Page 39 - MASTER COPY LEADERS BOOK 9editedJKK (24)_Neat
P. 39
Leaders in Legal Business
engaging in more formal strategic planning is not just a good idea, it’s also most likely the difference between a
thriving organization and one that is on a managed but inevitable decline.
Law firm leaders must account for both internal and external factors: not only what practices we want to
offer, but what services is the market willing to buy, and at what price? They are no longer deluded by the notion
that “all revenue is good revenue.” Profitable revenue streams take precedence and deserve, and should consume,
a greater portion of the firm’s resources and investment. Law department leaders, in turn, have come to realize
that senior corporate leadership simply do not find credible that legal costs increase every year, in all areas, at a
rate greater than other corporate costs, and cannot be predicted with any confidence, and furthermore that reducing
legal spend will inevitably expose the business to greater risk. So with these realizations, what are they doing
about it?
Asking for Help
Perhaps the most notable change in post-recession legal organizations is the increasing influence of
business practices and trained business managers to help guide strategy and operations. To be sure, many law
firms and law departments have long employed experienced and sophisticated executives, some with long
experience in law firms and others from industry. But by and large, these voices were muted, as those tasked with
practicing law have always been afforded the benefit of the doubt when building an infrastructure to support their
needs.
Second-guessing a partner’s demand for resources, or marketing tactics, or staffing preferences, or use
(or avoidance) of technology tools, or approach to pricing and discounting, was deemed to interfere with and
potentially impair the quality delivery of legal services and expose the law firm to client dissatisfaction at the very
least. A recent U.S. state bar ethics panel ruled,2 in so many words, that even allowing a business person to have
a title implying influence over a law firm’s practices is an ethical breach, creating a conflict between good business
sense and the practice of law.
Leaders have discovered, however, that good business sense prevails. In law departments, there is a rise
of legal operations executives tasked both with managing the day-to-day activities of the legal function and with
finding ways to improve quality, throughput, and responsiveness while decreasing costs. Law firms have sought
highly-experienced corporate executives to lead practices (sitting alongside the practice group chair who is, as
often as not, deemed worthy of the role based on the ability to generate business rather than to run a business)
and the sophistication of those in longtime C-level roles, e.g., the CFO, CMO, or CIO, continues to increase as
the duties of these functional siloes intersect at an increasing pace. The fastest growing role in large law firms
today is the pricing director, which is often combined with supervision over project management and process
improvement; these are very different disciplines in a corporate setting, but a positive step in the right direction
in a law firm.
Both law firm chairs and chief legal officers of law departments are increasingly turning to consultants to
help them navigate the organizational and market changes. Just as some leaders who became rock stars and thrived
in the earlier era are now embattled or have stepped off the stage, there are some notable consultants whose
expertise was also attuned to a bygone era. Many have long been encouraging firm management to adapt, and
their expertise is in greater demand than ever. The role of a consultant may vary. In one organization, the
management has a clear growth vision but need help selling it internally, and an objective and respected outside
voice is additive. In another, the executive committee may have good intentions, but have a limited understanding
of how to conduct a rigorous strategic review or initiate enterprise-wide multiyear business process improvement
efforts, so they seek specific subject matter expertise. Still others may seek a consigliere, as trading ideas with a
respected and independent peer can offer more benefits with fewer downsides than revealing confidences and
asking for help from one’s law firm partners or law department senior staff.
2 Opinion 642, TEXAS CENTER FOR LEGAL ETHICS, http://legalethicstexas.com/Ethics-Resources/Opinions/Opinion-642.aspx (last visited May 17, 2015).
32
engaging in more formal strategic planning is not just a good idea, it’s also most likely the difference between a
thriving organization and one that is on a managed but inevitable decline.
Law firm leaders must account for both internal and external factors: not only what practices we want to
offer, but what services is the market willing to buy, and at what price? They are no longer deluded by the notion
that “all revenue is good revenue.” Profitable revenue streams take precedence and deserve, and should consume,
a greater portion of the firm’s resources and investment. Law department leaders, in turn, have come to realize
that senior corporate leadership simply do not find credible that legal costs increase every year, in all areas, at a
rate greater than other corporate costs, and cannot be predicted with any confidence, and furthermore that reducing
legal spend will inevitably expose the business to greater risk. So with these realizations, what are they doing
about it?
Asking for Help
Perhaps the most notable change in post-recession legal organizations is the increasing influence of
business practices and trained business managers to help guide strategy and operations. To be sure, many law
firms and law departments have long employed experienced and sophisticated executives, some with long
experience in law firms and others from industry. But by and large, these voices were muted, as those tasked with
practicing law have always been afforded the benefit of the doubt when building an infrastructure to support their
needs.
Second-guessing a partner’s demand for resources, or marketing tactics, or staffing preferences, or use
(or avoidance) of technology tools, or approach to pricing and discounting, was deemed to interfere with and
potentially impair the quality delivery of legal services and expose the law firm to client dissatisfaction at the very
least. A recent U.S. state bar ethics panel ruled,2 in so many words, that even allowing a business person to have
a title implying influence over a law firm’s practices is an ethical breach, creating a conflict between good business
sense and the practice of law.
Leaders have discovered, however, that good business sense prevails. In law departments, there is a rise
of legal operations executives tasked both with managing the day-to-day activities of the legal function and with
finding ways to improve quality, throughput, and responsiveness while decreasing costs. Law firms have sought
highly-experienced corporate executives to lead practices (sitting alongside the practice group chair who is, as
often as not, deemed worthy of the role based on the ability to generate business rather than to run a business)
and the sophistication of those in longtime C-level roles, e.g., the CFO, CMO, or CIO, continues to increase as
the duties of these functional siloes intersect at an increasing pace. The fastest growing role in large law firms
today is the pricing director, which is often combined with supervision over project management and process
improvement; these are very different disciplines in a corporate setting, but a positive step in the right direction
in a law firm.
Both law firm chairs and chief legal officers of law departments are increasingly turning to consultants to
help them navigate the organizational and market changes. Just as some leaders who became rock stars and thrived
in the earlier era are now embattled or have stepped off the stage, there are some notable consultants whose
expertise was also attuned to a bygone era. Many have long been encouraging firm management to adapt, and
their expertise is in greater demand than ever. The role of a consultant may vary. In one organization, the
management has a clear growth vision but need help selling it internally, and an objective and respected outside
voice is additive. In another, the executive committee may have good intentions, but have a limited understanding
of how to conduct a rigorous strategic review or initiate enterprise-wide multiyear business process improvement
efforts, so they seek specific subject matter expertise. Still others may seek a consigliere, as trading ideas with a
respected and independent peer can offer more benefits with fewer downsides than revealing confidences and
asking for help from one’s law firm partners or law department senior staff.
2 Opinion 642, TEXAS CENTER FOR LEGAL ETHICS, http://legalethicstexas.com/Ethics-Resources/Opinions/Opinion-642.aspx (last visited May 17, 2015).
32
