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Clients look for lawyers who are smart, hard-working and aggressive. They hire them to write complicated documents and navigate thorny court proceedings, trusting them to chart the best course.
It’s ironic, then, that there’s a budding consensus that lawyers may not be the best people to run the day-to-day operations of their own law firms.
Law firm partners should concentrate on “the more professional aspects of the practice as opposed to the business aspects of the practice,” according to James Wilber, a principal at legal management consulting firm Altman Weil in Milwaukee. “The more competitive the atmosphere, the more important it is to have the lawyers focus on what only lawyers can do,” he told Bloomberg BNA April 11.
Big law firms began hiring professional administrators around 1990, and “it’s been growing in prevalence ever since then,” Wilber said. A firm’s equity partners, who own the firm, can still set policies, decide on marketing strategies, develop business and nurture client relationships, while handing off the routine management tasks to free up more of their time to practice law.
“Certainly it would be very rare for a firm of 50 or more lawyers to not have a principal administrator,” Wilber said, and “any firm of 20 lawyers or more could be more profitable if they have somebody like that in place.” He added, “The day-to-day business decisions” should be given “to people who are better trained to do it and who are not being taken away from client work.”
The number of law firm administrators is unclear because the Labor Department’s Bureau of Labor Statistics doesn’t have a category for this occupation, Oliver Yandle, executive director of the Association of Legal Administrators, told Bloomberg BNA April 12. “I do know if it is an area that is growing,” he said.
The membership roster of the ALA—which has about 9,000 members—is an indication. ALA members include law firm administrators at all levels, with job titles like chief operating officer, human resource director, and marketing director.
“Firms are realizing that in order to be competitive in this very changed legal environment, they need people who have business acumen and skill sets,” Yandle said. “The enlightened firms that are going to succeed in the future are embracing this approach.”
Nevertheless, “among some attorneys and partners, there is some resistance to the idea of having professional legal administrators,” Yandle said. There also may be resistance to providing administrators “with equal footing” to lawyers on the management committee.
Firm partners should treat the top professional administrators “as partner-peer,” Wilber stressed. The firm’s partners should give law firm administrators “the authority, not just the responsibility, to do their job,” he said.
A few decades ago, law firm administrators often rose through the ranks from paralegal or clerical jobs, Yandle said. “Today, it’s a variety of different paths.” Some rise from clerical positions, some come from other types of professional services firms and “some are lawyers who have decided to go in a different direction.”
Many have accounting or business degrees. Others have specialized degrees, such as a master of science in legal administration from the University of Denver or a master of professional studies in law firm management from George Washington University.
Some large law firms have an entire suite of administrative executives—such as chief pricing officers; facilities managers; and directors of human resources, marketing, finance and technology—as well as a principal administrator, whose title is often chief operating officer.
The nature of law firms can present unique challenges to professional administrators, Yandle said. Doctors who own medical practices typically make decisions quickly, but lawyers find it “harder to think more strategically” because they “are trained to focus on the facts of a specific case.” Yandle added, “The nature of law is argument,” and that approach can make it difficult for a law firm to be “cohesive.”
Yandle thinks most law firm administrators would consider it “a wonderful idea, long overdue,” if law schools educated students about the business aspects of legal practice. Yandle, himself a law school graduate, noted law schools customarily don’t teach many of “the things that lawyers must do in a firm”—like negotiating and billing. Lawyers “may be well-grounded in writing a brief or analyzing a case but not in the nuts and bolts of the business side of the firm,” he said.
Most lawyers “just don’t have the experience” in business or human relations to run a firm, Bill Migneron, chief operating officer at Lathrop & Gage in Kansas City, Mo., told Bloomberg BNA April 10.
Handing off the operational tasks to professional administrators allows a firm’s managing partner, sometimes called the chief executive officer, to “focus on strategy and the practice of law,” while “people with business training” focus on the business issues, he said.
Migneron is also a trustee of the College of Law Practice Management, which honors outstanding law firm administrators and practices.
Some firms, like Lathrop, “do some teaching internally,” Migneron said. Lathrop’s instruction to junior associates focuses on legal writing and business development, but evolves into “business training” as lawyers approach their fifth or sixth year, he said.
Solo practitioners and lawyers in small firms often look to their local bar associations for help regarding law practice management, Migneron said.
Formal training in law firm management is rare, but it does exist. A handful of law schools offer courses in legal project management or similar business-oriented topics, according to Professor Daniel Katz of the Illinois Institute of Technology’s Chicago-Kent College of Law. Besides Chicago-Kent, others offering the courses include Vanderbilt, Michigan State, Suffolk, Georgetown, Stanford and Vermont Law School, he told Bloomberg BNA April 11.
Another strategy—which can accompany the hiring of professional administrators—is to train lawyers to streamline the way they practice law. Seyfarth Shaw, founded in Chicago as a labor and employment law firm, has opened a consultancy to teach its SeyfarthLean system of service delivery. It is also offering a course at the Chicago-Kent law school in an effort to instill sound practices in the upcoming generation of lawyers.
“We think it’s very vital that they learn some of those skills,” Kim Craig, a managing director with SeyfarthLean Consulting, told Bloomberg BNA April 10. “It’s the wave of the future.”
Katz and Craig are teaching the semester-long Legal Project Management and Legal Process Improvement course. Students receive two credits and an opportunity to earn a yellow belt credential in Lean Six Sigma, a performance improvement system that focuses on removing waste.
The 28 law students in the Chicago-Kent course are learning how to “map out” management processes and then determine if unnecessary steps waste time or money. For example, a “process map” might show that a firm overspent on expert witness fees because it didn’t clarify that it wanted the expert to prepare to testify on only a narrow topic, Craig said.
This semester, students are mapping the Illinois divorce process, Katz said.Guest speakers are an important component of the course. Craig said a legal pricing consultant spoke about calculating a fixed fee, and another speaker talked about using data.
Katz said students who take this course may have “an edge in getting a job” because “there’s a demand” for law firm project managers. Chicago Kent is planning to offer the course again next winter, Katz said.
SeyfarthLean Consulting also has conducted workshops at the law schools at Georgetown University, Michigan State, Vanderbilt and the University of Indiana, Craig said.
Regardless of training, the unique character of law firms will pose challenges for administrators. “There aren’t many businesses where the owners are walking around and trained to argue,” Migneron said.
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