Eat what you kill?

See a discussion comparing the British way and the American way of doing business in law firms.

Yes, there are cultural differences. Perhaps the singular difference is the willingness to think as an “institution” (lockstep compensation) rather than as an “individual” (compensation based on origination). The former makes for longevity while the latter may make for for rapid growth in the short term.

Perhaps it takes the entrepreneurial spirit to get going. Then the challenge is to change that into a managerial spirit, something that proves very difficult, too difficult for most.

The really successful firms, only a few in number, find a way to do this.

“… To its critics, however, the firm’s way of doing things is precisely the problem. The firm’s insistence upon a system of lockstep compensation, in which partners are paid according to seniority, is widely regarded as the root of its partner retention difficulties in the United States. Most American law firms pay partners according to the amount of business they originate, the system known as “eat what you kill.”

Additionally, Clifford Chance’s massive size and far-flung nature supposedly confront American lawyers with conflicts and red tape not present at even the biggest U.S. firms.

It is easy to ascribe such difficulties to fundamental cultural differences and many of the firm’s detractors do. One ex-partner describes Clifford Chance’s approach as “socialist” and ill-suited to the supposedly more entrepreneurial and individualistic United States.

“In Europe, clients really do hire the firm,” he said. “In America, they hire the individual lawyers.”

The partner points out that, unlike most U.S. firms, Clifford Chance does not even keep track of which individual partners brought in what business. “Americans like to keep score,” he said.

Categorized in: Management