Insights from the Top | Law Firm Leadership: Bill Baldiga

In the first episode of the Insights from the Top podcast, BRG Executive Chairman David Teece speaks with Bill Baldiga, a partner at and the former chief executive officer of the law firm Brown Rudnick. They discuss topics including competitive markets, disruptive solutions, and how creativity can impact culture.

Transcript

[00:00:00] David Teece: Hello, my name is David Teece. I’m executive chairman of Berkeley Research Group. I’m also a professor at the University of California, Berkeley. In this episode, the first in our special series featuring law firm industry leaders, I’ll speak with Bill Baldiga, chief executive officer of the law firm of Brown Rudnick from 2019 through to 2022. He led the firm through the difficult period of the pandemic, but the firm is actually over seventy years old. So good afternoon.

[00:00:34] Bill Baldiga: Good to talk, David.

[00:00:36] Teece: Bill, let me begin by recognizing that it’s not an easy feat for a firm to exist over seventy years. And perhaps you can give us a little bit of history and point out how did you manage institutionalize beyond the founders. The founders of the firm, as I understand it, are long gone, yet the firm continues to do very well and to prosper and to grow. A lot of firms stumble once the founders fade away. Yours has done just the opposite. Give us some insight.

[00:01:07] Baldiga: Certainly. We’ve been fortunate. Seventy years means that the firm was institutionalized a few times over and passed the baton a few times. We were formed by graduates of Harvard Law School who during the 1940s, because they were Jewish, there were no homes for them among the leading local law firms, and that attitude of overcoming and being resilient and making our own place in a very competitive world really has stayed as a beacon and direction for us throughout those seventy-plus years.

Obviously, we’re a much different firm, in our practices and our geographic scope and our emphases, than we were. But a couple of things have stayed consistent. One is that we feel that we do very good work in very competitive markets. We are, especially in today’s world, not a particularly big firm. There are 150 or so firms in the world bigger than us.

But we play on the biggest stages. And many of our practices are up against, whether it’s in the courtroom or around a table or virtual table with the other firms in the world that are doing the best work for the most demanding clients. We also feel that we present with disruptive solutions often. And by that, I mean, whether it’s a product of our size or where we’ve come from or the people we attract, we often think out of the box. We are dealing very often with our clients’ most difficult problems, biggest challenges. And again, whether that’s litigation or a deal that they need to do or very much want to do. And we’re pretty creative, and I’m enormously proud of where we’ve come in those years.

[00:02:57] Teece: Now, how has that creativity impacted the culture? As I understand it, you continue to recruit young people. You yourself have been with the firm throughout your entire career. How do you keep it exciting? And how do you bring up young folks so that they in turn become partners, or at least have a good shot at becoming partners, and you grow from within. Because as I understand it you’ve mainly grown from within, even though there’ve been some amount of external hires.

[00:03:26] Baldiga: Sure. And yes, like every firm we’ve done external hiring, and some of our best partners have come from other places, and we’ve done well in that regard. But a lot of us—I’ve been with the firm thirty-eight years, and there are an awful lot of us, from senior associates to junior and senior partners, who have been with the firm for a long time. And for many of us, our entire careers, which is not very prevalent in this industry, maybe any industry at this point. We think of ourselves as entrepreneurial in the extreme, in that each one of us is an owner in all respects.
And as law firms get to be bigger, there’s a sense of ownership that goes away. People become more and more passive. They fill roles, but they don’t define their roles.
We demand for each of us, including of our associates: help define the firm every time. Define who we are, who we want to be. Be an active participant in creating the firm. Because in this environment, a firm that stays static, it falls behind.

You have to be different and better every year. And we demand that of our youngest lawyers, and those lawyers who do best with us—and staff members—are resilient and take on and welcome new challenges. And frankly, the people who do most poorly with us are those who feel more comfortable in a more, certainly stable, but predictable, maybe more comfortable professional existence. Our environment is not the one for everyone, but for those who get up every morning looking forward to a new challenge, we are one of those firms that it’s the best place to be.

[00:05:12] Teece: Well, it does indeed sound very entrepreneurial. And as you say, everybody has at least got the mindset of an owner. But in prior conversations, you also said that you’re a meritocracy in the extreme. How do you balance all of this? You know, there’s equity and inclusion and being entrepreneurial, lots of things going on at once. What are your metrics of meritocracy? And how do you ensure that you’ve always got the best talent? Is it that the other factors are an enabler for that? Or are they bound together in some other way?

[00:05:46] Baldiga: David, I wish I could say I had some sort of secret sauce. I don’t, we don’t. We talk to our partners a lot, and we’re constantly looking to improve. We don’t do anything because that’s the way that we did things for years. We don’t have clients just because those have been clients for decades or generations. We try to do the work that we want to do, that we find most energizing and of course, most profitable.

In terms of the balancing that it takes to have great lawyers, but yet be very entrepreneurial, it means that we compensate based on true contributions to the firm, not at all on seniority. Of course, reputation and things like that go into it. But we look at people’s true contributions to the firm, not over a career, but over the last several years, economic, but also noneconomic in terms of the training and development of younger associates and the contributions to firm culture. And it’s enormously competitive out there in our industry, but we think we pay pretty competitively for true contributions.

And we compensate from top to bottom on a very subjective basis. There are no algorithms to go into our compensation. We’re a small-enough firm that firm leadership closets itself away for a couple of days each year. And we try to know everything that everybody’s doing, and we set compensation and people have been pretty happy with that. Maybe not every decision every year, but over the long term, they see it as fair and they stay with us for those years.

[00:07:29] Teece: That’s a remarkable achievement, because very often when it’s subjective, it becomes politicized and you’ve found a way to avoid that. But let me come back to the excitement factor. And in a previous conversation, you used a metaphor I like a lot, which is that it often feels like you’re sitting on the edge of a volcano. So, how do you manage when you’re sitting on the edge of a volcano, and do you have to devolve into crisis management from time to time, or is everything sufficiently routinized at sitting on the edge of a volcano is just a regular thing?

[00:08:04] Baldiga: Well, I use that expression. It’s not a comfortable seat, certainly, but what I meant by that is there’s a great deal of activity. And you can’t predict comfortably year to year, even month to month, week to week, you sort of take it as it comes, and you have clients that are themselves volatile, often. We do a lot of work for hedge funds. We do very little work, for example, for the money center banks, almost none. Well, that type of practice for example, is much more predictable. I did that for the first twenty years of my career and routine, profitable, but mind-numbing for me, at least, and for many of us. After a certain point, we chose to be with clients that are themselves successful when they are more nimble, more quick, and a little smarter than the people down the street and want to work with lawyers who are themselves a little smarter, a little quicker, and much more nimble than the other lawyers down the street. There are lots of great law firms.

But the clients that come to us most naturally are those who value what we do. Those clients or themselves often volatile and are disruptors in their industries, which hedge funds are by definition. And not all our clients are hedge funds, certainly, but it’s an attitude among our corporate clients, among our litigation clients. People come to us when they are not looking for something out of the box and maybe something that doesn’t really even exist yet, but they’ll bet on us to find it. We don’t always, but we do a fair amount, and whether or not we do, we have a hell of a good time working closely with our clients to try our best to do that.

[00:09:48] Teece: Well, when you’re in an environment where there’s a lot of turbulence, of course it does take a special type of person to enjoy that and thrive in it. And I think we would agree it takes a lot of resilience and grit. And I know that you yourself, if I remember correctly, are the first in your family to go to college. Why don’t you talk a little bit about that and, and understand the firm or you have, set up a fellowship for such students? And speak a little about that background and how you’ve turned that into a real advantage.

[00:10:21] Baldiga: Sure. I’m not going to be one of those people who pretends they were born in a log cabin and walked to school barefoot. But I am the first, I’m proud to say, in my family to go to college, I became a lawyer without really knowing what that would be. And it’s been a great ride.

We do find in the legal community, in all business communities and maybe in life, there’s an unfortunate amount of what I would call a sense of entitlement among people all too often. We find that we do best with people with the—a little sense of entitlement, as little as possible, and a great sense of appreciation and gratitude for the great opportunities they’ve been given. Let’s face it. If you’re with one of the major law firms, you are doing work that’s intellectually challenging with clients that are challenging and you making more money than you really thought you ever would have an opportunity to do.

For some people, they forget a lot of that; for others, they have a better sense of appreciation that we’re privileged, and I’ve never lost that sense myself that it’s a privilege to lead a law firm. It’s a privilege to wake up every morning, truly not knowing whether I can meet the challenges that will come my way because every day is an intellectual challenge.

The thing that I hear most often from partners who join us from other firms? They’ve never seen so many firmwide emails celebrating each other’s successes. There’s no sense of jealousy. There’s a lot of pats on the back.

And unfortunately, so many of them are by email because we’re not literally with each other as much as we, you know, maybe were, certainly in the old days when everyone was in one office. But we truly celebrate the successes. We don’t take any of them for granted. And sure. Not every trial is a winner, not every deal closes, but when we do something great, we’re really happy for each other, and we promote each other, and we’re happy for each other.

[00:12:22] Teece: Now, given that you have, like most of us, almost an allergic reaction to entitlement mentality, how do you sort that out on recruiting, and when you’re recruiting young people, what are the tell-tale signs that you look for, if you do look for them, to signal that maybe this person’s a little bit too overentitled for the environment that you offer?

[00:12:45] Baldiga: Again, that’s something where I wish I had a recipe for consistent success in that regard, I can’t pretend that I do all hiring. But we look really hard for people who have overcome things. We’ve all had challenges in our lives, and some people are better than others in overcoming them. Some people have a better sense of appreciating that good fortune plays in our house and our families in our other relationships in every one of our successes; none of us accomplishes what we’ve had just on account of our own skills. Not everyone who is, for example, the first to go to college in their family has a great sense of gratitude, but a pretty high percentage do. And not everyone who has overcome great hurdles appreciates just the role of good fortune and good grace in their success, but most do.

And so we have developed, for example, a fellowship that we sponsor law students who are the first in their family to go to college. And we sponsor them through law school, and we offer them positions with the firm, both during the summers and then upon graduation. We respect diversity of perhaps economic and social background. There were not enough people in major law firms, I feel that, you know, now see the world maybe in a different way as to, from where they’ve come and appreciating the great distance of that. And the people who have joined us through this fellowship program are spectacular. And they’re future leaders in the firm.

[00:14:24] Teece: Now you mentioned different dimensions of diversity. Is intellectual diversity something that’s valued given how you pointed out you like to be disruptive? How do you select for folks that are more likely to be comfortable and creative in that regard?

[00:14:42] Baldiga: Well, we respect diversity of thought tremendously. We’re tremendously proud of our pro bono work, for example, in voting rights cases where we’ve had some great litigation successes for our clients, all on a pro bono basis. And yet we represent some leading Republican and right-wing media figures. And we have partners in our firm who have gone to the last few Democratic and to the last few Republican conventions with very deep-seated beliefs as to the future of the United States, for example. And it’s the same in London.

So while we demand intellectual prowess, we do not require or even tolerate—I’m not sure what the right way to say it—but we need to feel what we feel strongly. We need to act on it. We have to treat each other decently regardless of where each of us has come from.

[00:15:46] Teece: Well, it sounds like you have a very positive culture and people are very kind and considerate to each other and you give a lot of accolades. How do you deliver criticisms? How do you give constructive feedback?

[00:15:59] Baldiga: David, I would say we could always do better. No, one’s perfect. I’m not, and we’re not. And there are ways in which we are working hard now to improve our culture. And you never declare victory on that. And I think as soon as any organization does do that, then they’re sliding down the slope. It’s a constant battle. And whenever an organization is made up solely of 450 or so people, working on these things as a constant, criticism is best delivered directly. We have systems and evaluations and so forth.

I don’t remember whether we talked before—for years I coached middle school and then junior varsity girls basketball because my daughters were basketball players. And I often compare coaching lawyers, leading lawyers, type-A personalities at the height of their profession with coaching teenagers. And you can never deliver criticism unless it’s sandwiched within two positives. And I joked the only difference between teenagers learning a sport and lawyers at the height of the profession, are that the teenagers are much more secure in their own environments.

But lawyers, I think, especially highly, highly successful lawyers, need encouragement. Everyone still needs encouragement, but you just have to work hard to allow them also to take constructive critique.

[00:17:21] Teece: Well, I like your term of sandwiching criticism between praise; that’s often the way it has to go. Let me change the subject. I understand that you have a net-zero carbon goal for the firm. Is that correct?

[00:17:35] Baldiga: We do.

[00:17:36] Teece: What was the impetus that led you to set that goal, and how much progress have you made in that direction?

[00:17:42] Baldiga: Well, like so many things, our clients have brought that to our doorstep. We are leaders in energy transition. We have a great technology practice; energy transition, or dream tech, is really a technology practice more than an energy practice as companies far and wide develop alternatives to older energy products. And those clients separate themselves from some of the older technologies by themselves having the zero emission goals, zero impact.

And we feel that if we’re going to work for some of these exciting younger companies, or older companies as they rediscover themselves, we better ourselves take that responsibility seriously. I think within a few years, every company, every business enterprise, or the great majority of us will recognize that zero impact is a good thing to do.

We will be more attractive to employees. We will be more attractive to clients. And it’s the right thing to do. So that is our goal. We are doing a lot of things—not any, again, not any magic wand. But you know, we’re, we’re well beyond now, the simple recycling and so forth, but moving towards, looking hard as to how we handle travel, how we handle every aspect of our business from energy savings to the buildings in which we’re into who we buy from and how we provide our services. We have a ways to go. It will take several years to get there, but we’re on our way.

[00:19:22] Teece: And how will you know when you get there? Have you got some metrics or are you just changing behaviors and activities and feeling confident you’ll get there? But when will you know you’ve got there?

[00:19:34] Baldiga: Well, we have set in motion measurement devices of types so that we will have a metric and a goal to achieve. One of the things that I’ve learned is a false sense of progress to compare yourselves to the activity that you did during the COVID years—because frankly that’s a low bar. And so we are looking at what we’re doing now as our baseline and moving from there.

And again, it’s no magic, but reducing to the greatest extent possible, printing, finding ways to be together that don’t involve as much travel. Travel is a tremendous use of energy. But we want to spend the travel that we do being with our clients. We have a tremendous emphasis within our firm about being with our clients physically or in whatever way—email being the last choice, the easiest, but for that reason the worst. We feel that we want to be sitting with our clients as they’re getting the emails from other law firms. And let them get emails from others and let us be on the phone with them, or even better having lunch with them or sitting in their offices, learning more about their business.

[00:21:04] Teece: Well, I liked the way you referenced COVID as if it’s in the rear-vision mirror, and let’s hope it is. But let’s reflect a little bit. What did you learn about managing work from home? What’s the go-forward plan? How do you maintain this very strong culture you’ve got without as much time in the office?

[00:21:24] Baldiga: Law firm leaders are, again, privileged to be able to have home setups and home offices and resources and technical people and so forth. I think I mentioned before that both of my daughters and my wife, actually, teach. And so when I felt sorry for myself that a certain technology didn’t work or something like that, I had no sympathy from my daughter who was trying to teach high school chemistry from her home with a six-month-old grabbing her leg and trying not to blow her office up at home while I’m complaining about that I needed a longer extension cord.

So resiliency: personal resiliency and institutional resiliency. It’s often overlooked, but we found out what was resilient. We all found out quickly that the internet, for example, was more resilient than we had feared. All of us now think back two years in a month ago, when we thought everybody’s going to go home, the internet is going to crash and we’ll all go back to the dark ages, and the internet held up.

Most businesses held on; most law firms did amazingly well. But I think we’ve seen over the two years that law firms did fine. And we actually did very well by way of being profitable because we were able to reduce expenses considerably.

But what about the fabric that binds? We put off things like retreats. And even the smaller get-togethers that are so critical to continue to weave the fabric that binds us. I think the youngest lawyers who have joined us and the staff members who have joined us during the couple of last years have paid the biggest price in terms of not truly seeing how we interact with each other on a day-to-day basis.

I think we’re all working hard as law firm leaders now—I certainly am—to work overtime to try and make that happen. I find it inconceivable that we’ve had people with us for two years who never sat across the desk. And to see, for example, about the little interactions that teach younger people how to deal with each other or how much a smile means, how much, how to deliver criticism, what praise, how to treat opponents.

And with a world conducted entirely online, a lot of that has been lost. And we need to get back to it, and we need to get back to it pretty urgently. Again, not for the sake of people like me who have been doing this for a long time, but for the sake of people who really do need to learn how to be part of a successful enterprise over the long term.

[00:24:05] Teece: Well, Bill, that’s a pretty good place to end, but I do have one more question, which is, do you have a question you wish I had asked you?

[00:24:14] Baldiga: You know, another distinguishing feature of our firm, and it goes back to being who we are and who’s attracted to us: I’m really proud of our younger people. My predecessor said, “You know you’re doing okay when the next generation of lawyers is better than your generation.”

And a couple of years ago in my first year CEO, I had some work done to show where our work was coming from. And more than 50 percent of our revenues were being generated primarily by lawyers, age fifty or under. And when I’ve talked about that at various CEO functions and so forth, people were astounded. First of all, this isn’t something that is generally, you know, no one does the work to sort of figure that out. I don’t keep doing it, but I was struck by the vibrancy of our younger lawyers. We really push our younger people to the fore. We push them in front of clients. We push them in front of the cameras, virtual or otherwise.

And I guess I end with what’s the future look like? And I say, David, damn good. I couldn’t be more pleased with where we’re heading, and I couldn’t be more excited. I won’t be part of all of it. There’ll be a lot of our future, certainly, after I leave it in the hands of others, but I couldn’t be more excited. And I think the way the world is right now, more will change in the next five years maybe that changed in the last twenty and how we deliver services, how we work with clients, the work in front of us. There’ll be new areas of practice that we couldn’t even imagine today.

And our younger lawyers will be doing that. And I’m confident that we’ll have a big part of that and we’ll have a hell of a good time doing it.

[00:25:58] Teece: Well, thank you, Bill. You clearly have a keen sense of stewardship, and you have in the structure culture the firm institutionalized a lot of things that are necessary to ensure a prosperous future. So thank you very much for your time today, and good luck with all your ventures.

[00:26:15] Baldiga: Thanks, David, really appreciate it. Have a good afternoon.

[00:26:18] Teece: You too. Bye-bye.

The views and opinions expressed in this podcast are those of the participants and do not necessarily reflect the opinions, position, or policy of Berkeley Research Group or its other employees and affiliates.