Sunday, November 17, 2013

An Update on Milbank's Big Bet

Two years ago, when all other large law firms were slashing expenses to prop up partner profits, Milbank Tweed went in the opposite direction and invested heavily in an executive education program for midlevel associates. The program, called Milbank@Harvard, required all 4th, 5th, 6th, and 7th year associates to spend one week per year at Harvard University taking course work from HLS and HBS professors along with Milbank partners.  At the time, I wrote an in-depth analysis for the Am Law Daily. See Milbank's Big Bet, May 11, 2011.

In the video below, Bloomberg Law provides an update on the program via an interview with David Wolfson, the Milbank partner who oversees the firm's professional development programs.  Here are three takeaways from Lee Pacchia's interview with Wolfson:

  • Two years in and its a big success.  Law firms are innovating these days, but they don't always advertise what they are doing lest their failures become public or their successes get copied.  Why is Milbank talking about this very expensive program?  My best guess is that the firm's bet is paying off.  Thus, the firm is in an ideal position to use the program to differentiate itself in the minds of clients and prospective recruits, including laterals.  In short, this is the branding component of a longer term strategy.  To get his payoff, Milbank started three years ago and invested--back of the envelope calculation--$20 million, which amounts to $150,000 to $200,000 of forgone profits per equity partner. 
  • The skills gaps are primarily in business and leadership.  Wilson criticizes law schools for not doing more in this area, particularly in the collaboration and leadership areas.  But he also acknowledges that the biggest part of hard skills gap, financial literacy and acumen, requires learning in context.  At year four, the associates know what they don't know.  The original Cravath System was a lawyer development machine.  So is Milbank@Harvard, albeit the specifications have been updated.
  • The idea for Milbank@Harvard came from a German partner.  One of the many fruits of globalization is getting an outsider perspective on old problems.  Perhaps U.S. law firm partners are too embedded in the year-to-year AmLaw league tables to see and appreciate the power of a longer-term strategy based on aligning the needs of clients, partners, and associates.  That said, the American brain trust at Milbank was smart enough to listen their German partner.

The video:

In this book, Tomorrow's Lawyers, Richard Susskind predicts that the market for high-end bespoke legal services will consolidate to "20 global elites."  That said, 50 to 100 US and UK firms are hoping to make that cut.  This gradual winnowing process is what is causing all the groaning these days from millionaire BigLaw partners.

Milbank is one of the few firms, however, that is pursuing a unique, public strategy:  (a) attract, develop, and retain mid-level associates who know they need business training, (b) impress clients through improved value in the mid-level ranks, and (c) as I noted in the original Milbank's Big Bet essay, make Milbank the preferred recruitng grounds for in-house legal talent. 

To my mind, that is a compelling and likely winning strategy.

http://lawprofessors.typepad.com/legalwhiteboard/2013/11/an-update-on-milbanks-big-bet.html

Current events, Data on the profession, Innovations in law, Law Firms, New and Noteworthy | Permalink

Comments

Post a comment