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Why a Partnership may Not be the Best Model for a Law Firm

19/1/2011

2 Comments

 
As you may know from reading some other articles in this blawg, I'm not a great fan of Partnerships.

Let me qualify that by saying, I'm not a great fan of partnerships where they involve more than say, 5 people.


I never really knew why, but for me there was always something sluggish about using a partnership as a way to conduct a modern business – and despite the incessant carping of some older lawyers, a law firm IS a business.

Using a partnership model seems to delay decision making akin to wading through treacle.

Anyway, I came across a story about the old proverb, Too Many Cooks Spoil the Broth.  The short story was in an old Reader's Digest that I was flicking through whilst sitting in the Dentist's waiting room. 

I don't have the date of the article as I left the magazine behind and it was only after a few days that things began to gel for me.

The story was about a murder that took place in New York in 1964.

The gist of the story is this: on 13th March 1964 a young woman called Kitty Genovese was walking back to her flat in Queens, a borough of New York City, when she was attacked and stabbed by a total stranger. 

She managed to break away and scream for help but the attacker came after her and attacked her again and stabbed her to death.

The whole attack allegedly took 30 minutes.

Two weeks later on 27th March the New York Times printed an article describing how a large number (apparently as many as 38) of respectable, law-abiding citizens had seen this attack and done nothing about it. 

No one had called the police and on investigation, the police were unable to understand why so many witnesses had done so little.

The story was picked up by other journalists and of course grew arms and legs and the conclusion was that people no longer cared enough to get involved and was a damning indictment of modern society and an example that society was breaking down etc etc proper Daily Mail stuff.

However, when I searched online to remind myself of the details of the murder, I simply searched under the name "Kitty Genovese" and up popped lots of links referring to what psychologists call The Bystander Effect but is also known as Genovese Syndrome.

The Bystander Effect is a psychological phenomenon that refers to cases where individuals do not offer help in an emergency situation when other people are present.

The probability of help has in the past been thought to be inversely related to the number of bystanders; in other words, the greater the number of bystanders, the less likely it is that any one of them will help.

In the last 30 years or so there have been numerous experiments to demonstrate the Bystander Effect in a variety of settings and the conclusion is nearly always the same; the more people there are, the less likely it is that the victim will get help.

So how does this impact on how a partnership works?

Well, with the information provided so far, it doesn't.  But after a little bit of digging into some other aspects of the Bystander Effect, you might begin to agree with me.

There are many reasons why bystanders don't react to emergency situations, but social psychologists have identified two major factors;

(1)     The principle of social influence; and

(2)     Diffusion of responsibility

Social influence is when people monitor the reactions of other people and where they work out in their minds if it's necessary for them to do something or nothing. 

Since most people do nothing, the conclusion is that it's better to do nothing.  Psychologists call this "social proof" or more imaginatively "pluralistic ignorance".

Diffusion of responsibility is where everyone assumes that someone else will intervene.  There is a hierarchy effect where people think that someone more suitable or better qualified (in their minds) will act or intervene.

And as someone else is probably going to step in then there's no reason to do so. Feeling less responsible means that they can refrain from acting.

Other obstacles to acting – bear in mind that this all happens in a split second in a bystander's mind – is that there are inherent fears;

The fear that someone better qualified might appear and therefore acting quickly could cause them to lose face.

They may also be afraid of being superseded by a superior helper, offering unwanted assistance, or facing the legal consequences of offering inferior and possibly dangerous assistance.

Out of all of that, the phrase I like best is "pluralistic ignorance".

In pluralistic ignorance, people privately disdain but publicly support a norm or a certain belief, while the false consensus effect causes people to wrongly assume that most people think like them, while in reality most people do not think like them and only on rare occasions will they express their disagreement openly.

Thus no one may take any action, even though some people privately think that they should do something.

When I talk to a number of partners of law firms, quite a lot of them say that they would prefer changing to a Limited Liability Company but they think that the other partners would disagree.

The reality is that they could all be struck by pluralistic ignorance.

2 Comments

    Author

    After many years paying lawyers,I became one in 2005 Just in time for the largest upheaval in the law since records began. Brilliant. Exiting times ahead.

    Disclaimer.  The thoughts, ideas and comments on this Blawg ("Blawg - a legal Blog) are my own and not to be confused (unless otherwise stated) with anyone else and certainly not of anyone in the Firm where I used to work and they are not the views of the firm where I used to work.

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