Business-minded Client Service—Not Guilded Profession—the Wave of the Future

Chicago attorney Joel Henning has authored a “Practice Essentials” piece for the ABA in which he likens bar associations and law firms to medieval guilds. Guilds played an important part in medieval towns as they attempted to guarantee craft standards, but they worked primarily to preserve the merchant’s interests and exerted a form of monopoly. Of course, guilds eventually went the way of the sort of hours worked during Chaucer’s time, which were sun-up to sun-down.

What does this have to do with law?  Henning says: “We can’t revert to medieval guilds where lawyers may dominate their clients. Instead, we have to learn to serve clients better.”  He proposes that this be done not only with above-average legal work, but with exemplary client service.

Law firms can keep up with the times, he argues, when they follow the business model of super-successful entities like The Four Seasons and Starbucks.   Written a few years ago, Henning’s protocol can still be entertained today. Guilds, he says, made apprentices work long periods of time before they were considered journeymen, which was one step below the title they strove for: that of master craftsmen.

Craftsmen were ostracized if they found themselves sans the approval of their peers.  It was only upon the vote of all the masters of the guild that journeymen could be elevated. They also had to contribute some worldly possessions.    This reminds Henning of law because “[a]chieving the status of master craftsman ensured a pretty secure life, just as making senior partner in a traditional law firm ensure[s] a life just about as secure as achieving tenure in a university.”

Around the end of the 17th and beginning of the 18th centuries, guilds came under a barrage of criticism. Their detractors accused them of “opposing free trade, hindering technological innovation, and discouraging business development,” says Henning.  And the guilds—for there were more than one—were very competitive, involved in territorial struggles—as well as against non-guild practitioners.  Free trade laws soon disempowered guilds.

Henning says that much the same thing happened to the law industry when its legal trade press took off in the 1980’s.  This led to freely disseminated information. “For the first time, law firms were publicly compared on the basis of economic performance, client base, specialties in particular fields, and successes or failures in various types of transactions or disputes.”’ This, he says, resulted in healthy competition.

At about the same time, bar rules prohibiting the dissemination of such information through advertising and related means came under attack in the courts.  Since then, such bar rules have met with stiff resistance from the courts.

On the basis of such expanded information, and of increased competitiveness, other professional groups like accounting firms, financial advisers, counselors and human resource specialists took away a chunk of what was formerly the purview of traditional law firms.   Advertising, too, helped loosen the hold which Henning says law firms had over clients.  Nowadays, Henning sees a “free market at work”: the sort of market that allows two large firms to merge, and also makes it possible for partners to move from one firm to another for what might be termed “a bigger platform”.

How can firms pattern themselves after successful conglomerates like the aforementioned Four Seasons and Starbucks?  Whereas these companies spend enormous amounts of monies to train their employees, law firms do not.  In the author’s view, law firms spend a great deal to hire their new associates, but then do not expend much to train them. He recommends training them in legal substance and in client service.

Henning also believes that bankrupt law firms can be avoided by better management. For instance, preserving limited funds, rather than seeking to expand, makes more sense for firms that are teetering, financially.  Also, such firms should not pursue “highly volatile practice areas”.

Finally, Henning believes that becoming more business-minded will reduce attorney insecurity—as well as the insecurity of every other staffer, from senior partner to cleaning person.  This, he believes, will go a long way towards crushing the outmoded, guilded way of looking at things.   To read the entire document, go here: http://apps.americanbar.org/abapubs/lrc/pdfs/henning.pdf   To learn more about medieval guilds, go here: http://www.public.iastate.edu/~gbetcher/373/guilds.htm   Graphic courtesy of Iowa State University.

-EM

guilds.jpg

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