NEW YORK — In the decade since the financial recession, how has the law firm business model evolved — and what have chief operating officers and executive directors done to help that evolution? A panel of law firm leaders debated this topic at the 16th Annual Law Firm COO & CFO Forum, sharing lessons learned from working within their own firms, on how to help bring along their lawyers and staff in changing how service is delivered to clients.
Members of the panel, titled Boats Against the Current: The Evolving Law Firm Business Model, noted that attorneys are taught to look for risks and advise clients on how to avoid them, but this can result in a firm’s partners resisting change. “There are only two types of lawyers: those who don’t like change, and those that absolutely detest it,” joked Dr. James Perkins, COO & CCO at Procopio, Cory, Hargreaves & Savitch.
Indeed, Jeffrey Connor, CFO of McGuireWoods, noted that a key task for the C-level — be it the COO, CFO, CIO or CMO — is to recognize which attorneys fall in the latter category (of abhorring change) and ensuring that even if they won’t champion the firm’s efforts, at least they won’t serve as a roadblock. “You can have a rainmaker who doesn’t care about how the firm runs and you maybe can’t make them do anything to help, but you can ask them not to be a problem,” Connor said. However, it’s important that firm leaders recognize the key partners who are receptive to innovation and work with them, he added. “We have to identify the key partners within and outside management, guide them on the change, recognize what is doable, and give them the tools to implement it,” explained Connor.
Sullivan & Cromwell Executive Director Karen Braun disclosed an easy way to identify key partners to enlist in effectuating change: “Just understand which partners are the finders, grinders and minders,” she said. “If you can find a partner who is all three, those are the partners who will make a difference in your firm.” Connor agreed, and said he’s also noticed a possible generational change in law firms’ leadership resulting in lawyers who are more collaborative and more open to asking for help.
The voice of the client can serve as the greatest driver of change in law firms, panelist observed. But as Procopio’s Perkins noted, attorneys are not always great at talking to clients and soliciting their feedback; but that practice can be valuable for firms, not only serving as a motive for change but also resulting in higher retention and even cross-selling. Hal Stewart, COO of Wilson Elser Moskowitz Edelman & Dicker, described how his firm took a page from the playbook of the Big 4 accounting firms and developed client service teams to ensure the law firm was soliciting feedback on the value it was providing to clients and adjusting if necessary.
Sullivan & Cromwell’s Braun agreed, adding that law firm growth can’t reflect the mindset from the popular movie Field of Dreams: “Whether you’re considering if you should open an office in Brussels or expand your Brexit practice, you must speak to the client and have them be the driving force” she said. “You can’t just build it and expect them to come.” A law firm is a partnership and a profession but at the end of the day it is a service business, and firms must ensure clients find value in the service they’re receiving, the panel explained.
Further, COOs and EDs can play a big role in communicating a firm’s value to its clients, panelists said. Michael Caplan, COO at Goodwin, noted that most corporations have COOs but don’t always have dedicated or heavily staffed knowledge management, IT or risk departments. So, bringing those professionals from your team into meet with clients can introduce tremendous value that the firm doesn’t even have to charge for. “We help them implement e-billing and our leverage model, and teach them how to ask law firms about profitability,” Caplan said.
Wilson Elser’s Stewart said that after noticing clients disaggregating legal services, his firm both developed their own low-cost paralegal service center and hired a Lean Six Sigma expert to train all their attorneys. “It was most important to show value to our clients while also maximizing profitability,” he added.
The panel observed that technology also plays a big part in delivering value to clients. Wilson Elser has embraced disruptive technology, Stewart explained, even developing their own if it will bring value to their clients. Braun described how Sullivan & Cromwell holds ideation sessions, soliciting attorney feedback on new technologies, and gaining a lot from its Millennial attorneys.
Perkins noted that Procopio uses technology to improve its profitability, enhance efficiencies and tweak staffing ratios, but doesn’t just look to their network of clients for guidance on new technologies. “We made a conscious decision 10 years ago to move to working with large national global providers, to use their knowledge to help us grow,” he said. “We’ve moved away from looking at vendors as a mere cost, but more as a partner who has knowledge of us and can help us be better and deliver better service to our clients.”