Shea & Gould, a prominent New York law firm of 230 attorneys, was formed in the early 1960s by William A. Shea, a prominent attorney. Shea Stadium was named after him for his efforts in forming the Mets baseball team. His firm enjoyed a prestigious clientele and was very prosperous.
Problems emerged at his firm when he retired as managing partner and there was no one available with the leadership skills necessary to lead the firm. An executive committee was responsible for management decisions that were implemented by various managing partners who lacked the necessary skills to lead the firm. The business was decentralized and diversified.
Dissention among the partners grew, and the firm’s structure was chaotic. Although the firm remained profitable, the partners and employees were dissatisfied with the firm’s compensation program. Employees were leaving in droves. One partner was quoted as saying, “The firm has no economic problems, no serious debt. What it lacks is a social fabric, harmony as a unit.”
A management consultant was retained to create a better compensation structure and a more structured firm government, but it was too late. The firm’s intellectual property department defected to join another firm and took $20 million in business with them. Panic set in, and the firm could not recover. It finally dissolved and closed its doors forever. One partner summed it up this way: “A law firm has to exist for more reasons than just making money. Otherwise, you just keep selling out to the highest bidder.”
a. What was missing from this firm’s governance?
b. What should have been done to stop its demise?
c. What aspects of the CEMEC principle are missing here?