This is the first in an occasional series of Q&As with the leaders of midsized law firms in New Jersey, whom the Law Journal asks to provide management insights and other perspectives on a range of topics.
It’s been roughly two years since Connell Foley’s installation of a new managing partner, Philip F. McGovern Jr., who has spent decades with the firm and since 2002 had been manager of its Jersey City office. At the time he was elected, he set a goal to “continue with the measured growth” of the firm, and cited balancing management duties and his real estate practice as the biggest potential challenge. Since then, the firm has seen several changes—including the relocation of its Roseland headquarters to a space that McGovern says provides a “heavy emphasis upon collaborative work,” as well as the loss of a group of Newark-based attorneys. Now, says McGovern, increasing revenue, “while not a ‘threat’ … remains a continuous challenge,” and cybersecurity law and real estate are seen as areas of opportunity.
The responses below were given in written form and edited only for style.
How big is your firm, where is it located and what are its primary areas of practice and focus? Presently we have 132 attorneys with offices located in Roseland, Jersey City, Newark, Cherry Hill, New York City and Philadelphia. Our primary areas of focus are commercial litigation, insurance defense and coverage litigation, real estate and land use, taxation and estate planning, environmental, construction, corporate and banking, cyber security, white collar criminal defense, professional liability, aviation law, alternative dispute resolution, public finance and employment law.
Please explain your firm’s governance structure and compensation model. Connell Foley is governed by an Executive Committee and a managing partner. The firm’s compensation model is based upon an annual allocation of percentage interests derived from multiple-year averages of partner productivity and other numeric tools. We also conduct a review of each individual partner’s contributions to the firm by way of firm management, administrative effort or other functions important to firm life.
What do you view as the two biggest opportunities for your firm, and what are the two biggest threats? Cybersecurity law is a quickly developing and significant area of opportunity for our firm, as is the continuing development of the real estate marketplace. One threat, which certainly is not unique to us, is the uncertainty of the economy in 2018. And, while not a “threat,” increasing revenue remains a continuous challenge.
After the recession hit, the prevailing theory was that midsize firms would start to see more work come their way from large clients who could no longer justify paying Big Law rates. What has been your experience? Irrespective of the recession, Connell Foley has seen a roughly 4 percent annual growth rate on a net per capita basis. Our rate structure has always been exceptionally competitive for a firm of our size and as a result, we have maintained client relationships that have lasted decades.
Are your clients pushing for more alternative fee arrangements, and if so what types? Is your firm amenable to those requests? In certain of our firm’s practice areas, we have undertaken alternative fee arrangements, particularly on the transactional side of the practice. We are amenable to these requests if they make sense to both the client and our firm.
There is much debate around how law firms can foster the next generation of legal talent. What advantages and disadvantages do midsize firms have in attracting and retaining young lawyers, particularly millennials? Midsized firms have an advantage by being able to offer a broader range and depth of experiences to young attorneys, as well as being a bit more flexible with work schedules. We are cognizant that the work/life balance is important to millennials, bearing in mind that it needs to be just that, a balance.
Does your firm employ any nonlawyer professionals in high-level positions (e.g. COO, business development officer, chief strategy officer, etc.)? If so, why is it advantageous to have a nonlawyer in that role? If not, have you considered hiring any? We have a chief operating officer, vice president of marketing, vice president of business development, director of human resources, controller and a director of operations. Having non-lawyers in these roles brings a different dynamic of thinking to the table. Most, if not all of these professionals, are goal- and result-oriented whereas lawyers tend to think of matters in time orientation, fixed schedules and fixed dates.
What if any technology advancements have you made in your firm in recent years? What are the challenges in implementing tech changes? Connell Foley has always been a champion of adopting emerging technologies to help streamline our business practices. In recent years we have implemented VOIP telephony, mobile device management, state-of-the-art conference rooms and cloud computing. As part of our technology business model, we realize that with new implementations of technology comes a learning curve, which is why we provide continuous professional development and education that has helped us transform the way we conduct business. Finally, being proactive in the cybersecurity awareness field continues to be an ongoing initiative with the firm. Incorporating dual authentication methods for all remote firm network access and laptop encryption are just a couple of controls implemented to protect proprietary electronic data.
What would you say is the most innovative thing your firm has done recently, whether it be internal operations, how you work with clients, etc.? While it may not be viewed as “innovative,” our firm pursued a substantial change in its work environment with the design and build out of our new 72,000 square foot headquarters in Roseland. Our workplace went from a traditional mahogany and leather look to an all glass, modular/modern furniture design with a heavy emphasis upon collaborative work and conference areas. It is a significant change in our environment, and yes, one could call it “innovative for Connell Foley”—but the good news is the change has been exceptionally well-received.
Does your firm have a succession plan in place? If so, what challenges do you face in trying to execute that plan? If you don’t currently have a plan, is it an issue your firm is thinking about? Our firm has built in succession plans in its partnership agreement by limiting the length of time the managing partner may serve in this role, as well as requiring rotation of our Executive Committee members. To date, there have been no challenges in executing these plans.