Only a few decades ago, even the largest, most respected law firms had a relatively small number of lawyers. Baker & McKenzie employed 500 attorneys in 1979. By 1987, that number jumped to 1,000. Today, the firm employs more than 4,100 lawyers. Indeed, many firms have focused their efforts on expansion and have opened offices around the world.
Correspondingly, law firm structure has shifted to accommodate practices’ growing international demand and large staffs. Previously, top firms were a true partnership: all for one and one for all, with a managing partner who was more involved in running the firm. Firms frequently sought out retired military personnel or public accounting professionals to manage the “back office” of the firm. The role was certainly not a strategic one.
As firms have evolved in size, reach and complexity, so has the need for seasoned executives to manage the business of law.
Here are five tools that today’s Am Law 100 Chief Operating Officer (COO) is expected to bring to the role.
1. Global business experience. Large firms regularly open several new global offices a year to better serve their clients. Opening and sustaining an international office requires familiarity with that country’s government, culture and economy.
A deep knowledge of currency, employment regulations and partnership requirements is necessary to guide a firm through the process of recruiting talent and developing the business. A well-worn passport also helps a COO candidate obtain cultural sensitivities that can be crucial for running an international business.
2. An understanding of competitive pricing models. A growing number of firms are being pressured by clients to take a more pragmatic approach to fees or consider an alternative pricing strategy. Now more than ever, law firm leadership must be flexible, nimble and creative with regard to attorney productivity and budgeting.
3. Experience with mergers, joint ventures and alliances. A firm COO must have the acumen to evaluate firm growth strategies including mergers, acquisition of new practices and affiliations—domestically and globally. Following a merger, chief operating officers lead the due diligence to bring two firms together and integrate culture, clients, practices and profitability.
Additionally, more firms are becoming Swiss vereins, meaning that firms operate independently even though they all belong to one overarching association. An effective COO must have the business knowledge, political savvy and cultural sensitivities to evaluate such a decision and function in a new business environment.
4. The ability to manage a high-performing, specialized senior management team. The modern firm’s senior management team may include a chief financial officer, chief marketing officer, chief human resources officer, chief information technology officer and/or a chief knowledge officer. In the last decade, firms have increasingly reached outside the legal industry to recruit strategic, business-minded individuals for C-level positions.
A successful, strategic chief operating officer should understand how to recruit and lead a highly talented executive team with diverse backgrounds and skill sets.
5. Expertise in day-to-day managment. A COO must ensure that the firm is adhering to best practices and providing a robust and efficient infrastructure so their lawyers can provide the best legal representation to their clients. Tactically speaking, this means that the COO should have a working knowledge of technology trends, talent development and retention, financial planning and budgeting.
How can growing firms find an individual who can navigate the challenges of a rapidly changing legal industry? Look for the skills above, though know that no cookie cutter recipe exists for COOs. Each firm requires a leader with different specialties, and finding the perfect match for a firm’s unique culture requires hard work and research. The challenges and demands of this role will undoubtedly continue to evolve as firms themselves change.