Law firm CEO – a profession on the up?
Publicado em 13/02/2015
“Let the lawyers practice law and leaders lead”. The concept evolved in the United States, where several law firms have appointed real CEOs to lead them. Is this a trend?
Law firms are businesses, first and foremost
In a form of mimicry, law firms have become real businesses, with their structures resembling those of their clients. For all that, is it wise for law firms to replicate classic corporate governance? More and more firms are choosing to integrate general services such as HR, IT, marketing & communication and business development, supporting lawyers by leaving them to concentrate on their job, i.e. the law. Given that a lawyer is no more a marketing specialist than he is a sales expert, what legitimacy would he have in taking the best decisions on these subjects, which are so different from his main activity?
The managing partner as leader – not such a good idea
With regard to governance, the solution adopted almost systematically by law firms has been to appoint a managing partner. As experience is often invoked as a guarantee of leadership, many law firm founders or partners approaching retirement age therefore find themselves at the head of the firm. But can a person be technically excellent, commercially strong and a leader inspiring his teams, all at the same time? It is inconceivable in the business world, so can it become the rule for lawyers? In the legal world, a de facto segmentation has been established, based on the dogma of technician/colleague, partner/vendor and managing partner/leader. This situation creates a deadlock for many firms: lack of a business plan, change in the firm’s strategic vision, growth threshold reached, difficult succession, key partners leaving or difficulty in retaining talent and clients. The development of strategic consultancies dedicated to law firms is an admission of the weakness of many managing partners. This need for external consultants who are expensive and often not very efficient must be brought in?house with the arrival of non-lawyer managers.
Lots of firms are on a dead-end : lack of a business plan, change in the firm’s strategic vision, growth threshold reached, difficult succession, key partners leaving or difficulty in retaining talent and clients.
CEO, an effective response…
Scott Green, one of the first non-lawyers to have taken on the role of CEO of an American law firm (Pepper Hamilton), says that “firms must increasingly analyze their performance, set targets and have a more scientific business approach”. His role as CEO involves setting the strategy and overseeing his firm’s back-office operations, without interfering in the work or legal performance of the lawyers, which is the responsibility of the managing partner, who is himself a lawyer. This position of non-lawyer CEO also finds favor with Michael Reynolds, President of the International Bar Association (IBA) and partner at Allen & Overy. As a fan of the principle of non-lawyer managers, he says that “a firm of 4000 lawyers such as Allen & Overy must have a clearly defined strategy, which requires professional managers”. The function of CEO within law firms is therefore to bring a managerial and business dimension to defining, implementing and pursuing a development strategy. Bringing in his/her competencies enables the firm to pass into another dimension while adopting a model closer to that of its clients.
… but a controversial one
Clearly the role of CEO can only apply where the firm is of a minimum size and has a large number of offices and lawyers. In the short term, there is no risk that CEOs will appear in all law firms. Also, the few appointments that have been made have met with a qualified response from some barristers. In Texas, for example, a notice issued by the Bar’s ethics committee forbids the use of titles such as Chief Executive Officer or Chief Technology Officer for non-lawyers, on the grounds that the use of such terms implies that the individual has significant, even complete, control over the firm. Michael Reynolds also states that “having a CEO remains the exception to the rule, and the traditional law firm model is holding up particularly well “.
H.W (@hugo_weber)