be a good cultural fit in the particular office or with the overall firm.

Mary: DLA Piper recently announced our expansion into Canada. Having grown up in the firm, my practice had been radically realigned from a local practice to an international one. I represent foreign governments who need representation in the United States. I also have clients who want to do business in you-name-it location. I can call up somebody I know almost anywhere and refer the work to colleagues in those offices. The key is knowing the people and resources that we have in other offices. Integration—our partners getting to know each other and their practices globally—is important to the success of our firm.

How does technology factor into it?

Mary: TelePresence is huge. For a firm like ours that has offices all over the world, we've invested in that technology in order to save on travel and still be able to experience the equivalent of a face-to-face meeting. It's so good and high-quality I could read your menu from right here if I were in the TelePresence room. There's absolutely no time lag. I do a lot of defamation work and have had several cases in London; a trip to London is $11k, so it's a huge expense, including our time. Now I don't have to travel, because all of our offices use TelePresences. We'll invite people to come in and have a virtual meeting. I'm a litigator and I can interview witnesses and evaluate them as if we were in the same room. I have a big case in Sweden right now, where we are using the technology. I have not had to travel to Sweden yet. While the upfront cost for the TelePresence in each office was high, it has more than paid for itself in the savings we experience with travel.

John Matteo: One of our largest clients is hoteling its employees and our employees working with that client do not need to travel as much. The client's employees often work from home and have shared office space available when they need to go into the office, so a lot of it is by conference call or video-conferencing.

Sherry: And let's look at other industries. I spoke on a panel with the head of technology for Accenture. They have more than 320,000 employees worldwide. Their tech costs are their second-highest expense, not real estate, by almost two-fold now. And I think you're going to see that shift in the legal industry too.

What's one thing people might not know about you?

Dirk: I played basketball in college at Ball State, making it to the Sweet Sixteen my senior year during March Madness.

John Boland: I'm a former practicing lawyer and just became an empty nester.

Mary: I'm a coach for my son’s Odyssey of the Mind team, which works on creative problem solving.

Kurt: I'm a second generation law firm executive director. My father was the executive director of Wilkes Artis.

John Matteo: My wife and I are big theater fans and our son is on the verge of making his off-Broadway debut.

Sherry: My husband and I have his-and-hers Harley-Davidsons.

Andy: I'm a big Terrapin Club supporter, as a University of Maryland alum married to a UMD alum and with two sons attending UMD.