Midterm Paper on Ruden McClosky

Inside the organization 1

Nova Southeastern University H. Wayne Huizenga School

of Business & Entrepreneurship

Assignment for Course: 21st century Management

Submitted to: Dr. Helen Turnbull

Submitted by: Iliana Betancourt

Niels BlakeJuan Pablo BollatAntonello CastaldiDoug GoorlandMichelle Singh

Date of Submission: 05/10/2010

Title of Assignment: Midterm Paper on Ruden McClosky

CERTIFICATION OF AUTHORSHIP: I certify that I am the author of this paper and that any assistance I received in its preparation is fully acknowledged and disclosed in the paper. I have also cited any sources from which I used data, ideas or words, either quoted directly or paraphrased. I also certify that this paper was prepared by me specifically for this course.

Student's Signature: Iliana Betancourt, Niels Blake, Juan Pablo Bollat, Antonello Castaldi, Doug Goorland and Michelle Singh

************************************************************************************

Instructor's Grade on Assignment:

Instructor's Comments:


Table of Contents

Introduction (Michelle Singh).........................................................................................................3

Global organization (Michelle Singh).............................................................................................3

Diversity (Niels Blake and Antonello Castaldi)..............................................................................5

Ethics & Social Responsibility (Juan Pablo Bollat)......................................................................10

Organizational Culture (Iliana Betancourt)...................................................................................12

Challenge for the Future (Doug Goorland)...................................................................................14

Conclusion (Doug Goorland)........................................................................................................16


Introduction

Ruden McClosky was founded in 1959 and is considered one of the top most

respected law firms in Florida (About Ruden – Creating Value, 2010). The firm’s offices are

located in Caracas and throughout Florida in the following cities; Boca Raton, Ft.

Lauderdale, Miami, Naples, Orlando, Port St. Lucie, Orlando, Tallahassee, Tampa and West

Palm Beach (About Ruden – Locations, 2010). It is a fully comprehensive law firm that

caters to the requirements of “international regional and local companies, state and local

governments and agencies, and high wealth individuals” (About Ruden – Creating Value,

2010). The firm continues to maintain important “referral relationships with highly

regarded national and international law firms” (About Ruden – Creating Value, 2010).

Global Organization

“The global environment is a set of forces and conditions in the world outside an

organization’s boundary that affect the way it operates and shape its behavior” (Jones &

George, p. 189). As an effect of the global environment, Ruden McClosky conducts business

in over 30 countries world-wide, including Canada, Dubai, the United Kingdom and

Venezuela, making it a global organization. A Global Organization is “an organization that

operates and competes in more than one country” (Jones & George, p. 188).

There are forces from the task and general environment that impact managerial

decision making. According to Jones and George, the task environment is “the set of forces

and conditions that originate with suppliers, distributors, and competitors that affect an


organization’s ability to acquire inputs and dispose of its outputs” (Jones & George, p. 189).

The two major influences on Ruden McClosky are its customers and its competitors.

The customers comprise of “international manufacturers, national retailers and

service companies, institutional investors and lenders, local and regional real estate

developers, sports and entertainment companies” (About Ruden – Creating Value, 2010).

“Competitors are organizations that produce goods and services similar to a particular

organization’s goods and services” (Jones & George, p. 195). The major law firm

competitors are: Holland & Knight, Greenberg Traurig, Fox Rothschild, Fowler White and

Squire Sanders. These competitors often try to gain market share in a poor economy by

recruiting established attorneys from major law firms. This can be seen partially by the

number of lawyers employed by Ruden McClosky being reduced from 172 in 2008 to

slightly over 100 in April, 2010. In addition, many partners were “asked to sign personal

guarantees to back up the firm’s credit line, which led to the resignation” of many partners

who fled to competitors such as Fowler White and Fox Rothschild (Career Center Home –

Law Firm News, 2010).

The general environment includes the wide-ranging global, economic, technological,

sociocultural, demographic, political, and legal forces that affect an organization, and its

task environment (Jones & George, p. 189). The main factor within the general

environment that impacts Ruden McClosky’s managerial decision making is economic

forces. “Economic forces affect the general health and well being of a country or world

region” (Jones & George, p. 199). Since the national financial downturn in the economy,


like many law firms, Ruden McClosky has undergone “office closures, mass defections,

layoffs, pay cuts and hold backs” (Career Center Home – Law Firm News, 2010). Ruden

McClosky’s focal point was real estate, and when the industry began to weaken, the firm’s

business did as well. Some feel management responded too slowly to the real estate

implosion, since other competitors “responded quickly to the downturn and developed a

successful distressed property group focusing on workouts” (Career Center Home – Law

Firm News, 2010). Realizing the problem at hand, management has decided to be proactive

and allow the next generation of lawyers to give new ideas to senior partners. Michael Krul,

a senior partner at Ruden McClosky said, “The old generation and the new generation are

going to work together to regroup, restructure and make Ruden efficient for a brighter

future.” Communication by such diverse generations of attorneys will propel the firm

forward through times of challenge.

DIVERSITY

Diversity is defined as the “differences among people in age, gender, race, ethnicity,

religion, sexual orientation, socioeconomic background, and capabilities/disabilities (Jones &

George, p. 151). It is necessary for a company to understand the importance of diversity as

diversity can help prevent discrimination and promote inclusiveness. Beyond that, diverse

companies are better able to understand and improve the relationship of their surrounding

community, and better manage change. Ruden McClosky is a law firm that strives to achieve

diversity. Ruden’s diversity vision reads, “To be known as a highly competent law firm that is


inclusive and diverse” (Careers – A Future With Ruden, 2010). It is this statement that shows

their commitment to diversity.

Ruden established a Diversity Committee in 2004, chaired by a Chief Diversity Officer

(CDO), Ms. Evett Simmons, an African- American partner of the firm. This is an important step

that is should be desirable for other companies as well, in view of bringing values and statements

about diversity that often remain on paper, into the reality of everyday operations. The diversity

committee was established when the company realized that to be more diverse, it was necessary

to take a serious commitment from an organizational and financial point of view. The law firm

hired a consultant and conducted 17 focus groups with attorneys and staff, whose main outcome

was a diversity plan that is the cornerstone of the Diversity Initiative. In the firm’s intranet as a

part of the Diversity Initiative, employees can access an area called Diversity Happenings, where

there is information on diversity events, news and articles on relative issues. The company

recently added a ‘splash page’ with a monthly contribution by employees focusing on a

particular aspect of diversity.

As reported by Ruden McClosky, in addition to the Diversity Committee, the Management

Committee, Associates Committee, and the Employment Committee work to implement the

diversity goals of the firm:

1. Enhancing the firm’s diversity by increasing the number of minority and women partners

and minority associates, and retaining these attorneys.

2. Continuing to increase the diversity of firm committees, whose members are appointed

by the managing partner.


3. Ensuring the participation of new employees in Ruden Diversity Awareness Training

(RDAT) Workshops, within the first year of employment.

4. Assigning a mentor to new associates within 30 days of employment, and enhancing the

mentor program for associates that includes training for both mentors and protégés.

5. Implementing the recognition programs established for attorneys and support staff.

6. Providing interviewing training for attorneys and staff who are involved in

recruiting/interviewing potential hires/candidates.

7. Providing performance management training for persons involved in a management

position.

Looking at some of the reported results of this plan, Ruden’s Tampa Office was awarded

the law firm’s 1st 2009 Diversity in Practice Growing in Diversity- Office of the Year Award for

leading the way in diversity leadership, particularly with minority attorneys and women partners,

growing from less than 10 percent minority in 2004 to more than 20 percent minority in 2008.

Ruden McClosky (Ruden) is known as one of the leading law firms for diversity, not just

in Florida but the entire United States. Over the years the firm has been awarded and recognized

for its commitment to diversity. Some of the awards and recognition Ruben has received are:

“Ranked in the top 50 law firms in the nation for Diversity by Minority Law Journal,

summer 2008.

Ranked the 8th largest law firm in Florida, and 7th in the ranking of firms with the most

minority lawyers in the state by Daily Business Review.


Ranked 17th for Hispanic Americans and 38th in the top 50 law firms for diversity among

associates. Also ranked 74th out of 100 for the number of women attorneys and 75th out of

the top 100 law firms for diversity overall by the Multicultural Law Magazine .

Ranked 126th in its hiring of minority attorneys, according to The Diversity Score Card (a

survey of the 250 largest firms as ranked by the National Law Journal).

Carl Schuster, Managing Partner, was appointed to the Florida Supreme Court. Standing

Committee on Diversity and Fairness in the Courts in 2005” (Diversity – Awards &

Recognition, 2010).

They also offer financial aid to scholarship recipients that attend an ABA-accredited law

school through its “Diversity Scholarship Program”. Through this program second-year law

students are awarded financial assistance in the amount of $2,500 in the fall for the spring

semester. This award may also be renewed for an additional semester, making the total financial

assistance $5,000. Renews are awarded to students that achieve satisfactory performance in their

respective law school, has applied for admission to The Florida Bar, is otherwise eligible, and if

funding is available (Diversity – Ruden Scholar Program, 2010). Also, successful applicants are

awarded an interview for the “Ruden Summer Associate Program” (Diversity – Ruden Scholar

Program, 2010).

The goal of this “program is to encourage racial and ethnic minority students to attend law

school” (Diversity – Ruden Scholar Program, 2010). The firm believes these groups are

traditionally ‘underrepresented in the legal profession’, and so it is Ruden’s goal to provide


financial assistance to these students. Recipients are selected by a committee of Ruden

McClosky’s partners, subject to final approval of the” Community Foundation” (Diversity –

Ruden Scholar Program, 2010). The decisions of the committee are final. The applicant’s

personal, family, and education background, as well as personal statement and participation in

community service activities are what are considered in selecting recipients. The applicant’s

financial information and that of his or her parents are optional (Diversity – Ruden Scholar

Program, 2010).

Ruden’s commitment to diversity is also visible in its employees. As stated on their website:

“As a leading full- service law firm in a rapidly growing and very diverse state, it is our aim

to reflect the diversity of Florida, not for diversity's sake, but because it will expand our

understanding of people and cultures and enhance our ability to deliver excellent service to our

clients.

We value our employees and our clients. For our employees, we are committed to fair

treatment, recognition of individuality, encouragement to achieve, and reward for

accomplishment. For our clients, we strive to deliver the highest quality service and maintain

long-term relationships. We want our clients to be comfortable with us, not only because we are

good at what we do, but because we are sensitive to the unique needs and cultural differences of

the individuals, organizations and communities we serve” (Career – A Future With Ruden,

2010).

Inside the organization10

This effort to increase diversity within the firm was sanctified through the “creation and

implementation of the Ruden McClosky Diversity Plan and Diversity Initiative” (Career – A

Future With Ruden, 2010). It is through these plans, the scholarship program and ‘pipeline’

development that has aided to increase diversity throughout the firm (Career – A Future

With Ruden, 2010).

ETHICS & SOCIAL RESPONSIBILTY

Based on the current economic situation, it is essential to understand the

significance of ethics and social responsibility now more than ever. For example,

companies used to generating huge profits have found themselves facing ethical and moral

challenges. Many of these companies have refused to accept the economic climate and thus

have begun to cut corners to retain these high profits. This is evident with most recent

Ponzi scheme involving the south Florida law firm of Rothstein Rosenfeldt Adler. Ethics

refers to “the inner-guiding moral principles, values and beliefs that people use to analyze

or interpret a situation and decide what the appropriate way to behave” (Jones & George, p.

112). However, often, these rules are not clear and we may have difficulty deciding what is

right or wrong. As a result, managers throughout the world are presented with great

challenges on a daily basis.

Social responsibility may act as a starting point in solving these ethical dilemmas.

Social responsibility is “the way a company’s managers and employees view their duty or

obligation to make decisions that protect, enhance, and promote the welfare and well-being


of stakeholders and society as a whole” (Jones & George p. 135). When organizations make

decisions it affects many people, and as a result each organization must make a decision

that is favorable for all parties involved. However, things are not always done the way they

are supposed to be. In many cases, greed and self interest take over, and concepts such as

ethics and social responsibility are thrown out the window. This is exactly why Michael

Krul believes it is important to emphasize their importance in the workplace. Based on our

discussions on these topics, he appears to believe in what is right and has a strong set of

values and moral principles that guide her every decision.

In our interview, I asked him, “how much weight does your organization lend to

ethics?” He replied by emphasizing that it was very important to the organization as a

whole since it promotes fairness and equality in the workplace. When we questioned Mr.

Krul about an ethical dilemma, he had an interesting story to share with us regarding a past

client. This client, convicted of a crime and placed on probation for bank fraud, sought to

have an early termination from his probation. The court ordered restitution to be paid by

their client to the bank for an early termination to be granted. However, the client to the

best of his knowledge didn’t have the financial means to make such restitutions. Ruden,

representing the client’s aunt in another matter knew otherwise. They were aware that

their client seeking termination from probation was the beneficiary of a trust left to him by

his aunt. However, they were bound by the ethics code of conduct to keep the trust a

secret. Wanting to make the most ethical and responsible decision, Ruden’s ethics

committee contacted the Florida Bar with regards to the matter. It was the contention of


the bar that to keep the trust a secret, they would be in direct compliance with the code of

ethics. Feeling they could even go a step further regarding ethics, Ruden contacted their

client’s aunt for permission to let her nephew know about the trust. She granted

permission and her nephew was granted termination of his probation.

Ruden holds ethics in the highest regard. They even have an ethics committee as

stated earlier to monitor not only their clients, but their attorneys as staff as well. The

chair of the committee, also serves as the general council to represent the firm in matters of

litigation.

Organizational culture

Organizational culture is “the shared set of beliefs, expectations, values, and norms

that influence how members of an organization relate to one another and cooperate to

achieve organizational goals (Jones & George, p. 370).

In Ruden McClosky, they make sure to encourage a long-term career path for their

employees in order to keep them committed to the organization. Starting with lawyers,

who already have their carrier paths when they get to the firm, their goal is to make it as a

partner of the law firm. They need to wait 7 years until they are eligible. But, during this

time period staff members are dedicated to supervise their work to make sure they are on

track, and give them feedback in order for them to work on the small things that will lead

them to become partners.

For the staff positions, the firm always tries to hire and promote from inside if a

position opens. This is an outstanding way to keep employees motivated and committed.


They use bulletin boards to post job opportunities that are opening up inside the firm. Any

current employee has the first shot to postulate if they are interested before the firm goes

to an outside agency to find somebody.

In order for employees to achieve these promotions, Ruden McClosky gives them

the opportunity to learn new skills and work on areas of improvement. They accomplish

these objectives by offering a number of training sessions with exceptional professionals

who help them learn how to improve themselves in different areas. This incentive is

recognized and appreciated by the employees, because it shows the organization cares for

them.

Annually, the organization measures their managers and employees performance.

This action is necessary for the employees because they receive proper feedback in areas

they need to work on, as well as for the managers because they can determine which

employee needs more supervision and who is deserving of a promotion. This is another

way to keep employees and staff motivated; knowing that each year there could be a

promotion, a wage increase, or recognition for their efforts.

For the lawyers, the firm has statistical information used to measure performance

which is more dollar related such as: how much money they bring in terms of clients, how

much work are they producing that is being build out in collected, and what is the quality of

the legal work. The statistical information is reviewed by a group of partners who give

feedback to supervising lawyers. In terms of the staff, their evaluation is reviewed by their


direct supervisor and is done on a regular basis. In other words, the lawyers are based

more on monetary results. And, the staff‘s evaluation is based on their job reports, and on

their performance according to their supervisors. Moreover, it is important for every

organization to have good communication with their employees. Every member of the law

firm has to have a clear understanding where the company is going, because everyone’s

work will contribute in achieving this goal. Currently, their goal is to be a major statewide

firm in Florida. They believe in the idea of being close to each other and not having

partners 3,000 miles that they will never get to see, so their goal for the next ten years Is to

expand in Florida. The main idea with this plan is to be on top of mind of any business

wanting to invest in Florida.

Challenge for the future

The current economic recession has been said by many financial experts to be a

liquidity crisis in the United States banking system. This crisis has led to the failing of

financial institutions, insurance companies, as well as the bailout of banks and other

companies by governments around the world. It is considered to be the worst financial

crisis by many economists since the Great Depression.

This economic crisis has not been, nor is exclusive to the banks and other financial

institutions. Since these corporations need attorneys in the fields of taxation law,

corporate law, real estate law, and international law, law firms have felt the effects of this

recession as much and in some cases more than the aforementioned financial institutions.

During the past few years, many US law firms have had significant downsizing of their


staffs, and many have closed. It has been “reported that major law firms have cut more

than 10,000 jobs nationwide over the most recent months” alone (The Economy, 2010).

The law firm of Ruden McClosky is no stranger to these downsizing trends and

economic constraints of the current fiscal situation. Ruden, in the past year has had layoffs

with both attorneys as well as other office staff. A large part of this downsizing is due to

Ruden’s large presence in real estate law and the collapse in the real estate market. This is

an immediate and definite challenge in the future for the firm. However, while many firms

concentrate on one area of law, Ruden is diversified. Though real estate is their biggest

practice, they do offer services in over 20 areas of law including many subdivisions of these

areas. It is this diversification and the ‘don’t put all your eggs in one basket’ way of

thinking that enables law firms and other companies to survive during times of recession.

Other challenges for Ruden and realistically, all law firms include the way

companies retain legal services. Many companies in an effort to keep the spending of legal

fees down during tough financial times are shifting toward in-house counsel rather than

hiring outside law firms. About 75% of partners at larger law firms believe corporate

clients hold the power regarding their relationships with outside counsel, while 90% of

general counsel feels they are under pressure to provide more efficient legal services.

(Eversheds LLP’s third annual Law Firm of the 21st Century report).

Despite what most think, the recession by itself has not brought about change in the

legal profession. It has however sped up other key catalysts such as in-house counsel as

stated earlier, globalization, and the expanding of technology. These factors were thought


by many experts to begin to become more and more important over the next 10 years. But

the shift toward efficiency brought on by the economic crisis has accelerated the process

(Eversheds).


REFERENCES

Jones, Gareth R. and George, Jennifer M. (2009). Contemporary Management.

(6th ed.). New York: McGraw-Hill Irwin

Law.com (2010). Career Center Home – Law Firm News, Retrieved May 8, 2010

from http://www.law.com/jsp/law/careercenter/lawArticleCareerCenter.jsp?

id=1202447888483

Ruden McClosky (2010). About Ruden – Creating Value, Retrieved May 8, 2010,

from http://www.ruden.com/about.htm

Ruden McClosky (2010). About Ruden - Locations, Retrieved May 8, 2010, from

http://www.ruden.com/about-locations.html

Ruden McClosky (2010). Diversity – Awards & Recognition, Retrieved May 8, 2010

from http://www.ruden.com/diversity-awards.html

Ruden McClosky (2010). Diversity – Ruden Scholar Program, Retrieved May 8, 2010

http://www.ruden.com/diversity-scholar.html

Ruden McClosky (2010). Careers – A future with Ruden, Retrieved May 8, 2010

http://www.ruden.com/careers-future-diversity.html

The Denver Post (2010). The Economy, Retrieved May 8, 2010,

http://www.denverpost.com/theeconomy/ci_12050886

http://www.denverpost.com/theeconomy/ci_12050886

http://www.ruden.com/careers-future-diversity.html

http://www.ruden.com/diversity-scholar.html

http://www.ruden.com/diversity-awards.html

http://www.ruden.com/about-locations.html

http://www.ruden.com/about.htm

http://www.law.com/jsp/law/careercenter/lawArticleCareerCenter.jsp?id=1202447888483

http://www.law.com/jsp/law/careercenter/lawArticleCareerCenter.jsp?id=1202447888483

Midterm Paper on Ruden McClosky

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