TMG’s Steve Nelson was quoted in the Bloomberg Business & Practice newsletter concerning the changing nature of law firm COO responsibilities. Nelson pointed out that many of the new COOs have a stronger understanding of the dynamics of the partner-client relationship and will spend more time on client satisfaction, client acquisition, and client retention.
Chief operating officers at law firms are increasingly expected to focus on clients as the demands of the job shift.
New COOs have been appointed at several large firms since June. The executives, like in other industries, oversee departments ranging from technology to marketing.
Some of the newly hired operations leaders also are prioritizing clients—landing and keeping them—duties that have historically fallen outside COOs’ purview. Firms are now looking for operating chiefs who have experience working at the types of companies they want to serve.
“You’re taking someone who will bring to the firm a much stronger understanding of the dynamics of the partner-client relationship and will spend probably more of their time on the way the law is practiced with an aim toward client satisfaction, client acquisition, and client retention,” said Steve Nelson, an executive search consultant. “That’s not the traditional role of the COO, generally.”
At Goodwin, ex-Google legal operations chief Mary O’Carroll is thinking about how the firm prices its services. Her predecessor at the firm, Michael Caplan, joins partners to court potential clients at his new firm Lowenstein Sandler.
The network of qualified law firm COOs remains a small world for now. In the past two months, Lewis Brisbois Bisgaard & Smith hired away McGuireWoods’ COO Richard Davis, prompting his former firm to elevate chief financial officer Jeffrey Connor to fill the role. Faegre Drinker Biddle & Reath hired Buchanan Ingersoll & Rooney’s COO Nolan Kurtz, after which Buchanan internally promoted a replacement.
The jobs come with unique challenges. Many law firm COOs are not lawyers, which can make it difficult to win partner buy-in that’s crucial to making decisions. It also means that ethics rules prevent them from earning equity in the profits they’re charged with helping to grow.
“At most firms today, partners rule the roost,” said Robert Kamins, who was COO at Lewis Brisbois for a nearly three-year stretch ending in 2018. “They have the clients, they have the business, and that makes it challenging for any COO. You’re not practicing as a lawyer. You don’t have the same controls a COO would have at a public or private company.”
Client-Minded
Caplan estimates that he spends 30% of his time at Lowenstein on client-facing initiatives, like strategic pricing and cross-selling services of other practices.
“I’m a business-oriented COO and I have a client perspective,” he said. “Partners bring me to client opportunities to talk about the business of law and operational support.”
Caplan, who joined Lowenstein in February, was chief operating officer at insurance and professional services provider Marsh & McLennan Companies earlier in his career. He also was global director of operations for Goldman Sachs’ legal department.
O’Carroll served as director of legal operations at Google. The former investment banker first began her legal operations career at Orrick, Herrington & Sutcliffe.
At tech-oriented Goodwin, she’s focusing on a key part of the relationship between lawyers and their clients: billing.
O’Carroll said she would “like to see more trust built between clients and law firms” when it comes to how firms price services.
“The billable hour has eroded trust between law firms and clients,” O’Carroll said. “There’s a time and place for that. But there are definitely going to be different ways for us to deliver advice in the future that require us to think differently than we have in the past.”
Mary O’Carroll; Photo: Goodwin
Davis officially joined Lewis Brisbois on Sept. 3. He’s looking at other aspects of the billing process.
Two of his top priorities are “improving our cash conversion cycle” and “to meet client expectations in terms of getting invoices to them promptly,” Davis said. He’s also trying to monitor how the firm’s client relations stack up against competitors.
“Is our demand consistent with the industry and our core peer group? How do we rank against our peer group in awards and client satisfaction? Those are all things that I consider to be part of the competitive intelligence that organizations should look at,” Davis said.
Fried Frank’s move to install a COO specifically for the firm’s bankruptcy practice also came with clients in mind. Ben Schrag, former chief growth officer of advisory firm Kroll, told Bloomberg Law he’s developing lead-tracking systems, go-to-market strategies, and competitive pricing plans for the nascent practice.
“This initiative will not only enhance our operational efficiency but also strengthen our position in the market,” Schrag said.
Kurtz jumped to Faegre Drinker in early September. He said his experience working for former Pennsylvania Gov. Tom Ridge
and later as a lobbyist sharpened his skills for developing client business. He’s exploring how artificial intelligence can help the firm anticipate client needs.
“We are a data-rich organization and we solve client problems,” Kurtz said. “The faster we can get that information to our attorneys and government relations consultants, the faster they can turn that into service for clients.”
Shifting Power Balance
Like at a publicly traded company, ultimate power at a law firm resides with shareholders, said Davis. For law firms, that’s the partners.
“Partners will have to get comfortable understanding they are equity owners, they are experts in IP, M&A, and are great trial attorneys, but that doesn’t make them the best people to make decisions on IT and finance,” Davis said.
Leadership changes at Lewis Brisbois in the past year signaled to Davis an opportunity to make more of a “material difference” that wasn’t available at other firms, he said.
Richard Davis; Photo: Lewis Brisbois
The firm dissolved its executive committee, expanded its management committee, and appointed a new leader in the wake of the departure of more than 100 lawyers. Its co-founder and longtime chairman stepped down and the firm later let go its chief financial officer and chief client relationship officer.
“The organization was embracing change with a new management structure and also has some pretty concrete and visible opportunities for improvement,” Davis said.
The COO role often is more akin to an “influencer,” said Kamins, who founded Vertex Advisors after leaving Lewis Brisbois. At some firms, operational chiefs are relegated to traditional administrative roles without the power to make much impact.
“It is not your firm, ultimately,” he said.
That’s starting to change in some places.
“Partners and lawyers are realizing there’s real value in the technical and financial skills that someone with a business background brings and fusing that with the partnership structure,” Kamins said.
Goodwin’s O’Carroll is a prominent name in the legal operations field. She said she was “very cautious”
when considering her next role, determined to make sure that any firm she joined would delegate to her the authority needed to effectively do the job. At Goodwin, where she oversees more than 1,000 business professionals, the role includes spots on the firm’s executive and management committees.
“I certainly know how challenging it is to be on the business side and try and transform a law firm, not just run it,” O’Carroll said. “It was critical to understand the scope of the role as it’s defined and is this person going to be empowered enough to make decisions and have a seat at the table. ”
