A recent article in Bloomberg Big Law Business detailed the increasing sophistication of Chief Operating Officers at law firms, pointing out that many of the new COOs have managed corporate organizations, other major professional services firms, and large government agencies.
But the article misses an important factor in what law firm leaders need in today’s environment. Much has been written lately about the challenges that the AmLaw law firms are facing because of the increased scrutiny by clients and their own “chief operating officers”, as evidenced by the growth of the Corporate Legal Operations Consortium (CLOC). What has changed, particularly since the recession, has been a complete reevaluation of the “law firm engagement”. Clients have taken a much more comprehensive view of their outside counsel retention, not just in terms of billing rates and alternative fees, but in the way that their work is handled. This ranges from billing practices, composition of teams, and the reporting of even minor “event changes” that impacts the engagement as a whole.
COOs of the future cannot limit their focus on internal matters, such as financial management, facilities, human resources, and even partner compensation. Instead, these new leaders have to understand, as Ron Friedmann noted in his recent blog post in Prism Legal that “firms must battle for market share while taking steps to protect profits. The best way to do both is by improving value and service. More value and better service means lawyers and firms must change how they work. Anything else is just window dressing”.
Tomorrow’s COO needs to have a solid understanding of things like legal outsourcing, alternative fee structures, legal project management, client feedback and communication, and the factors involved in corporate selection of outside counsel. Three different models come to mind:
- Executives of the alternative legal services providers which have earned an ever-increasing share of the legal market, places like Elevate Services, United Lex, and Novus Law. Those executives have shown a razor-like focus on providing value to clients and solving their business problems.
- The legal operations executives in many of the nation’s largest corporate law departments. Thinking like a client can always be a valuable skill set for any professional services company and these professionals understand the dynamics of all constituencies that drive legal spend.
- Those already in law firms playing strategic roles with regard to such things as pricing, legal project management, practice group management, and client relations. These professionals are on the front lines of the most significant changes facing the legal industry as a whole and are well-equipped to tackle the key strategic issues facing law firms in the future.
TMG’s Take is a regular e-mail advisory produced by The McCormick Group. The company’s Legal, Government Affairs, and Law Firm Management groups combine the expertise of more than 15 Consultants to help law firms fulfill all of their lawyer and administrative recruiting needs. TMG’s Take covers topics across the spectrum of law firm management, including associate and partner compensation, growth strategies, marketing and business development, operations and facilities management, finance and accounting, professional development, and technology. Please direct all inquiries to Steve Nelson, Managing Principal at (703) 841-1700 or snelson@tmg-dc.com.
