Adam Smith, Esq.
...An inquiry into the economics of law firms

• The Missed Exit Ramp
  

  Today, in a rare departure into citing what not to do, we have as Exhibit A a piece in the current issue of the ABA's Law Practice Magazine, "Essential Attributes of Successful Managing Partners."  And what, pray tell, are those attributes of the successful?

  • Visionary
  • Trustworthy
  • Financially rigorous
  • Optimistic
  • Team-oriented
  • Skilled communicator
  • Cheerleader, and
  • Mentor

  Overall, we are further instructed, "two themes quickly emerged" when considering managing partner candidates:  First, being able to "manage the firm in a fiscally responsible way," and second, "creat[ing] an environment where people thrive and enjoy doing excellent legal work."  If you're at all like me, it's at about this point that you're saying to yourself, "...and Motherhood and apple pie."

  In that case, the line forms to the left.

  Shall we devote the exceedingly brief span of attention required to expose this type of thinking (and publishing!) as the vacuous nattering it is?

  "Fiscally responsible?"  Indeed.  Let's hope that grade school teachers can actually read, themselves, that bricklayers know top from side, and that nurses know male from female.  Talk about table stakes....

  And as for "creating the right environment," our ABA-certified author has evidently escaped even the most glancing encounter with the real world.  One may as well instruct a miler to "run faster," a linebacker to "tackle more often," or a CPA to "do the general ledger better."  Saying it produces precisely zero result:  It's all in the details and the nuance.

  Of which you will find none from our author.

  Am I belaboring this?  Perhaps, but I'd like to think I actually have a moral for you.  There's a lot of advice out there for managing partners, for executive committees, for practice group leaders, and the like.  I know that for all of you in positions such as those  your "firm management" hat feels quite distinct from your "practicing lawyer" hat.  But I urge you, with all the bemused rhetoric I can muster in this piece, not to leave your faculties of critical thinking at the door when you don your "firm management" hat. 

  Do think critically; do examine the source; do ask yourself what the author is actually trying to say (assuming they know themselves—an occupational hazard).  Do, in other words, be the same agnostic intellectual sponge absorbing information and points of view that you are whenever you're introduced to a new matter.  And then, and only then, form your own opinions—and be prepared to re-examine them in light of new evidence.

  On the other hand, you could have just skipped to our  poor author's "bio" at the bottom of the sorry little ABA LPM piece and there you would learn all  you need to know.  She describes herself as "a leadership and development consultant and coach [who] specializes in helping successful firms leverage their strengths and grow their business." 

  Had I only known it were that simple. 

  All this time, I may have been missing the main chance here at "Adam Smith, Esq."  Instead of reading critically, thinking analytically, and doing my level best to write cogently, all I may have needed to do was to persuade readers that I wanted to help the successful among you "leverage and grow."

  Darn:  Missed that obvious exit ramp.

  But don't fear:  We're just heading on down the road.

• Report from Hong Kong
  

  An initial report from Hong Kong (written in HK and in mid-air, but published from New York):

  If you've never been to Hong  Kong, you  should know that the Brits may be unsurpassed in their talent for choosing their colonial HQ's.  The natural strategic, mercantile, and scenic advantages of HK are oft-remarked, but experiencing it on the ground (and on the water) drive the reality home more powerfully  than guidebooks or newspaper articles could ever do.

  As a native New Yorker, I could not have felt more at home in HK:  Vertical, dense, mass-transit-centric, with a financial district ("Central") even more narrowly circumscribed, concentrated, and mandatory for serious firms than midtown or Wall Street, it has the feel of a mature, well-defined, coherent city.  Beijing does not, by the way, and I am told the same is true of Shanghai; they are more works-in-process at the start of the 21st Century, albeit with five or so millenia of history. 

  Speaking self-referentially, it's also extraordinarily convenient that English is ubiquitously spoken among residents in all walks of life—cerainly in the circles I traveled in.  Again, Beijing stands in marked contrast:  One of the most important meetings I had there was with a Deputy Director of the all-important Ministry of Justice, and it was conducted through sequential translation.

  Other aspects, some superficial and some not, qualify HK as a Global City in my book:

  • The  wealth/poverty contrast.  Five or ten minutes walk up the hill (Victoria Peak) from Central one finds grimy alleys, wash hanging  out to dry from 6th-story windows, and street stalls selling everything from dried fruits and nuts to mysterious and deeply intriguing local vegetables.
  • The polyglot districts:  Nathan Road in Kowloon, for example (5-10 minutes across the Harbor from the Central Pier on the famous Star Ferry line, which costs 20¢ one-way) reminds me of nothing so much as the bastard child of Times Square and Canal Street, despite the fact that the regal, brand-new, and uber-luxe Peninsula Hotel with its Bulgari, Hermes, Cartier, and Prada boutiques, anchors its intersection with Salisbury Street.
  • Its profoundly impressive 1997-built international airport, linked to Central by a 20-minute, $12 high-speed "Airport Express" train, where you can find at the gates listed destinations as prosaic as New  York, Los Angeles, Singapore, and Tokyo, and as exotic as Phuket, Kuala Lumpur, Fukuoka, and Ho Chi  Minh City.
  • Most importantly and impressively and of greatest relevance for the readers of "Adam Smith, Esq.," HK  is the first, and perhaps the last, place I've been where UK/Magic Circle and US/Wall Street and US/Elsewhere firms compete on what seems to be a level playing field.  There are no incumbents, there is no home-field advantage, there  is no noblesse oblige, and there is no presumptive superior status in quality.

  Is Hong Kong the financial capital of Asia? 

  Tokyo might once have aspired to that crown, but a decade plus of stagnation, deflation, slowly aging and eroding population, and a profoundly inhospitable attitude towards foreign business (and law firms) seem to have sapped its momentum.

  Other cities are mentioned by some, but dismissed by most.  Singapore?  "Sterile," "ungodly boring," "it works but the same way the German war production worked."  Shanghai?  "It's Milwaukee and it will always be Milwaukee—it will never be a financial capital of any account."

  One thing is certain:  Hong Kong is the financial capital of China.  Its advantages are numerous, of long-standing, and hard to duplicate:

  • The Anglo-Saxon colonial heritage has lent it an ineradicable, or certainly stout and durable, orientation towards open markets, economic freedom, and the rule of law.
  • While Mandarin (and to a far lesser extent Cantonese) are important, and in some eyes non-negotiable linguistic skills for transactional lawyers, English remains the lingua franca.
  • Geographically, it's happily situated more or less at the center of gravity of the region:  Vietnam is actually closer than Beijing, and access to and from Taiwan is unfettered (it's prohibited from the mainland PRC, meaning a trip between Taiwan and the mainland involves a day-long detour through HK).
  • By all accounts, it's simply a lovely place to live:  "I came for two weeks and stayed for  20 years" was recited more than once, and there's a genuinely deep and enduring Anglo-Saxon infrastructure of everything from  social clubs to pre-schools.

  Why won't Beijing as the capital of the PRC supplant it eventually? 

  Of course, if China truly emerges as a 21st-Century superpower, that may happen, but speaking for myself, on the ground in both places this past week, it was hard to detect incipient pressure for a move.  

  "Beijing is Washington and Hong Kong is New York" may be too glib by half, but the truth at the core of the tossed-off phrase is that HK is the funnel for China investments inbound and outbound, and Beijing is where you need to know the right ministers and the right regulators to assure that no unexpected impediments arise.  A presence in both seems indispensable if one is serious about China.   This assumes, of course, that