Are Firms Better Managed by Non-Lawyers?

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In light of the story about the ABA's proposal regarding firm ownership, it is both timely and prudent to examine the question of whether non-lawyers may be better suited to run law firms.

Little more than two years ago, General Motors, once regarded as the most successful company in America, had to file for bankruptcy and accept a government bailout. GM's management for many decades had been in-grown, and its legendary chairman, Alfred P. Sloan, had come to personify the concept of the "organization man" in the 1950s and 1960s.

But when GM's inbred management led it to failure, the GM board in August 2010 did the unthinkable. It named Daniel Ackerson — not a "car guy," but one who instead had run telecommunications companies and a buyout firm — to be the new CEO.

Today, not coincidentally, General Motors under Ackerson's leadership has returned to financial health, reshaped its organization and is again earning a reputation for product innovation. Is there a lesson here for law firms? Senior firm leadership is inevitably carried out by the lawyers themselves. There may be a CEO-managing partner (and chair of the Management Committee), and sometimes a chairman of the board (usually a former CEO-managing partner). Then there are department chairs, practice group chairs and office managing partners, all attorneys and all expected to manage the firm's business affairs while conducting their own practices. Are such lawyers always the best choices to improve client service quality, marketing performance, attorney training and development, and competitive effectiveness? The history of problems that major firms faced during the Great Recession suggests that the answer increasingly may be "no." Lawyers think like lawyers, not businesspeople, just as "car guys" think in terms of reliably running automobiles, not running a large organization that does more than simply build cars.

One major law firm is moving more toward the management model that General Motors finally embraced. DLA Piper, one of the largest firms in the world, has named as global co-chairman a former senior executive of Standard & Poor's. The new executive has international business and management experience that will be crucial to guiding a firm that, itself, is one of the most globalized in the profession.

The firm's announcement on the appointment stated that the new executive will have "a principal focus on improving financial performance and developing capability in key markets [and] will be actively involved with recruitment and client development." Sounds like a complete list of skills not taught in law schools.

Perhaps the legal profession is approaching reality in letting attorneys do what they do best — lawyering — and leaving management to professionals. At the very least, such a trend could involve engaging professional consultants or coaches who have walked in a lawyer's shoes (i.e., practiced law — DLA Piper's new executive previously had been at the giant UK firm Linklaters) and also have business experience.

The idea of having a business professional at your side, or at least available by phone, works in industry. It should not be limited to the mega-law firms; it can easily and effectively work in the legal profession for mid-size firms as well as sole and small-firm practitioners. Certainly, such non-lawyer managers need to become familiar with the ethical requirements of the Rules of Professional Conduct for firm administration. But, after all, isn't instruction in such detail what both staff and lawyers need?

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