What is Conscious Capitalism?

As explained by Conscious Capitalism, Inc., a non-profit organization dedicated to cultivating the theory and practice of Conscious Capitalism, the movement “builds on the foundations of Capitalism – voluntary exchange, entrepreneurship, competition, freedom to trade and the rule of law.”

The movement has the following four pillars:

Higher Purpose – A purpose that includes, but is more than making profit. For example, our firm’s higher purpose is to make a positive impact by being a great place for great people to work. If we can achieve that, we believe we can provide jobs to sustain families and provide revenue to our vendors.

Stakeholder Orientation – Recognizing that there are several stakeholders in the outcome of a business. These include employees, vendors, customers, investors, and communities in addition to the business owners.

Conscious Leadership – “Human social organizations are created and guided by leaders – people who see a path and inspire others to travel along the path. Conscious Leaders understand and embrace the Higher Purpose of business and focus on creating value for and harmonizing the interests of the business stakeholders.”

Conscious Culture – The values, principles, and practices underlying the business that connect the stakeholders to each other and the purpose, people, and processes embodied by the business.

Challenges for Law Firms

I believe the biggest challenges for law firms adopting Conscious Capitalism lie foremost in the historical, prevailing legal-industry culture and secondarily to certain regulations of lawyers by state bars.

As to regulations, law firms and lawyers are in restricted in many states from sharing profits and client fees with non-attorneys as well as sharing ownership with non-attorneys. These regulations would likely prohibit employee stock option plans. However, even with these limitations, I believe it is still possible for law firms to broadly provide stakeholder orientation for its employees, clients, vendors, and the community. The other tenants of Conscious Capitalism – higher purpose, conscious leadership, and conscious culture – should not be impacted by state bar regulations.

In my opinion, for Conscious Capitalism to really take root and thrive in a business, the owners and leadership purposefully need to take a broader view of the value delivered. This means that wins are defined as results in addition to profits. Giving back to the community and professionally and personally developing employees are just a few of the broader wins. The legal industry’s adoption of profits per partner as a key metric to compare and rank law firms places a heavy focus on profit. Longer term investments, like employee development, can be at odds with annual profits per partner results in the short term. This is unfortunate, but not insurmountable as many law firms routinely commit to a higher purpose.

Get Involved
Want to hear more about the Conscious Capitalism movement or get involved? Visit http://www.consciouscapitalism.org or sign up for our blog called Culture Counts here.

Read more blogs by author: Darin M. Klemchuk

About the Blog: Culture Counts is a blog devoted to the discussion of law firm culture and corporate core values. Frequent topics include positive work environment, conscious capitalism, entrepreneurial management, positive workplace culture, workplace productivity, and corporate core values

About the Firm: Klemchuk LLP is an Intellectual Property (IP), Technology, Internet, and Business law firm located in Dallas, TX. The firm offers comprehensive legal services including litigation and enforcement of all forms of IP as well as registration and licensing of patents, trademarks, trade dress, and copyrights. The firm also provides a wide range of technology, Internet, e-commerce, and business services including business planning, formation, and financing, mergers and acquisitions, business litigation, data privacy, and domain name dispute resolution. Additional information about the IP law firm and its IP attorneys may be found at www.klemchuk.com.