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Are you a law firm executive? Do you feel underutilized by the partnership you serve? You’re not alone.
A survey released Wednesday by ALM Intelligence found 39 percent of the growing law firm executive ranks did not feel they played a pivotal role affecting the future of their firms.
But there were other signs that these executives are making progress. For instance, 65 percent of respondents said they attend executive committee meetings—13 percent said they cast a vote; likely reflecting the number of respondents who were also partners.
There is no doubt law firm management roles for nonlawyer professionals have blossomed over the past decade. But the survey shows that some firms still struggle with empowering those professionals to manage increasingly complex businesses. Giving C-suite executives greater influence is the last and perhaps most difficult step in the industry’s long slog away from being managed solely by lawyers.
“A lot of these executives do feel underutilized still, and they are underutilized still, in many respects in some firms,” said Amanda Brady, global practice leader of recruiting firm Major, Lindsey & Africa’s law firm management practice. “Certainly their voice carries a lot farther than it used to. And it’s still changing, but firms and management committees are still struggling to frankly let these people do everything they could do with their skill set.”
One way a managing partner—whom these C-suite execs typically report to—can help get the most out of these positions is by highlighting the work they do to help the firm, the report said. For instance, one managing partner presented to the executive committee a list of all the new clients the chief marketing officer’s team had helped bring in during the quarter.
“The next piece for a lot of firms is to say, ‘Let’s bring these people into the decision-making process,’” said Nicholas Bruch, a senior analyst at ALM Intelligence who authored the report.
The report also said the increasing importance of the chief marketing officer has been the best example of the rising importance of the C-suite. Marketing professionals are now tasked with business development and winning new business. Their budgets have grown, according to the survey, into the millions. Seventy-one percent of respondents had annual marketing budgets of more than $2 million, and 14 percent had budgets larger than $10 million.
Carol Crawford, a managing director at J. Johnson Executive Search Inc., said marketing positions are more highly valued now that they are more central to client relationships.
“Law firms have to be much more strategic and competitive in order to thrive and survive, so they’ve invested in that marketing and particularly business development function,” Crawford said. “They earned that seat at the table, and it was definitely something you had to earn as opposed to a given.”
Another role that has been acutely ascendant within the last five years is that of the pricing director, which helps firms analyze the cost of their services and price them accordingly.
Am Law 200 firms have added pricing directors by the double digits each of the past six years, according to Patrick Johansen, a certified pricing professional who tracks the hires of pricing professionals at his blog, patrickonpricing.com. The blog currently lists 147 pricing professionals, including seven with the designation of “chief” in their title.
“The message firms are sending by elevating the pricing function to the chief level is highlighting the critical role pricing does play and should play in the future of the firms and the industry,” said Johansen, who works in a nonpricing role as a practice director at Seyfarth Shaw. “A large part of that is driven by our clients who are looking for, pushing for and encouraging law firms to reconsider how they price their services.”
The ALM Intelligence report also found that law firm C-suites lack the diversity that even law firm partnerships have managed to attain. While 41 percent were women, only 2 percent were black. Ninety-eight percent of the respondents were white.
The report also asked about compensation. Twelve percent of respondents said they expected to make more than $1 million, while 52 percent make less than $500,000.
Want to hear more from C-level officers at America’s largest law firms? This data was provided by ALM Intelligence, a provider of detailed business information and competitive intelligence about the legal industry. Click here for more on this report.