In 2015 Marci Eisenstein became the first woman managing partner of Schiff Hardin LLP, the Chicago-based firm that she joined straight out of law school, a post she has now held for four years and counting.
"I know that this is a firm where women had terrific opportunity," Eisenstein said. "I’m someone who walks the talk on that based on my experience here. It has been a great place to practice law, and a great place for me to develop and mature and get the terrific opportunities I’ve had."
Eisenstein spoke to Law360 recently to discuss the changing business of law, the challenges facing the legal industry and how Schiff Hardin works to distinguish itself in an increasingly competitive market. This conversation has been edited for length and clarity.
How do you think the legal industry is doing when it comes to diversity and inclusion?
I think that obviously we understand the legal business is really quite challenged in the advancement of women and everywhere — including here — we’re charted on a course of self-improvement. But I think one of the challenges that we’re facing in the industry is you’ve got to see it to believe it or imagine it. I don’t think that generally there is enough diversity in leadership roles, and that’s been a significant impediment. At Schiff, we’ve got a woman managing partner; we know there aren’t a lot of them in the AmLaw 200. And we’ve got women on the executive committee and in practice group leadership positions. Take our executive committee: Four of our seven members are diverse, two are women, two are minorities. One of those four also happens to be gay. So when the majority of the body that leads the firm presents a diverse profile, I think people are not only imagining the possibilities, they’re seeing the realities. And then the diversity of perspectives that we bring to our decisions and firm culture becomes part of everything we do; it becomes part of the fabric of our firm.
What have been the major priorities for your term as managing partner?
We’re facing a situation where really the business of law has become more competitive than it’s ever been before, and we are all having to earn the clients’ loyalty more every day by knowing their business and solving their problems from their perspective. At Schiff, we’re not trying to be all things to all people — we’re setting out to differentiate ourselves by growing our talent and building strength in key strategic areas of focus. For example, we’re quite heavily focused on serving the corporate and other business needs of the middle market. We have a marquee private clients and estates planning practice, which we are growing. Some of our competitors view that as really an accommodation business. We have a first-class internal investigations practice. We have a terrific marquee environmental practice. There are others, but we are focused on really building on those strengths. We are an independent firm. Our partners are owners of the firm, and they act like it, and they need to act like it to move us forward.
You said the business of law is more competitive. What are the main drivers of that?
I think the role of lawyers is changing with the onslaught of technology automation and artificial intelligence. A lot of the work that lawyers used to do has become automated. An obvious example is computer-assisted document review. Now, there’s a lot of opportunity there, because automation gives us the opportunity to act as counselors and to use our judgment and experience and expertise to really provide cutting-edge services to our clients. But it’s also challenging in this environment to get younger lawyers the experience they need to mature to the level that they can be those kinds of advisers. Another related dimension of the challenge posed by technology is how firms can use technology and manage their lawyers’ information so as to really harness the firm’s intellectual property. The bottom line is the clients are more sophisticated and they expect higher-level thinking from us than ever before, and they also have demand for greater efficiencies than ever before.
The environment of increasing law firm consolidation poses challenges for a midsize national firm like ours to differentiate ourselves and our brand. We understand that our larger competitors have, for example, more resources to spend on marketing, but we offer the advantage of having really talented lawyers, who we know and can vouch for, who are and act like owners of the firm and who we can efficiently put together to create the client-focused teams that our clients are looking for. That issue of differentiation is an important one. And then the talent issue: recruiting and retaining the best talent is becoming increasingly challenging in this environment.
We’re all competing for largely overlapping talent. And so we have to differentiate ourselves, not only with the clients, but to attract lawyers. What we are offering here is an environment where we count on every person to be engaged and committed to the firm, and the lawyers who join us and succeed are excited and energized by the opportunity to have that kind of engagement. And of course, retention is also a major challenge for every firm — us, and I’m sure, every firm out there in an environment where people at all levels now, junior and senior, are seeing alternatives and options, and seizing them far more than they did when I was growing up as a younger lawyer, to be sure.
Do you think mergers are a good way for law firms to grow?
First, I need to say I’ve never been through a true merger. I’m certainly well aware of the fact that a number of firms are responding to market changes by creating service behemoths through mergers and combinations. Schiff is charting a different course and it’s one of independence. We’re setting out to strategically invest in areas where we’re already strong, and we’re not interested in growing simply for growth’s sake. We are focused on adding the right people and the right practices to our firm, who are excited at the idea of operating from an independent platform — where the partners really are the owners. So that’s where we are in all of this. I think that from my observation, mergers are driven by the optimistic hope that scale is going to improve the quality of the firm, and in some cases, solve the problems a firm might be facing that it either cannot or is unwilling to address on its own. Sometimes that works, but sometimes it doesn’t. As is true with law firm management generally, for mergers to succeed, there needs to be a strategy and a disciplined execution of the strategy. People hope one and one will make three, but sometimes one and one make one-and-a-half in this area. I think when you’re making a lateral acquisition of any kind, there needs to be strategic and cultural fit. And I know that’s what we’re looking for when we make our own acquisitions of lateral talent.
Do you think the billable hour is on the way out?
I think the billable hour still remains what the vast majority of clients are expecting. We here at Schiff offer alternative fee arrangements, and we’re continuously coming up with creative and responsive approaches to pricing. But the bottom line, I think, is that the demise of the billable hour — those stories have been greatly exaggerated. Most of our clients say they want a billable hour — they may want a blended hour, or a discounted hour or they may want it subject to a fee cap — but they’re generally looking at an hourly measure. And we also find that even when the bill is based on something else, like a fixed fee, clients are still comparing the efficiency of that arrangement against the metric of an hour.
Do you think that outside investment in U.S. law firms will happen, and should it?
I really don’t see it in the cards. I especially don’t see it in the cards for a midsize national firm like ours. We’re a place where the partners are owners of the firm. For our business to succeed, we really want, need and expect our partners to be owners and to act like owners. So our focus here is on keeping the partnership strong and adapting our business to serve our clients and attract high-caliber talent. And we think we can continue to best do that by the lawyers owning the firm.
How do you think the firm will change in the next 5 to 10 years?
We are charted on a course of independence. We are looking at strategic growth but we are looking at attracting the right people, people who are excited by our platform and adding them to strengthen our firm in its areas of focus. I think there’s a real sweet spot for a firm like ours in the market. We are different from many of our very large competitors. We really do know one another. We really can put together in a very efficient way the teams that our clients need to solve their problems. And I see us continuing to head down that path and continuing to differentiate ourselves in that way.
What does it take to make a good law firm leader?
I think you need to be trusted by your colleagues even at times when they might disagree with you, and you need to build that trust by being yourself, by being authentic, by listening and communicating. And it’s absolutely a two-way street. Resilience is key. There’s going to be along the way setbacks and obstacles, that’s just the nature of it all. And you’ve got to be resilient. After listening, I think you’ve got to be willing to decide and take action, but also flexible enough and self-reflective enough to acknowledge when something isn’t working and make changes to fix or address that.
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This article is reprinted with permission from Law360, November 26, 2018, www.Law360.com.