Adding extra dimensions to firms

In the competitive legal environment, law firms can no longer rest on their professional laurels and must look to the very heart of their business to ensure their long-term profitability. Many are looking to adapt their traditional management structure to better align with the business demands and opportunities of the corporate world.Jacquie Macdonald, head of corporate development at Blair Cadell Solicitors, assesses changing attitudes to law firm management and in particular, the effectiveness of introducing non-legal personnel to the management team.

When management expert, Professor Meredith Belbin[1] published his research into team dynamics, he came up with some interesting insights into the workings of the boardroom. Belbin concluded that organisations comprising solely of people with high intellect or similar personalities prevent an organisation from operating effectively. Given this finding, there are some interesting lessons for the legal profession as it takes on the challenges of the twenty-first century marketplace.

The profession as a whole has a tendency to be cautious when it comes to addressing and implementing change, but as the market becomes increasingly competitive and complex there is a need to grapple with these issues. Often this means a change in the management of the practice and this is where Belbin’s theories have a far-reaching impact for law firms.

Tests proved that groups made entirely of professionals with similar skills were unable to complete relatively simple group tasks. Belbin argued that when groups comprised of similar individuals, the group dynamic was affected, and consequently failed in completing the tasks. Similarly if groups contained members with a level of high intellect, he discovered that the challenge simply became a platform for the individuals to demonstrate their intelligence.

From this it is suggested that, in its management, any form of organisation would be well advised to adopt individuals that offer a balance of skills.

This certainly focuses on the effectiveness of the management of the traditional legal partnership. The legal profession is changing and increased competition for client work across all sectors now means that unless a firm has an effective management structure in place, it may suffer.

Effective lawyers do not necessarily make effective managers, especially when confronted with aspects ranging from human resources, IT support and marketing, combined with responding to client needs. In order to combat these problems, firms are bringing successful business managers into the boardroom. From their objective point of view it can be seen that running a law firm offers similar challenges to ones faced in the business world as a whole and such managers are capable of using that objectivity in order to improve the productivity and effectiveness of the firm, as opposed to possessing a working knowledge of the law.

Some firms have been successfully combining the traditional partnership model with a structured board set-up, made up of legal knowledge and non-legal business expertise. In such firms, the responsibility for decision-making does not simply lie with the partners, but is shared across the management team.

A board combining business acumen and legal expertise can give firms extra dimensions, but unless the organisation is willing to accept change this direction may not in itself be necessarily fruitful. Partners are often used to being responsible for making decisions about the firm, but if they are willing to relinquish some of this power and accept that they may not be the best informed people to make a judgement about a particular issue, then there could well be a positive impact upon the firm.

Key areas such as developing the positioning and strengths of the firm can be neglected by the partnership, simply because this is not an area where they possess a great deal of knowledge. Many solicitors still believe that marketing is about buying advertising space and that public relations is about getting your name into the paper. Similarly, business management is run rather by the ‘gut feeling’ of the partners, rather than through a fully developed strategy.

Areas such as internal communication within the firm, marketing and the development of a strong corporate identity are all vital in ensuring the firm’s success. Bringing marketing professionals and business strategists to the firm allows it to offer new products and services and a greater level of efficiency and client care.

Adopting a business approach to the running of the firm does not offer a quick fix to all challenges, but it does enable the firm to address the fundamental underlying issues. For example, few solicitors would agree that areas like conveyancing offer the high-level of returns that were available twenty years ago. Deregulation of the industry has forced prices down and while it is often still possible to make residential conveyancing profitable, this can only be achieved if an effective management infrastructure is implemented.

Combining legal and non-legal expertise allows the practice to help develop a strong corporate identity as well as enabling clear communication patterns to occur within the organisation, allowing the organisation to operate more effectively and help to improve services available to clients.

The combined pressures of undertaking client work and managing the practice means that partners, particularly those in smaller firms lacking the resource pools of larger corporate organisations, simply do not have the time to devote to developing a marketing strategy or review the IT infrastructure of the company. However, business experts can excel in these areas and they ultimately help to ensure that the firm becomes more commercially effective.

The importance of these developments is in their impact upon the contribution of the whole team, through improved internal communication and the implementation of initiatives such as Investors in People[2], as well as those prompted by individual team members. People may be intimidated by sharing their thoughts and ideas with partners of the firm, but are often willing to contribute to managers without a legal background. This can help to address issues and problems before they arise as well as helping to ensure that team members do not feel unable to progress within the firm. Non-legal managers help to give team members something aspirational without necessarily having to undertake a law degree and become a solicitor.

When I joined the Blair Cadell management team, I was the first person without a legal background to become part of the board. Soon after I joined, I noticed that non-partner managers and other staff began to approach me with their own ideas about making the firm more effective. Because they were involved in the day-to-day running of the services offered, they often possessed a greater awareness of the issues facing the firm. However, many of the members of staff were reluctant to share their views with the partners of the firm, simply because they felt their opinions were either not taken seriously, or they didn’t feel confident enough to approach them. Employing non-legal expertise helped to bridge this gap and has since helped to improve communication throughout the firm.

Today, it is essential for solicitors to run the practice as a business, if they are to remain successful. The legal profession as a whole has been forced to evolve and adapt to the needs of its clients.

Clients demand high quality services and if a firm cannot fully meet their expectations, then it is more than likely that they will take their business elsewhere. Many clients today expect solicitors to provide a legal service that is instantaneous and often demand to know where their money is being spent. This is a reflection of greater changes in the market as whole.

We are seeing deadlines reduced to a matter of days rather than weeks and it is likely that in the next few years, with the dawn of e-conveyancing looming, this could be reduced even further. Fee structures are also changing. Fixed fee services and greater demands across all sectors place increased demands on law firms. Today, it is still possible for small firms to compete against larger competitors, provided that an effective management infrastructure is implemented.

Professor Belbin would recognise that while there is still a need for change within the legal profession as a whole, the management changes being taken by some firms and the increased uptake of non-legal expertise in the boardroom are helping to improve the effectiveness and quality of services offered by solicitors.

Jacquie Macdonald is the head of corporate development at Blair Cadell Solicitors. She can be contacted at jacquie@blaircadell.com

[1] For the last 20 years since the publication of Management Teams, Why They Succeed or Fail, Meredith Belbin has been the name in the dynamics of workgroups. He has advised the OECD, the US Department of Labor, the Commission of the EEC and many manufacturing companies and public organisations.

[2] Investors in People is a national standard that sets a level of good practice for training and development of people to achieve business goals.