About Beehives, Spin-offs and Leadership

“O abelha rainha, faz de mim um instrumento de teu prazer, sim, e de tua gloria” Mel, Maria Bethania.

As mentioned in the introduction to my book about management of law firms, one of the things that motivated me to carry on that work was trying to understand why Latam legal markets are so unstable. When I started as a lawyer in the 80´ there were some firms that were the leaders of that market in Argentina. Twenty years later that scene had changed dramatically. From a purely market perspective, one may argue that spin-offs (as well as mergers) are a consequence of market needs and opportunities so there is nothing inappropriate about them. The truth is that for many firms a spin-off is not a consequence of strategic and cold-blooded decisions but rather of internal fights and egotistical impulses, which produce (at least in their initial stages) headaches and disturbances for the firms involved and for clients. Regardless of the typical press releases used by partners during spin-offs, where the quality of service and the interest of clients seem to be the main drivers, it is obvious that a significant number of these breakups are prompted by efficiencies of the market or client´s requirements. Moreover, in many cases it makes life harder for all parties involved. When you look at any Latam legal market you will find that merges or consolidations are rare (leaving aside lateral hires, which is a different situation) but spin-offs are quite common. In some markets i.e. Mexico, it has become like a national sport that Mexican lawyers like to laugh about. So spin-offs are things lawyers like to do every now and then, although they have a negative perception about it.

I have grown fond of bees and beehives as an organizational model ever since David Maister used them to describe lawyers and firms who are willing to work as a team and invest in the long-term. They seem to be stable and work very hard for the well-being of the bee community. Recently however I had an opportunity to learn more about bees and beehives in a conversation with a beekeeper. What particularly struck me (perhaps with a feeling of letdown) was to find out that bees also have their own spin-offs just like lawyers, and their reasons are very interesting, so let´s see what we can learn from them.

Although bees are workaholics in developing their beehives they also produce regularly “swarms of bees” (enjambre de abejas) where a part of the beehive leaves with another “queen bee” to form another beehive. According to the beekeeper, this happens for two main reasons (i) ecological demands, like suffering an external attack or climate conditions that turn the actual beehive unstable or dangerous for all the bees, and (ii) growth demands, because spring produces new flowers where they can get food and the existing beehive is not sufficiently capable of absorbing that need to grow. Both these reasons are biological and respond to the survival mechanisms of bees. While bees stay as a swarm they are unstable and weak since they have not yet found a place to live and form their new beehive. In this stage, bees are less dangerous to outsiders since they don´t bite because they don´t have a beehive to protect. The beekeeper mentioned that honey producers try to find and develop bees that don´t have the instinct to form swarms and leave the beehive (the “wild bees”) since that is more costly and inefficient (at that point I jumped out of my chair and shouted “Those are the institutional bees!”, but he looked at me with dismay and surprise and responded “We don´t describe them that way”).

You probably had the same reaction as I had after reflecting on the paragraph above: we are not only similar to monkeys but also to bees! Indeed they are even more advanced and liberal than we are, if you think about it, since they are all commanded by the female individuals (which is still unheard in our all-too-conservative-minded industry). Lawyers seek out alternative projects when market conditions seem adequate to take that kind of risks, and normally come in times of either poor (danger) or prosperous (growth) conditions. When you look, for instance, the Argentine market you will find that in the 1990´ an extraordinary number of new firms were born, and some of them make the top of the charts in a relatively short period of time. In the tough years after 2008 (and even before), also a good number of young firms appeared only to find that a slow market didn´t have space for new leaders; so they remained -until now- as good and menacing second-tier firms waiting for better opportunities in the future.

Consequently, emulating a swarm of bees is not always the best idea. You stay homeless for a while trying to find your place in the market and it may be difficult to find a tree good enough as the one you had before. You will probably stay drifting around for a while until you discover the right place and direction … if you ever do. And here is where the leadership element comes into the picture. Sometimes the queen bee is not the best leader and creating a swarm is mostly to accommodate their own expectations and wishes. When that happen, dangers and opportunities are interpreted erroneously and decisions are ill-founded. Like with the queen bees, lawyers -specially young ones- like to trust and follow their leaders in these kind of adventures but the truth is that spin-offs are only sometimes the right thing to do. Like the “institutional bees” stability is more productive in the development of professional assets step by step (talent, quality and reputation), than starting all over again. The individual nature of lawyers creates the fantasy that you can start your own firm with little effort and just your personal clout and knowledge, but “organizational assets” are developed over time and are not easy to readily replicate elsewhere. The “ego drive” might produce an exhilarating sensation towards starting a new firm, but the “institutional bees” will always have an advantage, specially in a market that is becoming more collaborative and less individually-based.

Leaders should make an effort to avoid behaving as those queen bees which, as in the Maria Bethania beautiful song, want their bees working for their pleasure and glory. Real leaders get a strong kick from making their firms great and, for that purpose, they are willing to reduce their power and glory and create “institutional beehives” where swarns are unnecessary and inefficient. I hope you can find that out for yourself.