Trends That Will Soon Confront Managers in Midsize Firms

by Joel A. Rose
 

Managing Partners in a great many midsize firms in particular, agree that the following internal trends, over which lawyer management may exercise total or some control, will continue for the next several years.

Trends:

(1)       Managing partners in the more enlightened firms will devote more of their time dealing with (a) developing the most appropriate approaches for delivering high quality legal services faster, better and less expensively; (b) the basics of managing financially successful professional business service organizations; (c) attracting and retaining lawyers who control profitable clients and who can attract potential clients; and (d) attracting and retaining a sufficient volume of business from existing and potential clients.

(2)       Partners’ attitudes about prevailing interpersonal values will affect the professional relationships among partners; and partners, associates and staff from “fraternal values” to “business values.”

(3)       Stronger centralized management in firms will include (a) increased accountability and less autonomy for partners; (b) greater emphasis on every partner being a “working partner’; (c) more merit-based compensation decisions; and (d) diminishing feelings about “entitlements” to partners by virtue of seniority.

(4)       Increased mobility of partners who control significant client business, including those productive and profitable partners and associates who support the former partners.  As a result, managing partners will devote more attention to developing strategies to attract and retain profitable lawyers.

(5)       Managing partners will devote more time performing strategic planning and managing substantive and business sides of their firms to provide quality, timely and cost-effective service to clients.

(6)       Law firms will employ sophisticated business managers with expertise in financial management and technology, human relations and administration to relieve lawyers of most of their involvement in administrative matters.

(7)       Technology will enhance the speed with which legal services are performed, thereby enabling attorneys to produce documents and communicate with clients at a faster pace.  Document management will include computer file storage, off-site backup and voice recognition software, etc.

(8)       Partners will become sensitized about the importance of client service and marketing to attract and retain clients.  The following have motivated managing partners to make organizational, structural and procedural changes in which their firms organize and manage client service and marketing: (a) an ABA study on the declining image of the legal profession; and (b) clients’ perceptions concerning services provided and their treatment by lawyers, not only the results achieved or the fees charged.  These include returning telephone calls; allowing clients to design their invoices; written service plans for major clients; client surveys; making it easier to contact attorneys by e-mail, home phone numbers on business cards, 24-hour night service telephone answering, etc.; client status reports; the notion of “guaranteed” service or reductions in the bill; law firms adding value to their clients and educating corporate and business executives through newsletters, seminars, direct mail and websites, etc.

(9)       To contain legal costs, more business controversies will be resolved by ADR, than litigation.

(10)     “Partnering” will be fostered between firms and their “better clients” concerning creating a working relationship that results in a mutual value to both the law firm and the client and risk-sharing in the outcomes; fees, costs and expenses; and investment in the matter with the client, etc.

Strategies for Dealing With These Trends:

(1)       Managing partners acknowledge that their firms will be in a buyer’s market indefinitely.  Hence, they will anticipate and respond to the needs and expectations of clients; and take steps to ensure that attorneys understand that legal services must add value to clients, and that billing will shift from cost to value-based.

(2)       Managing partners in financially and professionally successful law firms acknowledge the substantive and administrative sides of their practices will have to be managed in a “businesslike” manner to attract and retain high quality partners and associates; and to attract, retain and service profitable and growth-oriented clients.  Managing Partners will oversee the firm’s day-to-day operations; more and better leadership will be required to coalesce the attorneys and staff; reinforce partners’ and associates’ confidence about their firm’s future; think strategically about the firm; take the steps to retain productive and profitable partners and associates; maximize opportunities in core competencies; and identify opportunities that compliment and supplement current areas of expertise.

(3)       Better planning for the future.  Managing partners will think strategically, i.e., reach a consensus of the partners about the common goals for their firms generally and each substantive component.  Managing partners will need to identify what the partners want their firm to become, whether it has the resources to achieve these objectives, or if the firm has to acquire lateral hires with a client base.  They will establish common goals, and enhance the values of attorneys in the firm and their practice areas.

(4)       Managing partners will instill in attorneys the importance of client service and marketing as part of their firm’s culture.  Client needs and service will drive decisions these firms make affecting their clients.

(5)       Dedicated key client teams will be established consisting of attorneys with expertise in interdisciplinary substantive areas will provide services and enhance client relations and marketing efforts for each of their firm’s top fee-paying clients.  Each key client team, headed by a client relations manager, will focus on client relations, performing or coordinating legal services for their client, etc.  This includes: visiting key clients’, touring their plants, etc.; attending industry conferences; reading industry publications, maintaining a cross-disciplinary approach for servicing clients; obtaining industry news from the Internet; and sharing experiences of key clients.

(6)       Client service and marketing activities will become more targeted and focused on specific industries, i.e., teams geared to particular industries, clients and areas of specialization within industries will replace larger practice areas as the basis upon which law firms are organized and marketed.

(7)       Attorneys in midsize firms who possess expertise in particular industries are included as members of “industry committees” for attracting work from existing and potential clients within these industries.  In this regard, more firms are requesting their attorneys complete “attorney profile forms” that highlight the substantive, as well as industry expertise of each attorney to be posted as a resource on the firm’s information system.  Midsize firms will create marketing committees and partners whose objectives are to coordinate and oversee the marketing and client relations efforts of the leaders of the client service teams – generally and for the top paying clients – have assumed, and will continue to have greater prominence.  These committee members will be expected to identify potential clients for development, the proliferation of work from existing clients and the cross-selling of the firm’s expertise, etc.

(8)       Partners and associates in midsize firms will be required to prepare personal business plans based upon their areas of practice, talents and abilities.  Attorneys having the ability and interest in business development will be given the opportunity to develop additional business; their annual billable hours and dollar budgets are reflective of the decision to allow them to spend more time marketing, etc.  Many midsize firms will include in their compensation criteria the extent to which partners have achieved their business plans.

(9)       Midsize law firms will increase their allocated budgets of time and out-of-pocket expenses devoted to marketing.

Successfully Addressing Trends:

How effective a firm’s lawyer managers will be in addressing these trends will depend, to a great extent, upon the partners’ willingness to reach a consensus on shared values; their willingness to establish a sense of professionalism and common courtesy among themselves and other partners associates and staff; whether lawyer management has a vision for the firm, or if there are as many visions as there are partners; and the extent to which the lawyer manager is willing to communicate with the partners – from the bottom – up, as well as from the top – down.

©1999-2015 Joel A. Rose & Associates