Editor’s Note: The author of this article is a scholar at Harvard Law School who is writing a book about the legal profession. This article is the first of a three-part series and serves as the foundation for a chapter in her forthcoming book.
By Heidi Gardner, Distinguished Scholar, Harvard Law School Center on the Legal Profession
Rainmakers inspire a certain degree of awe from their peers. Most partners recognize that the way the biggest rainmakers build an enormous portfolio is by generating work and referring it to others – a specific kind of collaboration. But in our research, we find that lawyers who observed strong collaborators often see the process as somewhat mysterious. They don’t understand how “mere mortals like me” (one lawyer’s actual words) could achieve such greatness.
This post starts to demystify rainmakers’ collaboration – first by acknowledging some of the common myths, then by digging into our data to check how they stand up to reality. In the coming weeks, our future posts will focus on empirical findings about the real barriers to collaboration – both for novices and highly experienced rainmakers – and lay out some ways to overcome them. One caveat: our research is ongoing. What we’re sharing here is the latest thinking, but it will certainly not be the final word. We’re counting on your critiques to hone the ideas – comments welcome!
Rainmaker myths: When pressed to explain extraordinary rainmakers’ success, lawyers we interview often resort to one of three kinds of myths. First, the Hero Myth chalks up collaborative success to the rainmaker’s characteristics like inimitable charm and charisma, peerless intelligence, and superhuman stamina that attract both clients and loyal teams. Alternatively, the Midas Myth suggests that successful collaborators have been granted extraordinary gold-generating powers by the powerful gods – as in, they inherited an institutional client that produced endless riches by demanding huge teams. Third, in the Myth of Serendipity, rainmakers are like the ancient princes of Serendip who made wonderful discoveries through sheer happenstance.
Such tales suggest an almost magical confluence of events, timing, clients, and market conditions that allowed a rainmaker to launch accounts with huge teams. As with myths in the classical sense, partners use these stories to explain ambiguous situations that are otherwise difficult to understand – namely, the way that rainmakers fuel growth by building and deploying broad client teams. Our research suggests that each myth has a grain of truth, but the reality is much grittier – and therefore, doesn’t require magic or god-like interventions.
The compensation explanation: Speaking of gods brings us to the topic of the almighty remuneration committee. In our inaugural post in this series on lawyer collaboration, we showed empirical evidence on the benefits of collaboration: serving clients with integrated, cross-practice offerings typically promises more lucrative, stickier clients. Almost inevitably, this topic raised another explanation for rainmakers’ willingness to bear the costs and risks of handing off work when they could instead get credit for hoarding it: surely there must be a straight link between collaboration and a firm’s compensation system, right? Not quite, we find.
Granted, a firm’s compensation system plays a large part in shaping partners’ behavior, and probably explains why some firms are, on average, more collaborative than others. To accurately analyze the effects of different compensation systems across firms – for example, how much more collaborative is a lock-step versus merit-based firm – we would need timesheet, personnel, and financial data from about 60 or more firms. So far, that’s beyond our reach.
But this compensation explanation can’t account for the difference in collaboration between partners in the same firm, where they’re all (presumably) subject to the same remuneration system. In fact, so far in our research at Harvard Law School’s Center on the Legal Profession we find that every firm has a wide array of collaboration: both in terms of rainmakers who refer work to others, and partners on the receiving end of those referrals.
The chart below illustrates one typical firm, where a third of the people referred work to other partners fewer than ten times during the course of our study (over several years), whereas a quarter of the other partners in the same firm referred more than 80 matters to their colleagues in that same time frame.
When we dig deeper into the numbers, we see that a large proportion of the partners in the “under ten” group originated many matters, but simply worked the files by themselves, rather than getting other partners involved. There’s a sort of parallel dispersion for people on the receiving end of those referrals, such that some partners are quite frequently getting work that others originated. If compensation was the sole, or even primary, driver of behavior, wouldn’t we see more homogeneous behavior from partners who are all facing the same incentives within the firm?
The nature of the work explanation: Surely, some types of legal work lend themselves to building bigger teams. You can’t imagine running a major M&A transaction for an oil company without the rainmaker involving partners from tax, regulatory, environmental, employment, compliance and a host of other practices. In our statistical models predicting collaboration (such as the number of work referrals or size of the account team) and its outcomes (total origination revenues and such), we always control for the practice area. As you’d expect, some practices are significant predictors of collaboration and rainmaking – but the pattern is far less stable from year to year, and even less so across the three firms where we have nearly complete data for at least a decade. In most analyses, the practice variable accounts for less than ten percent of the variance in outcomes. Summing up, the empirical support for the nature-of-work hypothesis is less convincing than what our observations and anecdotes lead us to believe.
The collaboration explanation: Often there’s a strong, observable correlation between a rainmaker’s revenue generation and the size of their team. But it’s chicken and egg: does collaboration lead to this growth, or is it merely a by-product of the rainmaker having so much work that he needs to hand it off?
By analyzing growth in partners’ books of business over many years, we can tease out the causal pattern. We find that rainmakers who systematically involve other partners in their work benefit by significantly growing their books of business in coming years, even controlling for the size of the rainmaker’s book in the starting year. In other words, no matter how much work you generate this year, if you refer that work to other partners rather than hoarding it yourself, then your origination amount will increase significantly more next year. Even when accounting for the impact of practices, offices, and specific years (using regressions models with fixed-effects for those variables), we still see a big, highly significant (p < .01) effect of collaboration on future origination fees.
Incidentally, these analyses also help to unpack the Hero Myth: many of the individual characteristics play a negligible role in predicting rainmaking. Professional tenure (highly correlated with age) shows an inverse U-shaped effect such that moderately senior lawyers have the biggest books. Gender has big effects – but that’s a topic for another day. The fixed-effects models should capture many of the remaining individual-level qualities, and they show a modest effect at most. The heroic rainmaker idea is probably so prevalent because it’s easy to observe and flashy examples are so memorable, but it doesn’t receive much statistical support.
Our data from an AmLaw 100 firm lets us pull these findings apart even more so that we can compare the effects of referring work to partners in your own versus other practices (this year) on origination fees from new versus existing clients (next year). Each dollar sign represents the same amount of origination income, and all these results are statistically significant.
You can see that referring work to partners in your own practice helps you make more rain next year in both new and existing clients – probably because delegation like this frees up your time to engage with clients, better understand their business, and prospect for new work. Sending work to partners in other practices has the biggest effect on subsequent-year revenue from existing clients; more lawyers involved there this year means that more people are spotting opportunities and broadening relationships with the client. Perhaps more surprisingly, referring work to partners in other practices also greatly affects future rainmaking at new clients. As one partner explained, “I typically ‘audition’ partners from other practices in clients where I already have the strongest relationships. Once I know their work better and trust them, we develop joint pitches to approach new clients. It takes a while for the payout but it’s powerful.”
Summing up and next steps: Our research starts to uncover the actual reasons behind rainmaker’s seemingly magical success. Collaboration – that is, getting more partners involved in work that you originate – is one of the biggest predictors of a rainmaker’s success. Fortunately, it’s also the one that you have a lot of control over. Of course it’s not easy, seamless, or risk-free. In our next post, we draw our dataset, including surveys of hundreds of law firm partners across multiple firms, to explore typical barriers to collaboration for the “mere mortal”– that is, partners who are on the lower end of the rainmaking experience spectrum. We lay out some practical ways to overcome these obstacles. In Part 3 of this series, we focus on barriers and solutions for experienced rainmakers who are looking to take their client accounts to the next level.
I am writing a book based on this research to be published by Harvard Business Press next year, and this article appearing on Big Law Business will serve as a foundation for one of the chapters. I’m currently developing a Board of Contributors to periodically review preliminary ideas from the manuscript and provide input, critiques, and examples. If you’re interested, please contact me: email@example.com.