Career Paths for Law Firm Accounting-Financial Professionals

This two-part article explores career path opportunities for individuals who have an accounting or finance background and experience working with law firms and attorneys. Part One focuses on opportunities to consult as an external service provider. Part Two will examine opportunities to advance internally as a member of a firm's management team.

What Law Firm Consultants Do

Groucho Marx would likely have defined consulting as the art of looking for problems, finding them everywhere, diagnosing them incorrectly and applying the wrong remedies. A less exuberant but more useful description is that consultants help firms identify significant problems and recommend effective solutions to those problems.

As a law firm management consultant, you often become an advisor, coach, project manager, trainer or some combination thereof. By introducing external perspectives and combining business intelligence with your own experience, you provide information that is new to client firms.

In the role of trusted advisor, you may find yourself regularly listening to, supporting, comforting, and counseling a firm's managing partner or executive committee. Good consultants not only listen, but also analyze, brainstorm, challenge assumptions, and persuade. In particular, you'll need to convince often-recalcitrant lawyers to become better managers of their business by implementing new ideas and strategies.

Client firms also seek consultants to help implement difficult decisions such as needed adjustments and improvements to their partner compensation system.

An accounting-financial knowledge base is therefore only the start of being a good law firm consultant. You also need to have strong interpersonal skills and at times be able to work under intense pressure.

Consulting Opportunities

Law firms today are hard pressed by increased business competition, client convergence, law firm convergence, downward pressure on fees, upward pressure on salaries (including recruitment wars), free agency partners, the challenge of using technology effectively, other issues affecting profitability, and the overall pace of change. Accordingly, there are ample opportunities for consultants to make a difference.

A law firm management consultant with an accounting-financial background can select from a wide range of possible focal areas. Some obvious areas include:

• Enhanced management reporting;
• Financial analysis and profitability improvement;
• Infrastructure assessments ' back office operations;
• Mergers & acquisitions;
• Partner and associate compensation plans;
• Strategic planning; and
• Technology, especially financial system selection and implementation.

Consultants may also branch out into somewhat more generic aspects of management consulting such as:

• Crisis management;
• Executive recruiting;
• Planning and facilitating retreats; and
• Providing temporary staffing.

Types of Consulting Firms

In the overall management-consulting field, there are essentially two career options: generalist or specialist. Examples of generalist firms include McKinsey, Bain, and Booz Allen. Some consulting firms perceived as specialists are IT consulting shops such as Accenture and Baker Robbins.

In the law firm world, there are many individual consultancies and a growing list of midsize consultancies such as Altman Weil, Edge International and Hildebrandt. Mid-size firms are mostly generalists, although a specific firm might be perceived as having a “strategy” or “merger and acquisition” specialty. Many CPA firms have also made tremendous inroads into the strategy consulting business.

Self Assessment: Is Consulting for You?

Given the scope and size of career opportunities, it is well worth asking where you might fit into the consulting industry ' and whether you want to fit in.

Before you dive headlong into consulting, a careful examination of your own skills, values and interests is a must. You'll need to commit to an ongoing process of serious introspection and skill inventorying.

Broadly speaking, the job requirements and skill set for law firm consulting are as follows:

• Industry experience;
• Communication and presentation;
• Personality and people skills;
• Passion for client service;
• Data interpretation;
• Analytical skills;
• Selling yourself and services;
• Innovation, creativity, passion for ideas;
• Initiative; and
• Time investment.

All skills in the preceding list must be high level; low- or medium-level skills are not a basis for consulting.

That is why you need to focus on your key strengths, and why expanding your consulting “toolkit” will likely entail additional training and education.

Along with being competent and creative, you'll need a fair amount of courage. As well expressed by McKinsey managing director Fred Gluck back in 1994, what really distinguishes outstanding consultants is the willingness to “really take risks … with your thinking, to take risks in how far you're trying to push the client, and not to be conservative and too cautious.”

Ensuring a good personal fit with the consulting business will help you succeed. The more honestly and convincingly you can answer questions about why you are across the table from a prospective client, the better you will do. Doing well, in turn, will enable you to make a difference in a career that you enjoy, and that will contribute much to your personal happiness.

Establishing Credibility

How does one begin the transition to consulting from a current role as an accountant or CPA, or from a law firm CFO or COO position? As Steve Forbes states in his magazine every month: “With all thy getting get understanding.” What are you known for (or what do you want to become known for)? Where you can make the greatest difference, and what is your capacity for learning?

A good place to start is to get on the speaker's circuit. Examples of conferences around the country include these topical areas:

• Benchmarking;
• Competitive and Business Intelligence;
• COO and CFO Forums;
• Large Firm Conferences;
• Leadership;
• Marketing Partner Forums;
• Partner Compensation;
• Strategy; and
• Technology.

Get your name in front of conference sponsors including the Association of Legal Administrators, the American Bar Association, state and local bar associations, Northstar Conferences, Glasser Legal Works, Legal Education, and the Legal Marketing Association. Let them know who you are and what subject matters you can speak to.

Seek out training to enhance your skill and the value you can offer in the marketplace. Making a commitment to stay current with trends and techniques requires a dedicated effort and a significant investment in professional reading and development. Subscribe to appropriate professional journals and newsletters, such as the one you are reading now. Training is also available, such as the National Conference on Advanced Medical and Legal Practice Consulting sponsored by the American Institute of Certified Public Accountants. [See, Editor's Note.]

Also refer to our article on training and credentialing opportunities for legal administrators in the May 2004 edition of Accounting & Financial Planning for Law Firms.

In addition, you need to put pen to paper and author articles and get your name in print. Many publishers are in constant need of authors and subject matter. Just ask the editor of this periodical! [Editor's Note: Send inquiries to [email protected].]

Taking a Broad View of Consulting

If you succeed in getting consulting work, you will find yourself providing advice to clients of high intelligence. Nevertheless, you will generally be more knowledgeable than your clients about law firm management, finance, marketing and the like. You provide value through: 1) understanding and interpreting the market; 2) knowing how professional firms operate; and 3) using this experience and knowledge to get at your clients' real issues.

Whatever your specialty, understanding your client's culture and how that culture may impede progress is vital to your practice. “The way we do things around here” isn't necessarily good for a client firm's business; it may simply result from a history of bad habits, which you are being asked to address.

Note that firm cultures and cultural-change objectives vary widely.

We have heard comments from law firm partners ranging from “we need to be more business-like and less country club” to “we need to change our thinking on how to make money around here” to “whatever we do, we must remain a humanly caring place.”

Barbara Buchholz has aptly characterized a law firm's distinctive culture as a “complex but usually cohesive amalgam of ideas, customs, personalities, backgrounds, relationships and skills of [the firm's] members. It is honed over time, reshaped periodically by internal and external factors, and manifested in its people and how they practice in a deep, almost subconscious way.” The key idea here for consultants is that culture can be honed and periodically reshaped by external factors. Change is a necessity for firms to survive and thrive, and you as a consultant can facilitate and guide that change.

[Editor's Note: Both authors will be speakers at the 2005 AICPA National Conference on Advanced Medical and Legal Practice Consulting (Tempe, AZ, June 12-14), which features 2.5 days of specialized training for individuals interested in consulting to law firms and health care providers. The conference includes a half-day session titled Law Firm Consulting 101.]

This two-part article explores career path opportunities for individuals who have an accounting or finance background and experience working with law firms and attorneys. Part One focuses on opportunities to consult as an external service provider. Part Two will examine opportunities to advance internally as a member of a firm's management team.

What Law Firm Consultants Do

Groucho Marx would likely have defined consulting as the art of looking for problems, finding them everywhere, diagnosing them incorrectly and applying the wrong remedies. A less exuberant but more useful description is that consultants help firms identify significant problems and recommend effective solutions to those problems.

As a law firm management consultant, you often become an advisor, coach, project manager, trainer or some combination thereof. By introducing external perspectives and combining business intelligence with your own experience, you provide information that is new to client firms.

In the role of trusted advisor, you may find yourself regularly listening to, supporting, comforting, and counseling a firm's managing partner or executive committee. Good consultants not only listen, but also analyze, brainstorm, challenge assumptions, and persuade. In particular, you'll need to convince often-recalcitrant lawyers to become better managers of their business by implementing new ideas and strategies.

Client firms also seek consultants to help implement difficult decisions such as needed adjustments and improvements to their partner compensation system.

An accounting-financial knowledge base is therefore only the start of being a good law firm consultant. You also need to have strong interpersonal skills and at times be able to work under intense pressure.

Consulting Opportunities

Law firms today are hard pressed by increased business competition, client convergence, law firm convergence, downward pressure on fees, upward pressure on salaries (including recruitment wars), free agency partners, the challenge of using technology effectively, other issues affecting profitability, and the overall pace of change. Accordingly, there are ample opportunities for consultants to make a difference.

A law firm management consultant with an accounting-financial background can select from a wide range of possible focal areas. Some obvious areas include:

• Enhanced management reporting;
• Financial analysis and profitability improvement;
• Infrastructure assessments ' back office operations;
• Mergers & acquisitions;
• Partner and associate compensation plans;
• Strategic planning; and
• Technology, especially financial system selection and implementation.

Consultants may also branch out into somewhat more generic aspects of management consulting such as:

• Crisis management;
• Executive recruiting;
• Planning and facilitating retreats; and
• Providing temporary staffing.

Types of Consulting Firms

In the overall management-consulting field, there are essentially two career options: generalist or specialist. Examples of generalist firms include McKinsey, Bain, and Booz Allen. Some consulting firms perceived as specialists are IT consulting shops such as Accenture and Baker Robbins.

In the law firm world, there are many individual consultancies and a growing list of midsize consultancies such as Altman Weil, Edge International and Hildebrandt. Mid-size firms are mostly generalists, although a specific firm might be perceived as having a “strategy” or “merger and acquisition” specialty. Many CPA firms have also made tremendous inroads into the strategy consulting business.

Self Assessment: Is Consulting for You?

Given the scope and size of career opportunities, it is well worth asking where you might fit into the consulting industry ' and whether you want to fit in.

Before you dive headlong into consulting, a careful examination of your own skills, values and interests is a must. You'll need to commit to an ongoing process of serious introspection and skill inventorying.

Broadly speaking, the job requirements and skill set for law firm consulting are as follows:

• Industry experience;
• Communication and presentation;
• Personality and people skills;
• Passion for client service;
• Data interpretation;
• Analytical skills;
• Selling yourself and services;
• Innovation, creativity, passion for ideas;
• Initiative; and
• Time investment.

All skills in the preceding list must be high level; low- or medium-level skills are not a basis for consulting.

That is why you need to focus on your key strengths, and why expanding your consulting “toolkit” will likely entail additional training and education.

Along with being competent and creative, you'll need a fair amount of courage. As well expressed by McKinsey managing director Fred Gluck back in 1994, what really distinguishes outstanding consultants is the willingness to “really take risks … with your thinking, to take risks in how far you're trying to push the client, and not to be conservative and too cautious.”

Ensuring a good personal fit with the consulting business will help you succeed. The more honestly and convincingly you can answer questions about why you are across the table from a prospective client, the better you will do. Doing well, in turn, will enable you to make a difference in a career that you enjoy, and that will contribute much to your personal happiness.

Establishing Credibility

How does one begin the transition to consulting from a current role as an accountant or CPA, or from a law firm CFO or COO position? As Steve Forbes states in his magazine every month: “With all thy getting get understanding.” What are you known for (or what do you want to become known for)? Where you can make the greatest difference, and what is your capacity for learning?

A good place to start is to get on the speaker's circuit. Examples of conferences around the country include these topical areas:

• Benchmarking;
• Competitive and Business Intelligence;
• COO and CFO Forums;
• Large Firm Conferences;
• Leadership;
• Marketing Partner Forums;
• Partner Compensation;
• Strategy; and
• Technology.

Get your name in front of conference sponsors including the Association of Legal Administrators, the American Bar Association, state and local bar associations, Northstar Conferences, Glasser Legal Works, Legal Education, and the Legal Marketing Association. Let them know who you are and what subject matters you can speak to.

Seek out training to enhance your skill and the value you can offer in the marketplace. Making a commitment to stay current with trends and techniques requires a dedicated effort and a significant investment in professional reading and development. Subscribe to appropriate professional journals and newsletters, such as the one you are reading now. Training is also available, such as the National Conference on Advanced Medical and Legal Practice Consulting sponsored by the American Institute of Certified Public Accountants. [See, Editor's Note.]

Also refer to our article on training and credentialing opportunities for legal administrators in the May 2004 edition of Accounting & Financial Planning for Law Firms.

In addition, you need to put pen to paper and author articles and get your name in print. Many publishers are in constant need of authors and subject matter. Just ask the editor of this periodical! [Editor's Note: Send inquiries to [email protected].]

Taking a Broad View of Consulting

If you succeed in getting consulting work, you will find yourself providing advice to clients of high intelligence. Nevertheless, you will generally be more knowledgeable than your clients about law firm management, finance, marketing and the like. You provide value through: 1) understanding and interpreting the market; 2) knowing how professional firms operate; and 3) using this experience and knowledge to get at your clients' real issues.

Whatever your specialty, understanding your client's culture and how that culture may impede progress is vital to your practice. “The way we do things around here” isn't necessarily good for a client firm's business; it may simply result from a history of bad habits, which you are being asked to address.

Note that firm cultures and cultural-change objectives vary widely.

We have heard comments from law firm partners ranging from “we need to be more business-like and less country club” to “we need to change our thinking on how to make money around here” to “whatever we do, we must remain a humanly caring place.”

Barbara Buchholz has aptly characterized a law firm's distinctive culture as a “complex but usually cohesive amalgam of ideas, customs, personalities, backgrounds, relationships and skills of [the firm's] members. It is honed over time, reshaped periodically by internal and external factors, and manifested in its people and how they practice in a deep, almost subconscious way.” The key idea here for consultants is that culture can be honed and periodically reshaped by external factors. Change is a necessity for firms to survive and thrive, and you as a consultant can facilitate and guide that change.

[Editor's Note: Both authors will be speakers at the 2005 AICPA National Conference on Advanced Medical and Legal Practice Consulting (Tempe, AZ, June 12-14), which features 2.5 days of specialized training for individuals interested in consulting to law firms and health care providers. The conference includes a half-day session titled Law Firm Consulting 101.]