Risk and Rain

//Risk and Rain

Risk and Rain

I recently attended an event that made me reflect on a trait that is commonly held by lawyers – risk aversion.

Cassels Brock hosted its annual women’s event last week in support of Dress for Success and provided attendees with a fun networking opportunity that included special “money” to gamble with at a variety of games throughout the night. As I worked my way around the room that evening, I noticed that many attendees seemed reluctant to gamble the money they had been given and I heard more than one lawyer explain this behavior by saying “I’m so risk averse.” If the trait of risk-aversion is so ingrained in some lawyers that it extends to behavior involving fake money, it is worth examining how it may impact a lawyer’s professional development.

A study conducted by Lawyer Metrics in 2013 gathered data from 300 partners, primarily in AmLaw 100 and 200 firms, and found that one of the biggest behavioural differences between rainmakers and service partners was in the category of risk taking: rainmakers expressed a preference for challenging established practices as well as a willingness to bend the rules to achieve higher performance. The study concluded that “all else equal, partners who express a willingness to take risks are about 40% more likely to make it rain.”

In my work, I see the impact of risk-aversion when people are contemplating career changes. Not every move is always going to be a clear step forward in terms of compensation and title. For example, you may be taking a lower salary in the short term in order to move to a firm with better partnership opportunities; or, you may be moving to a compensation structure where you have a lower base salary but the potential for a large upside if you are successful in developing your own book of business. These types of moves are considered risky and candidates often need to spend a lot of time weighing the risks and rewards of these moves.

Risk-aversion can also impact decision making when lawyers have to step out of their comfort zone and make a business decision. Managing partners and practice group leaders may need to examine established practices and make changes in order to innovate and in-house lawyers may be called upon to weigh in on a business decision. If you are one of the (seemingly majority of) lawyers who is risk averse, you should consider the advice of this article which suggests appointing a “devil’s advocate” to create productive debate about risk around important issues.

What I learned from gambling with lawyers is that although risk aversion seems to be a widely-held trait, we at least recognize this trait in ourselves. While your personal level of risk tolerance should of course be a factor that gets weighed in any major decision, including a career change, I do think we should all remember that sometimes it takes a little risk to make it rain.

Carrie is the President and founder of The Heller Group. She specializes in the recruitment and placement of partners and senior lawyers into major law firms, as well as general counsel and senior counsel roles for national and multi-national corporations. In her spare time, Carrie enjoys travelling, yoga, trying out new recipes, and spending time with her husband and two young daughters.

Photo via Bigstockphoto.com

By |2017-05-17T15:23:04+00:00November 9th, 2015|Career Development|Comments Off on Risk and Rain