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Few businesses have changed as dramatically over the past 20 years as law firms. In the space of two short decades, the legal services sector in the United States has evolved from a highly regulated and inefficient market to one characterized by aggressive competition and tremendous growth. Despite these changes, little attention has been paid to creating educational settings for law firm leaders, managers, and executives to explore — in a thoughtful and systematic way — the unique challenges of running complex professional service businesses. To meet this need, Hildebrandt International and the College of Professional Studies at George Washington University have formed a strategic partnership to begin work on the development of a comprehensive degree program in the management of law firms and other professional service businesses. The program, which is expected to launch in 2005, is intended to provide administrators with the tools to manage the special environment and unique challenges inherent in professional service firms. A RAPIDLY EVOLVING MARKET Today’s legal market is vastly different from the simpler — and some would say more genteel — world of the 1970s. One of the most obvious changes in the profession has been the extraordinary growth in the size and complexity of major law firms. Fueled in part by the growing segmentation of the legal market and in part by the imperative for exponential growth that is “hard wired” into the economic structure of most firms, U.S. law firms have grown at an astonishing rate over the past 20 years or so. In 2003, the average size of the largest 250 law firms in the country was 440 lawyers — up from 95 lawyers in 1980. Indeed, in 2003, there were 92 U.S.-based law firms with more than 400 lawyers and 13 with more than 1,000 lawyers. These firms have also become more geographically dispersed. In 2003, U.S. firms with more than 400 lawyers averaged 12 offices each, while firms with more than 1,000 lawyers averaged 24 offices each. As firms become increasingly large and complex business enterprises, many have been compelled to rethink their management structures and strategies. This too has represented a profound change for the profession. Increasingly, firms have realized the need for strategic focus and have come to view effective practice management as the essential mechanism for implementing their objectives. As a consequence, at least at larger firms, there has emerged a close alignment of central management with the operation of the firms’ primary business units — the practice groups. Firm management now typically appoints and exercises oversight for practice group leaders, reviews and approves practice group business plans, relies on practice leaders for input in advancement and compensation decisions, and depends on practice groups for implementation of essential elements of firm strategic objectives. In short, in many firms today, practice management is an integral part of the overall management function, and practice groups are the primary vehicles through which firms are positioning themselves in the market. At the same time that law firms have become more focused on practice management, the governance and management structures of firms have become more centralized and more “corporate” in their look and feel. Increasingly today, at least in firms of any significant size, key strategic and management decisions are concentrated in relatively few hands. Persons holding jobs as managing partners or chairs of their firms increasingly function like CEOs; policy or management committees increasingly function like corporate boards of directors; and the number and range of decisions reserved for action by the “full partnership” (or by “all shareholders”) have been reduced considerably. Additionally, law firms now routinely hire experienced nonlawyers in a variety of key management positions, from executive director (or COO) to CFO, and from CIO to director of human resources. And these nonlawyers are increasingly being vested with the authority to manage the affairs of the firm including, in many important ways, the activities of the lawyers themselves. Moreover, senior nonlawyers are now often included as full voting members of management or policy committees. THE BUSINESS OF LAW In short, law firms increasingly look and function like the large and complex businesses that they are. However, issues relating to the management of law firms or legal practices are wholly ignored in traditional legal education. There is virtually no focus on such issues in law schools, and apparently little interest on the part of law school faculties in the subject matter. Most law schools proceed in a vacuum, as if law firms and formal legal practices did not exist and as if the “business” of law was wholly irrelevant to their graduates. Historically, the management needs of law firms and other professional service businesses were also largely ignored by business schools. The recognition that traditional management principles often do not apply in the setting of professional service firms has been a relatively recent development, and academic attention in business schools is really only now beginning to focus on the unique challenges of organizing and managing professional service enterprises. As a consequence, academic research on the functioning of professional service organizations remains comparatively sparse, and our understanding of these complex structures lags considerably behind our understanding of more traditional forms of business enterprise. There are today very few options available to anyone desiring to engage in a serious study of the structure and management of professional service firms in general, or of law firms in particular. The University of California, San Diego, and a few other institutions offer certification programs for legal administrators; Harvard Business School and the Wharton School at the University of Pennsylvania offer one-week workshops for leaders of professional service firms; and shorter seminars and workshops are offered by the McIntire School of Commerce at the University of Virginia and by consulting firms such as Hildebrandt International. Most of these programs, however, have been developed as executive education offerings and not as degree programs. Consequently, few provide the time or opportunity for comprehensive, in-depth study of the structural and management issues confronting law firms or similar enterprises. And, with the exception of one master’s program for legal administrators offered by Marymount University, none offers the possibility of a graduate degree. It is precisely to meet this need that Hildebrandt and GW teamed up to design a degree program focused on the management of law firms and other professional service businesses. As currently envisioned, the program will consist of a series of graduate certificate offerings, each covering a core area of study. Students would be able to enroll in one or more individual certificate programs or to combine all of the programs to earn credits toward a master’s degree in professional service firm management. Although the curriculum for the program has not been finalized, the core courses will likely cover such key topic areas as: � Developing and implementing successful long-term strategies. � Understanding and responding to the behavior of professionals. � Designing successful structure and governance models for professional service firms. � Unique challenges of leading professionals. � Managing human resources. � Understanding the economics and finances of professional service firms. � Managing information technology and knowledge management systems. � Implementing successful marketing strategies. � Developing effective practice management systems. � Dealing with issues of globalization. Students would not be required to be full-time participants in the program. Indeed, the program will be specifically structured to accommodate the needs of busy professionals. We see the potential constituents of the program as including persons (both lawyers and nonlawyers) currently serving in key leadership, management, or executive staff positions in law firms, or persons who aspire to such positions. Although still being designed, the program will probably combine elements of distance learning with requirements for short periods of residence at the university’s campus in Washington — e.g., for four or five long weekends per year. Faculty for the program will be drawn primarily from various schools at George Washington University, as supplemented by experts from Hildebrandt and guest lecturers from other academic institutions and other organizations. Given the changes in the market for legal services, it’s time for a serious academic program to address the unique challenges of leading and managing the large, geographically dispersed, and complex businesses that most large law firms have become. James W. Jones is a director of Hildebrandt International and a former managing partner at Arnold & Porter. He can be reached at [email protected] .

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