Black Friday Shopping: What You Should Buy Your Associates TODAY

It’s Black Friday and electronics are moving off the shelves like lighting. Although most consider post-Turkey day a shopping spree for consumers, it can also be a day for employers.

Technology can help boost the productivity of your employees, from assistants to associates, so consider taking advantage of the following Black Friday deals:

Cordless Headphones

Most offices are trending toward open plan designs. Even when there are individual offices, many corporate cultures are still promoting “open door” policies. Open door policies allow associates to seek advice from mentors without feeling intimidated, and they also encourage camaraderie across departments and associate levels.

The problem is that open plans and open doors are open to noise and distraction.

Purchase cordless earphones for each of your employees to encourage them to maintain this “open” culture that promotes collaboration among associates, while also maintaining acoustic boundaries.

Cordless earbuds are surprisingly affordable, which make them a great way to reward your workers without ruining your bottom line (Best Buy has your Black Friday beats deals).

Coffee Maker

Have your employees been complaining about the quality of the office coffee? Now is the time to upgrade your diner-style kitchen digs. From espresso makers to milk frothers to wifi connected coffee machines, there are no more excuses for unproductive mornings.

Watches

Although Black Friday is typically reserved for electronics, Amazon is offering deals on its best selling watches.

Every lawyer needs a timepiece, and you can buy gifts for your entire department from the comfort of your home. If your associates wear watches, they are less likely to be bringing out their cell phones in meetings. In addition, it serves as a subtle reminder to arrive on time. 

Make sure your attorneys make use of every billable hour by offering watches this holiday.

Finally, consider stocking up on some Black Friday perks as gifts for your professional assistants, as well.

Did you buy an Apple product for personal use this Black Friday?

Apple is not giving a special discount, but they are issuing gift cards with purchase: For buying an iPad, you will receive a $50 gift card; for buying an iPad Pro, $100; and for buying any MacBook, iMac, or Mac Pro purchase, you will receive a $150 Apple gift card.

An Apple gift card may be just the right token to let your assistant know you value his dedication and hard work. It is also nice to remember as a law firm manager that a “thank you” is not reserved for yearly evaluations or Secretary’s Day.

Looking for ways your firm can streamline its legal services or improve its employee productivity?

C4CM’s training solutions help legal professionals keep up to date with legal services, legal trends, hone your professional skills, stay current on the law, and earn the continuing education you need to ensure individual and organizational success.

Today, these services are also 30% off (here). Happy Black Friday.

-WB

Rare Da Vinci Sold For $450 After Mistaken For $58 Fake & How Your Law Firm Can Assess Its Own Value

After a mere 20 minutes of telephone bidding, a keen buyer spent $450 million on a rare Leonardo Da Vinci painting. That’s $22.5 million a minute, which—unsurprisingly—makes Da Vinci’s “Salvator Mundi” the most expensive piece of artwork to ever sell at auction to date.

Now that’s somebody with a shopping problem.

Of course, when there are fewer than 20 authenticated works in existence by the famous Italian painter, perhaps the price is right. Christie’s auction house in New York estimated the piece to capture over $100 million, but none could anticipate how far the bidding would exceed expectations.

Until this sale, Picasso’s oil painting “Les Femmes d’Alger” was the record holder, sold at $179.4 million at auction. But, the rendition of Jesus Christ in Renaissance garb—“Salvator Mundi”—dates around the same time as the infamous “Mona Lisa,” and is highly recognizable. So, it almost doesn’t matter that it lacks in clarity and detail.

A half a billion dollars may be a steal for such a prize piece of history.

And stolen it was (or, at least, lost) back in the 18^th century. Pundits assumed “Salvator Mundi” was gone forever. The painting disappeared for centuries after it was first commissioned by Louis XII of France.

When it turned up at auction in 1958, experts immediately assumed it was a forgery. It sold for $59. 

It wasn’t until a group of art dealers repurchased the work in 2005 for less than $10,000 that the oil painting was restored and authenticated. A decade later, a Russian businessman, Dmitry Rybolovlev, bought it for $127.5 million in 2013 (read the full story on CNN).

At 26 by 18 inches, “Salvator Mundi” is even smaller than the already shockingly petite “Mona Lisa” (the “Mona Lisa” is a quaint 30 x 21 inches). But, it just goes to show you can’t judge a painting by its appearance. It may have taken hundreds of years, hundreds of mistaken opinions, hundreds of layers of restorative paint masking the true talent underneath, but the painting has finally been restored to its proper value.

In law, like art, don’t underestimate the value of assets in your possession, particularly human assets, i.e., your team.

Building an effective team is often overlooked by firm managers. But, raw talent or expertise—even leadership—cannot succeed in a vacuum. It was impossible for single experts and art dealers to identify the authentic origin of “Salvator Mundi.” It took time and teamwork.

In fact, across most disciplines, teamwork is a key driver of success.

In 2012, Google couldn’t figure out why some of its teams failed and others thrived. So, it set up a data-driven project called Aristotle to find out.

Fast forward a few years, and Google’s Project Oxygen examined whether managers are important (or even relevant) to team success. After much study, Google came up with an answer.

So, how does a company build a perfect team? In a nutshell, the combination of great teams, great bosses, and great business culture (the collective happiness of employees) was at the heart of the company’s competitive advantage.

To learn more from Google’s experience—and to be sure you don’t mistake a $450 million opportunity for $58 one—take the Center for Competitive Management’s course, “Building Highly Effective Teams: Lessons Learned from Google.”

In this webinar, you will learn:

• Five keys / norms of highly effective teams
• How to establish psychological safety in the workplace
• Best practices for clarifying goals and roles
• Eight qualities of great bosses and how to build (be) a better one
• Top five killers of team morale and work ethic

With the proper training, law firm managers can learn to properly appraise its team and the value of teamwork, which—in any medium—leads to wealth.

-WB

Football, Deflategate & Tackling eDiscovery Challenges At Your Firm

It’s November. For Americans, that means two things: Thanksgiving and football.

Mid-season football is not just prime-time TV watching, it’s prime-time playoff predicting. So far, it’s anybody’s game (literally), but quarterback Aaron Rodgers and the Green Bay Packers are certainly making a show of it. They’ve been tapped on the shoulder by pundits looking to predict Super Bowl LII winners. 

Of course, the New England Patriots are having an unsurprisingly star-studded season. Team quarterback, Tom Brady, has already been called out as the possible MVP (most valuable player) pick this year.

Judy Battista for the National Football League (NFL) says, “Key injuries might make the season a slog, but Brady is playing at an age-defying level to cover up those absences.”

It is no Cinderella story for the Patriots. They have long been unstoppable. In fact, it is not easy to be happy for Patriots at all, as a viewer, considering their past victories have been marred by controversy.

Deflategate. You probably still remember the term, whether you watch football or not. Because of deflategate’s widespread news coverage, Tom Brady and the Patriots will certainly play under the watchful eyes of NFL officials if they enter the championships this year.

Deflategate was a NFL dispute where the New England Patriots were accused of deliberately under-inflated footballs during the American Football Conference (AFC) Championship Game against the Indianapolis Colts in the 2014-2015 playoffs.

Eventually, Patriots quarterback Tom Brady was suspended for four games and the team fined $1 million. The Patriots also lost two draft picks.

The investigation underscored the problems that can arise when employees text, talk or email on company-issued phones or use their own devices for business, and then the resulting data becomes eDiscovery fodder.

In an era of widespread use of mobile devices by executives and staff, day-to-day management of electronically stored information (ESI) has become much more complex with increasing ramifications downstream in electronic discovery.

In fact, many a judge considers mobile device ESI to be in the “possession, custody or control” of the employer. Even when the employer might deny responsibility for data on a “BYOD” (“Bring Your Own Device”) machine, the court could, in effect, classify the context as being “COPE” (“Company-Owned-Personally-Enabled”).

For law firm managers, it begs the question: Do you have an acceptable use policy in place? One that contemplates eDiscovery? 

If you hesitated in answering this question, take The Center For Competitive Management’s webinar, “‘Deflategate’ Lessons for eDiscovery Device Policies.”

During this highly-informative webinar, expert faculty will use the “Deflategate” situation as a case study to provide companies of all shapes and sizes with practical tips, and proactive steps to avoid risks and costs once in reactive mode in eDiscovery.

• HOW would Tom Brady and the New England Patriots have fared if the NFL “Deflategate” investigation took place during a typical U.S. lawsuit’s discovery process?
• WHO creates and stores data encompassed by a company’s eDiscovery preservation, collection and production obligations?
• WHAT are the keys to implementing policies treading a middle ground between being Big-Brother/Sister and minimizing corporate risks?
• WHERE are the storage locations that present the greatest current challenges?
• WHY is “employee privacy” an oxymoron under U.S. law yet a basic civil right under European law?
• WHEN will the “IOT” (the “Internet of Things”) become the next great frontier in eDiscovery? 

Don’t be let Deflategate reach your docket. Tackle eDiscovery challenges today.

-WB

Avoid Talent Misalignment By Identifying These 3 Things

Talent misalignment can be one of a law firm’s most expensive mistakes.

The cost of an unanticipated associate departure is estimated at $200,000 to $400,000

Consider the following there employee archetypes and how to avoid a misalignment of talent and funds:

1. The talented employee that makes everybody else miserable.

You know that associate who attracts the most clients and bills the most hours, but who leaves everybody miserable in the meantime? There is always that one talented employee, who the firm would let go, if only he or she weren’t such a high performer.

Talent is valuable, but so is corporate culture and teamwork.

“The lone wolf archetype makes for a great western, but in today’s hyper-connected business world, that mindset just doesn’t work,” explains Chris Cancialosi at Forbes.

“You could have the smartest guy in the industry working for you, but if he can’t interact with the rest of your team, he’s ultimately a drain on morale and productivity.”

Of course, law firms can provide training and mentorship to difficult employees. Ensure that he or she understands the team is always worth more to the firm than any individual player. 

2. The talented employee who is bored.

There is also the scenario where your firm hires a talented associate, but lacks the workload to hold his or her long-term interest. Employees who are unfulfilled or bored at work will be the first to jump ship.

Check in with each of your associates to ensure they are busy with interesting cases. Pro-bono assignments are terrific for law firm marketing, but also for keeping employees engaged with their work and clients. 

3. The talented employee who has the wrong job role. 

Finally, associates have varying skill sets and expertise. Make sure you are tasking the right associate to the right job.

In fact, consider not tasking associates to cases at all. Instead, ask for volunteers. Typically, people are attune to their own strengths and weaknesses, and often talent will align itself in a more efficient manner than would managers.

By asking for volunteers, you will also get an idea of what cases (and clients) are most interesting. Ideally, this will properly align your talent to the cases and teams they prefer. A happy associate is more likely to stay employed with your firm.

With the demand for third, fourth and fifth-year associates rising, and the associate talent pool decreasing, successful firms must develop talent strategies that protect their human capital investment. 

Listen to The Center for Competitive Management’s information-packed webinar, “Essential Steps to Improve Associate Retention while Maintaining Firm Profitability Standards,” which explores how to give associates what they need while still preserving your firm’s business model, satisfying your clients, and maintaining profitability standards.

In 75 minutes, you will learn: 

• What drives associate satisfaction after the first year
• Why experienced associates leave, and where they go, and
• Why work-life balance matters, and how to create programs that accommodate attorneys without inconveniencing clients. 

The best law firm strategy is one that hires top talent, rewards teamwork, and prioritizes human capital. 

-WB

Photographer:

Rawpixel.com

 

Leadership vs. Management: The War You Didn’t Know You Were Waging

“Leadership and learning are indispensable to each other,” once said former U.S. President John F. Kennedy. And if the current U.S. President has his way, we may learn a lot more about JFK’s final days and wise words.

The deadline for releasing confidential documents about John F. Kennedy’s assassination is rapidly approaching, but Trump could still block the release of certain documents if he finds “an identifiable harm to the military defense, intelligence operations, law enforcement or conduct of foreign relations,” reports CNN.

If “the identifiable harm is of such gravity that it outweighs the public interest in disclosure,” then we may never know what secrets are held by The President John F. Kennedy Assassination Records Collection Act of 1992.

Less secret, however, are the leadership qualities of the 35^th U.S. President.

In fact, many people believe President John F. Kennedy was the nation’s most charismatic leader. If that’s so, should we be training law firm managers to emulate JFK’s mannerisms?

Not really. In fact, managers have almost nothing to do with world-class leaders; at least, this is according to one Harvard Business School professor.

John Kotter—Konosuke Matsushita Professor of Leadership, Emeritus at Harvard Business School and the Chief Innovation Officer at Kotter International, a firm that helps leaders accelerate strategy implementation in their organizations—explains three common mistakes we make when confusing leadership with management:

“Mistake #1: People use the terms “management” and “leadership” interchangeably. This shows that they don’t see the crucial difference between the two and the vital functions that each role plays.

Mistake #2: People use the term “leadership” to refer to the people at the very top of hierarchies. They then call the people in the layers below them in the organization “management.” And then all the rest are workers, specialists, and individual contributors. This is also a mistake and very misleading.

Mistake #3: People often think of “leadership” in terms of personality characteristics, usually as something they call charisma. Since few people have great charisma, this leads logically to the conclusion that few people can provide leadership, which gets us into increasing trouble,” (from “Management Is (Still) Not Leadership”).

So, what is management?

“Management is a set of well-known processes, like planning, budgeting, structuring jobs, staffing jobs, measuring performance and problem-solving, which help an organization to predictably do what it knows how to do well,” summarizes Kotter.

“Management helps you to produce products and services as you have promised, of consistent quality, on budget, day after day, week after week.”

Management is about operational or organizational success. Management results are tangible and measurable.

So, what is leadership?

“Leadership is entirely different. It is associated with taking an organization into the future, finding opportunities that are coming at it faster and faster and successfully exploiting those opportunities,” writes Kotter.

“Leadership is about vision, about people buying in, about empowerment and, most of all, about producing useful change.”

In the end, leadership may not be the same as management. If a law firm can only have one, successful management is something you can take to the bank.

But, in the ideal world, where the truth comes out and conspiracy theories are eventually put to rest, here’s to hoping your law firm gets both in its CEO.

Hail to the Chief (Chief Executive Officer, that is).

-WB

 

Legal Language & Long-Term Payoffs: The Beginning Of A Beautiful Friendship

The movie studio Warner Brothers and the comedians the Marx Brothers were once involved in particularly contentious exchange. The Marx Brothers planned to parody scenes from the classic film Casablanca. Warner Brothers, however, raised objections to the project. In a no-nonsense letter, Warner Brothers threatened severe legal action if the Marx Brothers continued as planned.

The Marx Brothers, for their turn, wrote a letter back to Warner Brothers, stating they “were brothers long before you were.” Although completely farcical, the Marx Brothers wrote that they would enforce ownership and control over the word brothers, as long as Warner Brothers maintained its stronghold on Casablanca.

This absurd exchange became legendary in movie circles, and represents a broader lesson about overbearing management [1].

“Fair use” clauses in copyright would likely protect the parody proposed by the Marx Brothers; nevertheless, even if Warner Brothers had a legal leg to stand on, was it worth it?

Money is a two-way valve that comes and goes. Reputation, on the other hand, is difficult to earn, easy to lose, and impossible to recover once lost

Casablanca went on to receive three Academy Awards, despite the fact that it was never expected to perform out of the ordinary [2]. It was the seventh highest grossing film in 1943. Today, it remains one of the most watched films of all time.

The exchange with the Marx Brothers turned Warner Brothers into Big Brother, aggressively enforcing policy and overseeing the “little people” in a menacing way.

Stewart McKelvey from Lexology warns, “While it’s true that cease and decist letters can have a strong deterrent effect on a rogue, if it is only a bluff without a solid legal foundation, the sender loses much credibility and the recipient capitalizes even more on the ‘culture jamming’ purpose of the satire or parody by waving around the ineffective cease and desist letter.”

The Marx Brothers’ ridiculous rendering of Casablanca could have served as a way to re-release a version of the film or increase legitimate viewership.

Law firms, for their part, should also learn to pick their battles.

Here are a few guidelines:

1. Employee benefits – avoid the revolt

Are employees calling in sick for work because you haven’t approved extra holiday time? Are employees disgruntled that they are not free to work from home one day a week, so that they can have lunch with their young children?

These are all small sacrifices to avoid grumbling and discontent among your staff. Consider bespoke benefits at your firm. A one-size fits all policy may work against your desire for a happier and more productive workforce.

2. Client discounts – don’t sweat the small stuff

Is your client arguing over a single line-item cost? Perhaps it’s for photocopying; maybe it is the fee for a phone consultation. Whatever the cost, if it’s small, don’t sweat it.

In the long term, if your clients feel that they are being heard, your firm will gain reputation and repeat business. In the moment, you may feel in the right (and maybe you are) but it’s decidedly wrong to fight over small incidentals when the choices for alternative legal services and rival law practices are vast.

3. Threating letters – watch your language

Watch out for adopting threatening language in your communications, from cease-and-desist letters to regular emails

Monica Sanders for LegalZoom explains, “Creating a negative mood will only lessen your chances of reaching an agreement. The idea of the letter is to show the other person you are serious and give them the chance to consider their legal choices. It is not an opportunity to insult them or create an adversarial relationship.”

Remember, in the digital age, whatever you put in writing lasts forever.

“If the dispute ends up in court, remember that the same judge who will hear your case will read your demand letter.”

If it’s not the judge, it’s possible even your own firm’s internal audits will revive a particularly nasty email you wrote, and it may be grounds for dismissal. In general, write everything as if it will be read one day by your boss, a judge, and your mother.

Need effective and persuasive legal writing guidance? Take C4CM’s audio course, “Essential Tips, Tricks & Techniques for Lawyers.” You will learn the ten most costly mistakes that lawyers make in written pleadings and briefs; quick editing tips and techniques to use every time you put your fingers to the keys; and language and style usage rules and real-life examples of how to use them.

-WB

[1] The story about Warner Brothers and the Marx Brothers comes from Lawrence Lessig’s book Free Culture. Read and download it for free here.

[2] Ebert, Roger (September 15, 1996). “Casablanca (1942)”. Chicago Sun-Times. Archived from the original on February 28, 2010. Retrieved March 18, 2010.

Work Better, Not Harder: Predictably Irrational Behavior & How Law Firms Can Avoid It

Imagine you locked your keys in your car. You call a locksmith to open your car door. An apprentice to the trade, the locksmith takes an hour or so to unlock the vehicle. Given it took one hour to complete this complicated and time-consuming process, you tip the locksmith on top of his normal fee.

Now, imagine the same thing happens again (perhaps you should loan a set of spare keys to a friend, but that’s beside the point). You call a locksmith to open your car door. An expert locksmith, she manages to unlock your vehicle in a mere 10 minutes. Having seemingly required minimal effort—and, after all, it only took 10 minutes—you pay the normal fee and do not tip for the service. In fact, for a short job, you are mildly outraged at the cost. 

This is the start of a story in an episode of NPR’s podcast Planet Money, which discusses the difference between hard work and good work, and people’s power of perception (listen to the rest of the episode “Hardwork is Irrelevant” here).

Economist Dan Ariely calls this predictably irrational.

In the locksmith tale, the first locksmith lacked the skills or experience to complete the job efficiently. And yet, he was rewarded for that inefficiency. The second locksmith, however, was highly skilled, and yet she did not receive the same compensation for her work as her less experienced counterpart.

Humans naturally see employees who work long hours as people with positive professional ethic and productivity. However, hard work does not always indicate skilled work. In fact, sometimes the less time spent on a task (fewer commands in a line of code; fewer distractions during the day), the more efficient and proficient that effort becomes.

As a law firm manager, this idea has two implications for your firm.

First, for clients, when your firm offers cheaper legal services, this can sometimes create the false signal that your firm is offering lower quality services. When a client is looking for the best representation, the client often associates “the best” with “the most expensive.” 

So, if you are hoping to attract clients with affordable services or competitive prices, consider offering a discount for those services instead. This way, the client perceives the counsel as high quality, and your firm is simultaneously able to avoid out-pricing its local customers.

Next, the idea that productivity and hard work are not necessarily correlated applies to law firm employees.

Law firms often measure an associate’s value to the firm in billable hours. And while it’s unlikely that firms will do away with this instrument for hiring, firing, and promotion, consider adding a goal-focused measure of success, as well.

During first- and second-year associate reviews, create a list of indicators for high-quality work that are not associated with time. For example, the number of court cases won, briefs written, clients brought in, repeat clients retained, tools developed, etc.

Talent for a trade, not just time, should be rewarded. 

End the era of hard work and begin the age of good work at your firm. 

For more productivity tips, consult The Center For Competitive Management (C4CM)’s webinars here.

-WB

Head Case: Why Managers Should Offer Personal Investment Education To Associates

Some people store money in their mattresses for a rainy day. Others, in savings accounts. Still some, in 14th century wooden Chinese sculptures.

It turns out, when the Australian auction house Mossgreen sent a 14^th century wooden Buddhist sculpture to be inspected, it found a little more than it bargained for—in fact, it found “one guan” or $2,000 to $4,000 more than it expected

Inside the sculpture of a Buddhist head, Ray Tregaskis, head of Asian art at Australia-based Mossgreen auction house, found a crumpled 700-year-old Ming Dynasty banknote. The banknote is among the earliest printed currency in China, and certainly a surprising way for its patron to have hidden his valuable IOU. 

China’s Ming Dynasty lasted from 1368 to 1644 and was a prosperous one. The bill itself contains three official red seals and warns of counterfeiting.

“It’s typical to find materials such as mantra rolls, relics, grains, incense and semi-precious stones that have been placed inside gilt bronze sculptures by a monk or lama,” says Luke Guan, a Mossgreen Asian art specialist to CNN.

“But we’ve never heard of anyone finding money inside a wooden sculpture before.”

An associate at a prosperous law firm, perhaps you are also dusting off your coffers, and looking for a place to appreciate your money.

But, poor investment decisions are among the biggest mistakes made by law firm associates today.

Because legal associates spend so long investing in themselves, via training and legal education, their careers start late in life. As a result, associates tend to be overly aggressive with personal investments.

Financiers make similar mistakes. In fact, in 2008, hedge fund manager Ted Seides made a $1 million bet with Warren Buffett regarding the benefits of aggressive hedge fund investments. Seides bet a portfolio of hedge funds would beat the more conservative S&P index fund over the next ten years. 

What happened? Buffett won. The S&P 500 is up 65.7%, well above the 21.9% gain of Seides’ hedge funds (via BigLawInvestor).

Warren Buffett, with a personal net worth of $80 billion (Forbes), has consistently advised steady and conservative monthly investments in a low-cost index fund. On page 20 of his 2013 letter to Berkshrire shareholders, Buffet advises:

“Put 10% of the cash in short-term government bonds and 90% in a very low-cost S&P 500 index fund. (I suggest Vanguard’s.) I believe the trust’s long-term results from this policy will be superior to those attained by most investors–whether pension funds, institutions or individuals–who employ high-fee managers.” 

As a law firm manager, it is important to educate your associates about smart financial decisions. Financial safety leads to better mental health. In high-stress work environments like the law, it is important for staff and associates to worry less about at-home investments to engage more in in-office activities.

In addition, by educating your firm about finances, this increases their skills in other areas of management.

Managers are the key to happier, more productive employees. And this can start with a little forward-looking advice on personal finance.

For more ideas about becoming a better manager and boosting employee satisfaction, consult one of the Center for Competitive Management (C4CM)’s online seminars and resources here.

You may think it’s for higher pay, but in reality, the No. 1 reason employees leave is the way they’re supervised.

Simply put…“People join companies, but leave managers.”

The good news is, regardless if you’re a new manager or a seasoned one, you can keep your great people on board (and happy) by learning the secrets to becoming a confident, effective leader through training.

Take a page from Buddhist sculptors—some of the most valuable things are stored in your head, not your wallet.

-WB.

Trimming Your Ranks: Netflix, Law Firms & Workforce Overcapacity

Should your firm be trimming its ranks?

According to a recent industry report, nearly 60 percent of the 356 law firm leaders said that overcapacity is hurting their firm’s profitability.

What’s worse, 62 percent stated that demand for their services has not yet reached pre-recession levels. While some firms are addressing the problem by trimming their ranks, many aren’t doing enough. Is yours? 

Law firms are not the only organizations to face a mismatch between the number of employees and productivity, especially after hard times. In fact, it may be hard to believe in today’s “Netflix and Chill” climate, but Netflix was on unsteady financial ground just a few years ago.

In 2011, the company decided to split into two, one for their traditional business model of DVD-by-mail and another for online video on-demand. After the announcement, Neflix lost 57 percent of their value in two months (HR). The market was betting against the company.

However, Netflix still managed to become the $61 billion company today and climbing into the list of top five most innovative companies (Forbes). 

Some people attribute Netflix’s success to its unique human resources business model and culture. 

On its website, Netflix explains:

“What is unique and special about Netflix is how much we:

• encourage independent decision-making by employees
• share information openly, broadly, and deliberately
• are extraordinarily candid with each other
• keep only our highly effective people
• avoid rules”

The key point here is the emphasis on people over process. Netflix highly values its most productive people. As a result, if an employee’s productivity or role at the company falls short, they have no problem firing them. In fact, Netflix strangely prides itself on its severance package (read its full statement about corporate culture here). 

“We model ourselves on being a team, not a family. A family is about unconditional love, despite your siblings’ unusual behavior. A dream team is about pushing yourself to be the best teammate you can be, caring intensely about your teammates, and knowing that you may not be on the team forever.” 

You may not be on the team forever, that much is true. Although Netflix does not abide by quotes, such as “cut the bottom 10% every year,” they do have continual performance evaluations, called “keeper tests.”

If you think “keeper tests” sound a lot like something out of the Hunger Games, you’re right. Masquerading around as the team mascot, “keeper tests” are simply a way to maintain a lean workforce. 

A lean workforce is vital, especially for law firms excessively penalized by the recession. However, Netflix culture may not be the best for your firm.

There are other ways to let supply meet demand, and your firm should educate itself on all its options. Yes, a “keeper test,” may not be a bad idea (although the name could certainly use an update). However, make sure your measurements for overcapacity address both the long- and short-term.

Although firing unproductive or unnecessary legal associates may be necessary, consider best practices for temporary workforce rebalancing. Associates may be willing to provisionally work part-time, as opposed to being outright fired. 

Incentivize associates of all ranks to bring in more clients. Include this as a measure of “success” on your own “keeper tests.” 

Netflix claims, “We do not seek to preserve our culture—we seek to improve it.” And that is certainly a mantra to adopt at any firm.

Learn more about corporate culture and workforce management with the Center for Competitive Management (C4CM)’s CLE webinar, “How Many Lawyers is Too Many Lawyers? Managing Firm Headcount, Capacity & People Power for Increased Profits.”

The CLE webinar presents key capacity metrics, discusses staffing arrangements, and presents a path your firm can follow to develop a more profit-driven model for managing people, practices and technology. 

Once you have managed your firm headcount appropriately, you will feel more free to Netflix and bill clients for higher profits.

-WB

Nobel Prize Given To Economist Who Explains How To “Nudge” Better Workplace Behaviour

For an economist, there is no greater acknowledgement of a job well done than the Nobel Prize in Economics. Today, a University of Chicago economist, Richard H. Thaler, claims that honour for his contributions in the psychology of economic decision-making.

Thaler’s theory explains, “how people simplify financial decision-making by creating separate accounts in their minds, focusing on the narrow impact of each individual decision rather than its overall effect,” according to the Royal Swedish Academy of Sciences.

Thaler is probably best known for his book Nudge: Improving Decisions About Health, Wealth and Happiness, written with Cass Sunstein, which was an instant international bestseller. In this book, the authors address two sides of the brain, “one that is intuitive and automatic, and another that is reflective and rational,” (Sunstein and Thaler, p.19).

These are the two sides of the brain that lead mathematicians to solve complex algebraic problems, yet get lost walking to the corner store. These are the two cognitive systems that lead talented artists to paint a masterpiece, but forget to eat dinner.

According to Sunstein and Thaler, the Automatic System, akin to a “gut reaction,” and the Reflective System, the more rational side of the brain, are to blame for inconsistencies in the behaviour of people when it comes to personal finances or decision-making, more generally.

This is why, for example, British employees are now automatically enrolled in the U.K. pension system. When given the choice, employees will opt out of the pension system, despite knowing deep-down that they need to save money for retirement.

In fact, the book Nudge has influenced a whole system of government policies in the U.K. Prime Minister David Cameron set up the Behavioural Insights Team, colloquially known as the Nudge Unit, to solve problems associated with these behavioural biases.

Another source of bias in economic behaviour concerns language. According to studies, people behave differently to the same commands, depending on the way these commands are phrased.

For example, it turns out that personalized text messages, as opposed to stock letters with generic language, led people to pay their fines on time when sent by The British Courts Service. While this experiment in behavioral economics was implemented locally, estimates suggest that a national rollout would save £3m per year in unpaid fines.

Basically, Thaler got a Nobel Prize for teaching people how to do the right thing.

This information is vital for any government, organisation, or leader of teams looking to improve performance or individual-level decision-making. 

If you are a law firm manager, can you help your employees make better decisions? According to now Nobel prize winner Thaler, yes, you can.

First, consider a firm-wide reading list:

• Nudge is not Thaler’s only book that can help reduce cognitive biases. Thaler also wrote Misbehaving: The Making of Behavioral Economics
• Dan Ariely has an interesting book titled Predictably Irrational: The Hidden Forces that Shape Our Decisions
• Kahneman’s work Thinking, Fast and Slow provides an accessible overview of the two systems of thinking
• Halpern discusses Thaler’s influence on policy in Inside the Nudge Unit: How small changes can make a big difference

Second, encourage two types of thinking, but make these types of thinking setting-specific. For example, the Automatic System or a person’s “gut reaction,” is ideal for situations of safety, human interaction, or creativity.

Encourage employees to blurt out ideas during a brainstorming session. Encourage employees to trust instinct when dealing with new clients or service providers. Definitely encourage gut reactions when it comes to safety at the office (does a package or person look suspicious? Don’t overly process your environment, just report it).

However, encourage the Reflective System in other situations where controlled effort, deductive reasoning, or rule-following is necessary. After a brain storming session, spend time mulling over the pros and cons of each idea. Encourage employees to spend 24 hours thinking about their response to an uncomfortable e-mail or situation before acting. 

Finally, adopt the “nudge technique” at the office, which means indirect encouragement, as opposed to strict enforcement. Here’s how it works.

Enforcement: You want employees to attend a weekly meeting on Monday morning. You send out a memo calling the meeting “mandatory” and take roll.
Nudge: You want employees to attend a weekly meeting on Monday morning. You provide coffee and breakfast.

Enforcement: You want employees to live a healthier lifestyle. You buy gym memberships for everyone.
Nudge: You want employees to live healthier lifestyles. You take the lead by taking the stairs.

Enforcement: You want employees to attend a series of training seminars. You assign a date and time for each person.
Nudge: You want employees to attend a series of training seminars. You make the training seminars a game, where people compete to win by attending or earn points or prizes that go toward extra work leave.

Enforcement does not provide a choice. Nudging employees allow people to choose and provides incentives for better choices.

Small encouragement can make a large impact in creating a positive and productive workplace.

-WB