You Can Never Be Too Thin, Too Rich, or Too Well-Educated

If you believe that the merger wave is far from cresting and that the future promises a landscape of perhaps two or three dozen truly international mega-firms with revenues north of  $1-billion/year—but you're currently at less than half that level—how might you get there from here?

Reed-Smith's answer is "Reed Smith University," a collaborative effort with the Wharton School at the University of Pennsylvania.  Patterned on executive-education programs commonplace in corporate America, the plan calls for five different schools: leadership, business development, technology, professional support and law.  Interestingly, only the "leadership" division will primarily be taught by Wharton professors; faculty for the other four schools will be Reed-Smith partners themselves, albeit under the tutelage of Wharton.  Fine, say you, but no big deal?  Haven't law firms been doing professional development since the days of apprenticeship?

Not remotely like this, say I.  "RSU" is not an ad hoc response to junior partners behaving awkwardly when it comes to client development, far less to technophobic lawyers confronted with the mandate to get seriously on board with everything from KM to CRM to Blackberry's.  Instead, I read it as a thoughtful, long-term, and serious ($500,000/year in baseline operating expenses) commitment to change the firm's managerial culture.  Over time, the focus will shift to the truly strategic questions management is entrusted and empowered to address:

• are we investing in the right practice areas?
• are we investing in the right industries?
• is our geographic footprint rational given macroeconomic trends? (Reed-Smith, recall, hails from Pittsburgh:  Not the most often mentioned home base for hyper-growth and innovation in the 21st Century.)
• are we focused on developing the optimal client base?
• by the time they're up for partner, have our associates developed the panoply of skills they will need?
• etc.

According to Reed-Smith partners Michael Pollack ("dean" of the leadership school) and John Smith III ("chancellor" of RSU):

"One of the most immediate things I think that we'll be able to see and feel, even if it's not completely subject to scientific measurement, is how much less time senior management is needed for some of the day-to-day business decisions that get made in the firm," he says. "As people gain confidence and improve their skills and their ability to take ownership of problems and make decisions, that will allow the senior management to focus on bigger problems and bigger issues and bigger opportunities."

Smith and Pollack both suggest that RSU's value will be recognized as they see improvement in the way the firm's practice groups are managed.

Note that last prediction closely:  Improvement in the way the firm's practice groups are managed.  I am becoming an increasingly vocal proponent of the position that the proper "scale" for analysis of a firm's strategic and financial performance is the scale of the practice group.  "The firm" is too large a scale, and "the partner" is too small a scale, and both are subject to exogenous vicissitudes not under their control.

But the astute management of a practice group, over time, will show its true colors.  Now,  how long before competitors adopt Reed-Smith's forward thinking?