While meeting with a group of managing partners in Philadelphia a couple of weeks ago, I was asked how much time most managing partners devote to those duties rather than their role as a practicing attorney.
For midsized firms, the range is between 25 and 30 percent of their time. The question is, is that adequate? It either is or it isn’t. It depends on the circumstances, including the firm’s objectives and strategies.
While I began my career as a professional, my role quickly shifted to the business side. Management of Juris, Inc., for example, was a full-time job when we only had nine employees. Why would a nine-person enterprise require full-time management? It was because we didn’t have plans to remain a nine-person company servicing only a handful of law firms. We had plans for bigger and better things.
That is the perspective that has to be applied to the law firm. If the firm is where it wants to be from a strategic and size point of view, part time management may fit the bill perfectly. As a firm grows, however, it will become increasingly important that the organization has capable people heading up its functional areas—accounting, administration, and technology.
For a firm committed to an aggressive growth strategy or undergoing significant change, having a part time CEO falls short of what is needed to succeed and avoid missteps that could endanger the firm. It was interesting to read of contrasting differences in the management lineup of the would-be merger partners Orrick, Herrington & Sutcliffe and the firm of Dewey and Ballantine. Neither of these two big law organizations are midsized firms, of course. But they illustrate the issues. The CEO of the more aggressive Orrick devotes 100 percent of his time to the management role; whereas, Morton Pierce, heading up Dewey, billed 3300 hours on client work during 2006 according to Nathan Koppel at the Wall Street Journal. The marriage has fallen apart and Dewey, recoiling from the damage arising from the attempted merger, is struggling to adjust its management resources to adequately respond to those changes.
The point is that part-time management may work while things are stable and running along on automatic pilot, but attempt to implement new strategies or other significant changes and part-time management is likely to cost the firm the race.
It is apparently very hard for partners to muster the leap of faith necessary to make the investment in a full-time CEO. It seems equally difficult for most successful attorneys to substitute their book of business annuity for a management position where their future income depends on the continued support of firm owners—the partners. However, look around at the business world. You will find very few “part-time” CEOs.
The most important job of a CEO is the process of continually building a new enterprise for a new future while producing income levels sufficient to attract and retain needed talent and adequately reward for the risk of ownership. Doing that, doing the right things and seeing to it that those things are done right, is a full-time job outside of the legal community. From the outside looking in, it is hard to see why it should be any different for a law firm.
Morepartnerincome.com is sponsored by Juris, Inc. For information about Juris® products and services for increasing law firm performance and partner income, go to www.Juris.com.
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Filed under Management by Tom Collins
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