The business leaders who are increasingly being tapped as important sources of leadership for the business functions of law firms, such as finance and operations, are a sign of the steady movement toward operating models in today’s law firms to are beginning to mimic those found in corporations.
These “legal” business leaders are different from the traditional conceptions of managing partners or finance partners. They are allied professionals brought into the firm not because they are lawyers who show a particular affinity for a particular aspect of managing a law firm, but because they are true professionals whose strengths lie in running a business. As such, they will bring with them perceptions of the legal market and strategies for building success that may differ from their attorney colleagues.
Indeed, how their view of the industry differs is a topic worth exploration, and to that end the Legal Executive Institute, in partnership with the Georgetown Center on Ethics and the Legal Profession and the Association of Legal Administrators, commissioned the inaugural 2019 Law Firm Business Leaders Report.
To quantify the attitudes and strategies from these professionals, we conducted an online survey that gathered results from 75 respondents chosen from among business leaders of law firms with 50-plus attorneys. These law firms were primarily U.S.-based.
You can download a copy of the full 2019 Law Firm Business Leaders Report here.
We asked respondents about where they saw potential threats to the profitability of their law firms, where they see the potential for growth, how they plan to improve performance, and how their firms are approaching and managing change.
Some of the key findings included:
- There is widespread recognition of a number of challenges facing law firms, including those coming from clients, from within their own firms, and from the economy in general.
- Law firm leaders perceive a noticeable divergence in how they — the people tasked with ensuring the long-term viability and growth of the firm — are willing to embrace and drive change compared with rank-and-file partners that may favor maximizing current compensation models over long-term investments.
- Most firms appear to be relying on trusted but perhaps dated strategies to improve performance while seeming are less likely to explore more potentially radical solutions like re-examining compensation or practice structures or adopting advanced technology to reinvent their legal service delivery model.
Overall, the responses provide an interesting look into how these business professionals approach today’s legal market. They also raise some interesting questions about possible paradoxes in the responses. For example, respondents are quite bullish on the possibilities for growth in both revenue and profits per lawyer at their firms, but they also are concerned about the chances for growth in rates, productivity, or realization on their bills. The report explores this and other questions about the responses in greater depth.