In a recent interview with The Practice, Cesar L. Alvarez, a co-chairman of Greenberg Traurig, discussed his views on teamwork and collaboration within law firms. Alvarez previously served as Greenberg’s executive chairman for more than three years and as its chief executive officer for 13 years. During his tenure as CEO, he directed the firm’s growth from 325 lawyers in eight offices to approximately 1,850 attorneys and government professionals in more than 36 locations in the United States, Europe, Asia and Latin America.
What does teamwork and collaboration mean to you? What has it meant to you as the leader of a major international law firm, Greenberg Traurig?
Teamwork and collaboration is really a strategy to be able to serve clients in today’s environment. As you know, the complexity of the legal system that we operate in, and the velocity with which you have to provide legal advice to clients, requires that lawyers employ some sort of strategy to be able to deliver specialized service at speeds faster than ever before. I used to be a securities lawyer of a client who once called me at one o’clock in the afternoon saying, “Look, our stock dropped 40 percent. There’s no reason for it. I just got a call from the New York Stock Exchange, and they’re going to stop trading. They want us to put out a press release. What do I do?” When you get that type of call, it’s not really a good time for you to say, “What an interesting question. We’re going to research it and get back to you as soon as we can with an answer.” Either you have to know the answer yourself or you have to reach out to one of your colleagues who knows the exact answer and is willing to collaborate with you. That, in and of itself, requires that the most successful firms either be large enough to have experts across a broad range of practice areas such that they can provide real-time answers through teamwork and collaboration or be very specialized and niche.
Moreover, today when you have a major matter, you need to put a diversity of practice areas together to solve the problem for the client. If you don’t have a culture of teamwork and collaboration, you can’t put these teams together and have the client benefit from them. In our case, we also have the issue of having 39 offices, so the ability to connect all of them to serve a client requires a strong culture and commitment to teamwork. When you call the San Francisco office, there has to be people there willing to collaborate with the Miami folks on a matter that is important to Greenberg clients.
When you have a major matter, you need to put a diversity of practice areas together to solve the problem. If you don’t have a culture of teamwork and collaboration, you can’t put these teams together and have the client benefit from them.
Collaboration also needs to be incentivized and celebrated. You have to align financial incentives so people believe that it is worthwhile for them—and we do. But you also have to do other things to create a collaboration environment—to create trust among all the lawyers.
With large, international law firms, it is arguably harder to reach out and refer matters to your partners, simply because you may not know them well. Is that true in your experience? What can firms do to deal with the challenge of having a large, dispersed partnership?
For the partner who has responsibility for a client, in order to be willing to collaborate, he or she needs to trust the people on the team, because if they do a poor job for the client, he or she may lose the client. So you do need to know your partners as well as you can.
Now, I hear what you’re saying, “Well, how do you do that in a firm of 1,800 or 1,900 lawyers all over the United States and the world?” You don’t need to know all 1,800 or 1,900 lawyers. You need to know probably 50 of them throughout the firm who can provide you with a “Good Housekeeping Seal of Approval.” If I needed something to be done in New York, it’s really helpful if I know a partner there whom I have faith in, whom I know from work on other business, and whom I know personally. It’s important that he or she also knows something about me and the kind of person I am. Why? Because I can call him or her in New York and say, “Look, I have this issue or I have this problem. Who should I use and why?” That person could then give me the Good Housekeeping Seal of Approval for whomever I needed in the New York office. So in this sense, it’s about creating a network.
We also frequently have retreats where our lawyers come in from around the world and spend two or three days talking to each other and getting to know each other. This is critical because, for me, you don’t collaborate and you don’t refer matters to other people unless you can either get a Good Housekeeping Seal of Approval from somebody with whom you have a personal relationship or take the time to build direct, personal relationships with a diversity of colleagues. At Greenberg, we spend a lot of time and money creating opportunities for our lawyers to get to know each other. There’s no substitute for this. People generally won’t collaborate solely because of financial incentives. They need to trust their colleagues.
Is there, at some point, a size where collaboration becomes a threat to the firm?
People generally won’t collaborate solely because of financial incentives. They need to trust their colleagues.
I don’t think so. There are certain reasons that size becomes an issue, such as conflicts. Conflicts are one of the reasons that some of the larger firms use the verein structure. They’re really not a traditional law firm at all, as the conflicts don’t really apply the same way. As you know, conflict rules originated many years ago when there were five or 10 lawyers in a city. Those rules are not very applicable to the way that lawyers practice today—but we have to abide by them nevertheless. Conflicts are one issue that prevents you from having an unlimited size. Another thing that affects size is the ability to get outside financing for law firms. It’s not as if I can go to Wall Street and say, “Can you give me a half a billion dollars’ worth of capital, and I’m going to grow this business?” As a profession, we can’t do that. We put in our own capital to grow. That itself is a limitation. So there are limits to size. That being said, I don’t believe that the ability to have teamwork or collaboration has a size limit. Of course, the bigger you get, the harder you have to work to create opportunities for lawyers to meet and know each other and to build a consolidated culture in which teamwork and collaboration are valued.
In your experiences, how important is diversity—for instance, with respect to gender—to effective team building?
Women and diverse lawyers add a lot to teams for many reasons: different points of view, different sensitivities and different ways of approaching an issue or a problem. The more diverse the teams that you put together, in my experience, the better the collaboration you get and the happier the client. At Greenberg, we have a lot of women, Hispanics, blacks and other lawyers who add a lot to our practice.
Would you say that there’s been a cultural shift among leaders and management in the way we see teamwork? Are younger generations more inclined to work together in ways that folks were not years ago?
As the world got smaller and the need for immediate responses became critical, the strategy of collaboration and teamwork is a natural response to be able to deliver immediate services to clients.
Yes. The world has become more complex, and information technology has provided us with the ability for instantaneous response to clients. Younger generations are used to operating in this realm. When I started practicing law, it was not so much about teamwork. It was about what were you doing: how many hours were you billing and how best could you represent your client. As the world got smaller and the need for immediate responses became critical, the strategy of collaboration and teamwork was and continues to be a natural response to be able to deliver immediate services to clients. Younger generations grew up in this new environment.
Law firms often attempt what is known as “cross-selling.” How does this relate to collaboration? Doesn’t it present its own challenges?
I think that the way lawyers are able to cross-sell to a client is based on the trust that you have with the client. If you’re “only a lawyer” to that client, cross-selling becomes much more difficult. To the extent that you are their advisor and lawyer—to the extent that they view you as somebody who understands their business and whom they can trust with information—cross-selling becomes a lot easier. Truth be told, it is very difficult to cross-sell when you don’t have a relationship with the client and you don’t understand their business. This is one of the big things that I stress to lawyers: you have to understand your client’s business. You’ve got to understand how it works; what the business model is; what things are important to them; what’s not important to them. And you’ve got to develop a personal trust. You’ve got to build up that level of trust. You can’t just go there and start being the salesman who brings out the briefcase with the 25 things you can sell to them. Effective cross-selling requires a relationship and the trust of the client.
When you’re looking at hiring lawyers, whether a single lateral hire or potentially a whole firm through a merger, how important is culture?
The most important part of any new hire is whether we think that they’re going to be able to function within the culture of Greenberg Traurig. We have extensive discussions about our culture with anyone considering joining our firm. One of the things that has helped us achieve a culture of teamwork is that collaboration is celebrated and all of our policies and systems are “collaboration friendly.” One of the biggest negatives to collaboration is when firms have systems and policies that knowingly or unknowingly pit lawyers against each other and where there are clear winners and losers. That is not a culture conducive to real collaboration.
If you pit lawyers against each other, there are winners and losers and you’re going to decrease collaboration. That is a fact of life.
I’ll give you the best example of a system where there are visible winners or losers, and therefore lawyers tend to get pitted against each other: an open compensation system. Why does this create tension? Because everybody knows what the other person is making. All of a sudden, particularly in large firms with a large network of offices, there’s a lawyer in Miami looking at some lawyer in L.A. making more money thinking, “I dealt with that lawyer, and he’s not really that good, and he makes more money than I do?” That sentiment doesn’t engender collaboration. It doesn’t make you want to pick up the phone and call that person if you have an issue. So, when you add together a lot of these interactions, you begin to have a firm that is not geared toward collaboration.
Another system that many law firms have, and it is important in a compensation system, is who originates a piece of business. Many firms have a system that if two or more partners believe that they are the originators of the business, they go in front of a committee of the law firm to determine whether partner A or partner B originated the business. I can tell you that if you and I went in front of enough of these committees arguing about the client that we brought in, you and I are not going to collaborate with each other. It’s as simple as that. If you pit lawyers against each other, there are winners and losers and you’re going to decrease collaboration. That is a fact of life.
At Greenberg Traurig we try to look at every aspect of the systems we have in place and avoid those that create visible winners and losers. The less pitting against each other that you have, and the less public you make who the winners and losers are, the better chance you have, in my opinion, of creating a highly collaborative law firm.
Cesar L. Alvarez is a co-chairman of Greenberg Traurig.