In our firm “Schweiger & Partners”, the company structure is essential to us.

However, that is only an afterthought for many law firms, who blindly function in conventional ways. By default, humans tend to follow strict linear hierarchies. This is because we have been trained that way all our lives, by our schools, our jobs, and our governments. So we assume that it is the only way to do things.

But the traditional way of doing things is not only bad for business. It is also bad for company culture. Here is why.

 

Traditional “Kings” and Their Linear, Top-Down Hierarchy

In most law firms (and most smaller companies), there will be a “king”, who is the person in charge, and usually the owner of the firm. There will be specific people that take care of very defined aspects of HR, IT, Operations, Finance, etc, who handle specific problems. For example, you will find people that do the purchasing of copy machine paper, hiring of cleaners and handle the accounts payables. Others regularly file trademark applications, they do the incoming mail, and they look after the office keys. And so on. That works well as long as there are only recurring matters and no new problems.

What usually happens is this: Kings are the sole decision-makers, creating bottlenecks for incoming new problems. When a new problem – an unknown matter – comes in, the king decides whether he should solve it himself, and he keeps the problem, or whether he delegates it to a person that appears to be competent and willing to solve it. This works fairly well for standard problems, in a small organization, with a competent king. But if the king gets busy, or if the problem is too complex to just delegate it to someone, then it does not get solved at all. The problem sits in the king´s lap until it finally needs to be solved because it would create damages if not solved immediately. And sometimes these problems do create damages.

In such a company culture, if there are 2 or more kings, they will inevitably each create their own private sub-kingdoms. As the company grows, there must be more kings to handle incoming new problems. In a law firm, potential kings can be lawyers who bring in new clients or the heads of large departments. In any case, linear hierarchies will naturally develop. King 1 will prefer to delegate to his own friends and subordinates. He may not like the Operations guys who work for King 2, so he creates his own ‘shadow’ Operations team under himself. Because as a King, he has the power to do so. Basically, the more kings there are, the more subkingdoms there will be.

Thus, silos will form. Over time, the various kings will come to some agreement (usually tacitly) about the boundaries of their kingdoms. A Finance king may only want to deal with money matters; a client-facing Operations king may only want to deal with clients.

And the worst is this: problems that do not belong to a single king will fall between the cracks. What if, say, a cunning client disputes the billing for an ongoing patent application (a finance problem), while demanding that his patents are filed faster (an operations problem), and simultaneously kicking up a fuss about data protection (an IT or administration problem)?

This mechanism has many parts. One of the worst things happens when responsibilities overlap between kingdoms: short but fierce skirmishes between kings can occur. King 1 will ultimately not want to quarrel with King 2 because there are enough other and more worthwhile matters to attend to. And why the hassle of fighting with someone who might be your best drinking buddy at the next law firm retreat? Both King 1 and King 2 will realize that and then withdraw and let the rest fall into the cracks. And in the future, both kings will not attend at all to the same type of problem. When all kings behave the same way, it so happens that essential work does not get done. That can determine the difference between survival and failure of the firm in the next recession.

The result of a “kings” company structure is a negative feedback loop:

• Conflict between kingdoms. Because nobody wants to handle things outside their responsibility.
• Silo-ed problems don’t get solved. In fact, they stay in their cracks for a long time, until some actual emergency (which requires firefighting).
• Staff get disempowered. Because why bother? Your king decides everything and tells you what to do. Initiative is not rewarded.
• And company culture starts to rot. Which brings us back to Step 1 and the cycle repeats.

Just to anticipate my message below, at a modern, knowledge-based services company like our firm, new problems will also tend to land in grey zones. But these problems will undergo multi-department coordination, which is difficult if we are set up as a linear hierarchy.

 

Lawyers Are Difficult People to Work With

This divisive king-centred approach is everywhere. But specifically, lawyers and their personalities can make it worse:

Lawyers are difficult people to work with, because they have a special mix of high egos and arrogance that makes them successful at what they do.

They naturally like to form little kingdoms, because they like glorifying themselves through their work. They like to be in charge.

They also like working long hours (to bill more hours to their clients). But they also expect the same long work hours from their support staff.

In our experience, this is why the “kings” structure works so poorly for law firms. And it is also the reason why many law firms cannot scale their business, and cannot adapt to the modern world of work. Nor can they attract quality employees and keep them happy.

 

“Teams” and a Multi-Role, Flat Hierarchy

At our firm Schweiger and Partners, we choose to actively and consciously implement a “teams” company structure:

Each main area (HR, Operations, etc) has a team leader. There will be a clearly defined, standardized list of problems that each team typically handles.

Large teams have sub-teams to handle specific problem areas. For example, our Operations department can be split into patents and trademarks, among others. These sub-teams will each have their own team leader.

Roles are both well-defined and empowered. The CEO sits on top, is responsible for the overall KPIs of the firm, and makes sure that big problems go in the right direction. The individual team leaders have the power to take care of recurring problems that clearly fall into their areas of responsibility and they have a budget to do so. They also set KPIs for their team members and manage them. They send the problems to their relevant team members (we call them “engineers” or “technicians”) who will do the actual work.

So far none of this is revolutionary. But what differentiates the “teams” structure is this:

1. there is a general alignment via “all-hands” meetings. Complex new problems are brought to our daily short morning meetings that only seldom last longer than 5 minutes, where team leaders gather to clarify which team is responsible for a new problem – without in-depth discussion of the problem. That is similar to a “first parade” in the military, everyone is there. The respective team leaders later decide who does what within their teams. So all-hands meetings are not actually for solving the problem, but only for shifting it to the actual responsible team. In fact, these are big picture gatherings—we discuss where we want to go as a company, and set common goals so that all teams are aligned in the same direction.

2. Everyone can wear multiple hats. Team leaders are “managers”—they set KPIs and look after their team members. These team members are “engineers”—the people who do the work. Actually, just about everyone functions as some sort of engineer (even our CEO is a patent engineer, as well as a marketing/CRM engineer). This means that our managers have hands-on experience doing the work, and our engineers are able to effectively feedback and affect decisions.

3. A culture of individual initiative. Some cultures value ‘face time’ and require everyone to show up for every meeting. To us, this is a waste of resources. Every meeting will have an agenda. Your job is to look at it and ask yourself two questions, “Is this relevant to me?” and “Can I contribute?” If either question is yes, you should be in the meeting. If not, you can stay away (but please inform us just in case). We value your initiative; we want you to be responsible for your decisions, and expect you to take ownership of your work.

4. Leveraging on collaboration tools. Our company—with an international team working remotely on flexible hours—could not function without collaborative software. We coordinate tasks and meeting agendas with Asana, and chat on WhatsApp. We use Microsoft Teams and Sharepoint, among others, to bring everyone together in a shared workspace.

 

A Positive Feedback Loop

As a result, we set up a positive feedback loop (similar to the Flywheel Effect in my previous article, click here):

• Problems are promptly dealt with. Complex grey area problems are identified and coordinated during all-hands meetings. We do not delay them and let cracks form.
  Clarity brings empowerment. People understand their own function, and how it fits into the bigger picture. With minimal conflict, they know how they can contribute, as both worker and leader.
• People take ownership. They start to feel confident, because they get to do what they are good at. They have the power of choice. They are involved, not passive.
• Replaceability means robustness. Multiple hats means that even if someone is sick or quits, the system does not break down, because others can take over. Potential damage is minimized, making the company robust and able to take risks.
• Company culture thrives in a self-sustaining system. Which brings us back to Step 1, because great company culture makes for better problem-solving.

What we have described above is a flat hierarchy—the idea and its practical execution. You will see many companies talk about this concept, but they do not actually explain what it means or how it actually works. They just pay lip service to the idea, and it forever remains some useless management buzzword.

But at Schweiger & Partners, we actually do it.

This is Part 2 of an article series on Company Culture. Part 1 is here. In Part 3, we will identify our unique selling proposition, and how self-knowledge helps us to thrive in these competitive times.

 

Martin “Teams” Schweiger