Competitive Law Firm Leadership

Many firms have recognized the need for strong business, marketing and technology management and have hired well qualified and highly compensated individuals to fill those areas of need. However, the area in which only minimal progress has occurred is in the most crucial area of Law Firm Leadership.

No matter how qualified the non-lawyer management group may be at any firm, there are still significant areas of the practice that must be reserved for high-level lawyer management and control. Practice direction decisions, compensation, partner discipline and selection, client selection and relationship building, professional practice and cost control are just some of the few crucial areas that must be managed by lawyers on a regular basis. The quality of the Managing Partner, members of the Management Committee and practice group leadership varies from firm to firm. The methodologies employed by firms to select partners for these positions and the level of authority given to those partners is also a major variable.

Competitive Marketplace

Today's law firm marketplace is the most competitive it has ever been. Clients are more demanding and sophisticated and expect rapid, high-quality, reasonably priced service from their law firm. Any firm that wants to be successful must assure that it is well-managed, or face the probability of diminished income or even dissolution. One of the major factors in “rainmakers” moving from firm to firm is the level of quality of the firm's legal management group.

In many law firms, the partner leadership group consists almost exclusively of those lawyers with the largest book of business. In some cases this works out well as this group may also have management skills. In many other situations, this does not work out as well, as these partners have a need to spend a great deal of their time servicing their clients and maintaining a high level of business income leaving them little time to devote to the proper management of the firm. The day-to-day management tasks are often delegated to others who may or may not have the talent or the necessary level of “clout” among the other partners to do the job well.

'Benevolent Despots'

Another major common problem is the existing Managing Partner who has taken on the burden of firm management, and rules as a “Benevolent Despot.” In truth, this system often works well, but has a significant downside if there is no clear line of succession. I have had many discussions with Managing Partners who would like to plan their future retirement or who would gladly give up their management role and go back to the full-time practice of law, but feel that they have an obligation to the firm to stay in the job as there is simply no other partner both willing and able to take their place.

In a corporation, you can often bring in a new CEO from the outside,especially if that person has a good track record in your specific industry, and this is often done. Law firms are different. It is extremely difficult to impose a new Managing Partner on an existing group of partners who have developed a certain firm culture and “pecking order” and to expect that person to have any success. So, how do you solve this problem?

The modern law firm has to proactively develop the ability to identify, train and develop competent lawyer management internally. Potential lawyer managers must be identified early in their career in order for there to be sufficient time to properly train and provide real hands-on, lower-level firm management experience that can be controlled and reviewed over a period of time necessary to evaluate a person's true potential for management. This selection process is the key to success. Some few firms have used psychological testing and an outside consulting interview process to facilitate this important task. A shift in traditional thinking has to occur for the firm to recognize that those lawyers who have the ability and willingness to lead the firm deserve compensation on a level that is appropriately comparable with those who are significant rainmakers. That is not to say that lawyer leaders should not have a book of business, it certainly is of significant value and does help in the management process, but it should not be the sole criterion for accession to a senior management position.

In a firm of any size, only a few will meet the basic requirements of demonstrable administrative and business talent, ability to positively interact interpersonally, and willingness to take on a leadership role. The training process will further identify those who would be most able to lead. In addition, the firm needs to establish a plan, based on its culture, as to its ideal leadership structure so that it can delineate the specific lawyer management roles that have to be filled and the type of partner best suited for each of these jobs.

This is a difficult and time-consuming effort that can partially be outsourced to qualified consultants, but it is a task that firms should not avoid doing. In the past, significant profits were able to mask significant inefficiencies. This is no longer the case. Only the well-managed firm will prosper in today's market and into the future. Firms must focus on the quality of their internal lawyer leadership if they are to survive.

Conclusion

The proper development of internal lawyer leadership is a major task that can no longer be left to happenstance. The development of high-quality lawyer management has to be a number one priority. A firm can do it alone or with outside help but it has to be done.

Arthur G. Levin is the founder and President of AGL Associates, a firm specializing in law firm consulting and leadership development, individual lawyer business development training, and working with companies on how to sell products and services to law firms. Website: www.aglassociates.net.

Many firms have recognized the need for strong business, marketing and technology management and have hired well qualified and highly compensated individuals to fill those areas of need. However, the area in which only minimal progress has occurred is in the most crucial area of Law Firm Leadership.

No matter how qualified the non-lawyer management group may be at any firm, there are still significant areas of the practice that must be reserved for high-level lawyer management and control. Practice direction decisions, compensation, partner discipline and selection, client selection and relationship building, professional practice and cost control are just some of the few crucial areas that must be managed by lawyers on a regular basis. The quality of the Managing Partner, members of the Management Committee and practice group leadership varies from firm to firm. The methodologies employed by firms to select partners for these positions and the level of authority given to those partners is also a major variable.

Competitive Marketplace

Today's law firm marketplace is the most competitive it has ever been. Clients are more demanding and sophisticated and expect rapid, high-quality, reasonably priced service from their law firm. Any firm that wants to be successful must assure that it is well-managed, or face the probability of diminished income or even dissolution. One of the major factors in “rainmakers” moving from firm to firm is the level of quality of the firm's legal management group.

In many law firms, the partner leadership group consists almost exclusively of those lawyers with the largest book of business. In some cases this works out well as this group may also have management skills. In many other situations, this does not work out as well, as these partners have a need to spend a great deal of their time servicing their clients and maintaining a high level of business income leaving them little time to devote to the proper management of the firm. The day-to-day management tasks are often delegated to others who may or may not have the talent or the necessary level of “clout” among the other partners to do the job well.

'Benevolent Despots'

Another major common problem is the existing Managing Partner who has taken on the burden of firm management, and rules as a “Benevolent Despot.” In truth, this system often works well, but has a significant downside if there is no clear line of succession. I have had many discussions with Managing Partners who would like to plan their future retirement or who would gladly give up their management role and go back to the full-time practice of law, but feel that they have an obligation to the firm to stay in the job as there is simply no other partner both willing and able to take their place.

In a corporation, you can often bring in a new CEO from the outside,especially if that person has a good track record in your specific industry, and this is often done. Law firms are different. It is extremely difficult to impose a new Managing Partner on an existing group of partners who have developed a certain firm culture and “pecking order” and to expect that person to have any success. So, how do you solve this problem?

The modern law firm has to proactively develop the ability to identify, train and develop competent lawyer management internally. Potential lawyer managers must be identified early in their career in order for there to be sufficient time to properly train and provide real hands-on, lower-level firm management experience that can be controlled and reviewed over a period of time necessary to evaluate a person's true potential for management. This selection process is the key to success. Some few firms have used psychological testing and an outside consulting interview process to facilitate this important task. A shift in traditional thinking has to occur for the firm to recognize that those lawyers who have the ability and willingness to lead the firm deserve compensation on a level that is appropriately comparable with those who are significant rainmakers. That is not to say that lawyer leaders should not have a book of business, it certainly is of significant value and does help in the management process, but it should not be the sole criterion for accession to a senior management position.

In a firm of any size, only a few will meet the basic requirements of demonstrable administrative and business talent, ability to positively interact interpersonally, and willingness to take on a leadership role. The training process will further identify those who would be most able to lead. In addition, the firm needs to establish a plan, based on its culture, as to its ideal leadership structure so that it can delineate the specific lawyer management roles that have to be filled and the type of partner best suited for each of these jobs.

This is a difficult and time-consuming effort that can partially be outsourced to qualified consultants, but it is a task that firms should not avoid doing. In the past, significant profits were able to mask significant inefficiencies. This is no longer the case. Only the well-managed firm will prosper in today's market and into the future. Firms must focus on the quality of their internal lawyer leadership if they are to survive.

Conclusion

The proper development of internal lawyer leadership is a major task that can no longer be left to happenstance. The development of high-quality lawyer management has to be a number one priority. A firm can do it alone or with outside help but it has to be done.

Arthur G. Levin is the founder and President of AGL Associates, a firm specializing in law firm consulting and leadership development, individual lawyer business development training, and working with companies on how to sell products and services to law firms. Website: www.aglassociates.net.