The foundation of cooperation is not really trust, but the durability of the relationship. It is readily evident that firms which have grown through mergers and lateral (senior-level) hires always have less internal cooperation than those that have grown from within. As obvious as this may seem, this observation casts significant doubt on those firms … Read more

How do you get cooperation in an environment of autonomous units? Some basic principles about human nature may help here. The first rule I would offer is: Groups don’t cooperate, people do. An individual in one location might not feel much fervor in doing a favor for an individual in another location. But if he … Read more

In the previous chapter (The One-Firm Firm) I attempted to describe one (not the only) success model in running a professional firm. What I hope became clear in this description is that making this “collaborative” approach to practice work requires more than just an elusive “teamwork culture.” Rather, it is achieved by making some definitive … Read more

Working hard to involve non-partners in firm affairs and winning their commitment to the firm’s success is a hallmark of the one-firm firm and is reinforced by a widely common practice of sharing firm profits more deeply within the organization than is common at other firms. (The ratio between the highest paid and the lowest … Read more

Turnover at one-firm firms is clearly more carefully managed than it is among competitors. Those one-firm firms that do enforce an up-or-out system (McKinsey and Andersen) work actively to place their alumni in good positions, preferably with favored clients. McKinsey’s regular alumni reunions, a vivid demonstration of its success in breeding loyalty to the firm, … Read more

The characteristics of the one-firm firm system are institutional loyalty and group effort. In contrast to many of their (often successful) competitors who emphasize individual entrepreneurialism, autonomous profit centers, internal competition, and/or highly decentralized, independent activities, one-firm firms place great emphasis on firm-wide coordination of decision making, group identity, cooperative teamwork, and institutional commitment. Hewitt … Read more

The aristocratic model is applicable where strong leadership is crucial to the success of the organization and where the requisite skills for leadership can be readily defined and identified. However, it runs into problems when the standards of skill, wisdom, and virtue are unclear. Who, after all, is to judge the judges, and on what … Read more

This is an overreaction. In the professions, superior performance is evident only over an extended period of time, and should be so appraised. A given year’s compensation decision should be seen as one of a series, not as a game to be won or lost each year, with no view to past or future. Rapid … Read more

There are two ways to justify a seniority-based system: First, the senior partners’ past efforts have contributed to the firm’s current profitability, and second, their greater experience makes them more valuable to the firm now. Both are testable propositions, however, and should not be assumed to be true. Some partners’ past contributions may long ago … Read more