Gengis Khan Principle: Why 10% Generate 80% of the Business

Khan_1It's true that in most law firms, only 10% of the partners generate 80% of the new business. I've been fascinated why this is so.

Perhaps it's because only 10% are natural rainmakers, I thought.  Perhaps it's because 90% are content to be service partners.  Perhaps because most lawyers don't know how to generate new business. Then I realized the only explanation why only 10% generate most of the business:

Control.

Look at it from the perspective of Gengis Khan. He who has the clients runs the firm and sits on the management committee.  He who has the clients has power to dole out assignments to others, who rely upon him.  He who has the clients makes everyone else expendable.

For example, I know of a 50-lawyer firm in New York where only 5 lawyers have the clients.  Everyone at the firm wants to please these 5 rainmakers.  Other partners are essentially senior associates, who can leave without concern that they'll take current files with them, because they have no clients of their own.

The 5 rainmaker-Khans don't want anyone else to develop new business, because it would erode their total control.  The rainmakers don't want anyone questioning or challenging them, or demanding a bigger cut of the revenue pie.

The Khans are not concerned that the younger generation can't develop new business.  The rainmakers plan to retire and take their earnings with them.  The Khans want the firm to be in business only long enough to pay their residual origination fees.

This may seem harsh.  But human nature isn't always pretty.

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Steve Matthews - February 21, 2007 1:29 PM

Larry, it's posts like this that make your blog a must read.

Harsh? maybe, but you weren't the only one in the room with the same reflection.

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