08 Jun 2012

Welcome to the real world

Young lawyers are seldom being taught effective management skills, argues Silvia Hodges. It is a knowledge gap that could hit the international profession hard

Boot camp: the practical solution to law firm management issues?

‘They are called IPOs, not LPOs,’ snapped the grey-haired professor, scowling at me with undisguised disdain and disapproval through thick-rimmed spectacles.
It was a couple of years ago and we were both attending a conference at which academics from US law schools discussed undergraduate legal education.
The sage scholars agreed that the study of the philosophy of law and other theoretical concepts were all essential before a degree could be awarded. ‘But how about also teaching them about the realities of the legal market, about the commoditisation of legal services and LPOs,’ I suggested.
In today’s highly competitive legal market, it is imperative to bring more to the table than just excellent lawyering skills – an understanding of the business world and management skills are also crucial.
Clients are demanding it, and yet around the globe law students are being allowed to graduate with little or no exposure to finance, economics, project and knowledge management, marketing and business development, or leading people. That’s a terrible thing to do to them.

Venture capitalists

In the past decade, the legal profession has seen vast change; new competitors have emerged; the market share of legal process outsourcing companies (LPOs) has grown significantly at a time when most traditional law firms felt the pain of economic downturn and had to adjust their expectations of growth and profitability.
Online legal services are offered in some markets both to private consumers as well as to (small) businesses at prices that causes traditional law firms to shake their heads in disbelief.
Venture capitalists are pouring money into legal services. Google Ventures is part of a group that infused $18.5 million into San Francisco-based Rocket Lawyer, which charges $9.99 to $39.95 a month to review documents, give some legal advice and then refer clients to its network of law firms.
On the other side of the Atlantic last October, private equity house Palamon Capital Partners bought a majority stake in Quality Solicitors, the marketing umbrella body that includes a network of English high street consumer law firms.
Meanwhile, increasing numbers of corporate clients involve their purchasing departments in the buying of legal services and they hire legal operations professionals to help analyse expenditure. The new litmus test for lawyers and their clients is: does it make good business sense to work with you and your firm? Clients appreciate their legal advisers taking a more commercially focused approach in which lawyers start from the business issue itself and work towards the legal solution, rather than approaching a matter from an academic legal perspective, as if it was a theoretical problem.
But where do lawyers get necessary business skills? In the UK, Nottingham Law School pioneered an MBA in legal practice management more than a decade ago. In the US, several law schools – including Harvard, Fordham, Georgetown, Indiana, Hofstra, Pace and Temple – offer courses on law firm practice management on their JD programmes. George Washington University’s College of Professional Studies offers a master’s degree in law practice management, and the University of Denver’s Sturm College of Law offers an MS in legal administration. Harvard Law School and Germany’s Bucerius Law School offer leadership courses in law firm management.
The challenge is that lawyers have traditionally not thought of management as important. ‘Transition’ courses are a good idea as they come at a time when a lawyer is more likely to understand that new skills are needed.
For example, senior associates on the verge of becoming (junior) partners benefit from project and knowledge management, marketing and business development, while partners who are to be promoted to head a practice or regional office benefit from more project management in addition to leadership courses.
At some point in their careers, lawyers should have touched all areas of managerial challenges and approaches necessary for success – including finance and law firm economics, marketing and business development, knowledge management and project management, leading and developing people.
I prefer gathering 15 to 20 participants for workshops with case studies, exercises, and lots of practical examples. Ideally, a mix of academics, successful partners and law firm managers – as well as experts from other professional services – both educate and entertain them with management insights and advice.

Boot camp

Face-to-face teaching provides networking opportunities and the chance to learn from each other and online aspects should be integrated to supplement courses. Depending on how regionally dispersed the lawyers are, a week-long management boot-camp might be a practical solution that achieves rapid results. Otherwise, weekend sessions could work.
To give this process any chance of succeeding, a law firm’s leadership must make clear that management training is a priority for lawyers. Awareness campaigns within the firm can convince lawyers to leave their legal comfort zones and embrace something new.
Firms should begin with a pilot group that is willing and interested and make participation a badge of honour. After completing the course, firms should have a core group of evangelists who not only think in new ways, but who also encourage others to participate.
Ultimately, these people will know everything about LPOs as well as IPOs.

Dr Silvia Hodges is the director of research services at Connecticut-based technology business TyMetrix Legal Analytics and an adjunct professor at Fordham Law School in New York