One of the findings in our recent survey of law firm human resources leaders was the particular interest they showed in hiring professionals in the finance area. More than half of the respondents said they were planning to hire financial professionals in the near future, much higher than those who planned to hire marketing, business development, IT, or HR professionals. That survey confirmed what we’ve been seeing—and what our clients have been requesting—over the past year or so.
We recently spoke to a number of law firm Chief Operating Officers and Chief Financial Officers to get a better picture of why there is increased interest in upgrading law firm financial capabilities. Here is what we learned:
- The general paradigm that law firms have been facing in recent years—a slow growth in demand for legal services combined with pushback on rate increases has made efficiency paramount, This not only applies to expense management, but also to billing and collection practices.
- The increasing use of alternative fee arrangements (including large firms taking on more contingency work) requires much more financial monitoring than hourly billing engagements. Moreover, the growth of the litigation funding industry has brought in new stakeholders who want more financial accountability.
- Increasing client pressure on billing and related practices, along with the increase in the now almost universal adoption of e-billing, has made it critical for law firms to assure they handle billing and collection properly. Several COOs told us that their firm has suffered significant write-downs when initial billing was not done to client specifications.
- The complexity of financial systems requires professionals who are expert in both finance and technology. Many firms are currently either beginning or in the process of migrating to either Thomson Elite 3-E (as Thomson no longer supports legacy Elite) or Aderant. Migration, CFOs report, is a particularly expensive and time-consuming process.
- The adjustment to a remote work environment brought on by Covid-19 has illustrated weaknesses in the financial reporting and interpretation process at some firms, particularly given that firm management was under the gun in March and April to gather financial data in order to make responsive business decisions. According to one COO, the difficulty to get this data early in the pandemic made it apparent to many that they needed to upgrade their financial staff.
We have seen a significant uptick in hiring for key positions in the last month, and we expect it to continue, particularly in the financial area. More importantly, the bar has been raised as to what constitutes a successful hire in these unprecedented times.
For more than 20 years, The McCormick Group has been aiding law firms in their recruiting of top-level financial staff, from c-level executives to key managers and analysts. For a free no-obligation discussion of how we can help your firm, please reach out to Steve Nelson at (703) 312-6744, or at snelson@tmg-dc.com.
