Can you tell us a bit about your career path into law firm management?
I’ve been a lawyer for 25 years, practicing law for 10 years and then in various management roles. But it hasn’t been a very straight line. My early experience includes everything from being a deckhand on a Greek freighter to a salesman in New York’s Garment District. I was at the University of Virginia working on a doctorate in English Literature when I had a kind of damascene moment: I would go to law school and write novels. Not so intuitive, but I moved across campus to the law school, spent 10 years at Debevoise as a securities litigator, and saw my first novel published as a fifth-year associate.
I left the law to be Executive Director of a nonprofit running inner city schools in Baltimore, and then came back as Chief Administrative Officer of LeBoeuf Lamb. I was active in the merger integration with Dewey Ballantine and then Chief Business Development & Marketing Officer of the combined firm. Today I am CMO of Whiteford, Taylor & Preston.
What is the biggest change you’ve seen in law firms?
Clearly there have been a lot of changes, but the biggest may be in the pressure firms are feeling to re-think their business models.
Everyone seems to agree that changes in legal services are fast-moving and not over by a long shot. There may be less of a consensus on where it’s all going. For a law firm trying to get its bearings in 2016, what does a SWOT analysis look like?
It depends on the firm, of course, but I can try to answer for law firms generally. The great strength is in a highly trained, global talent pool. But the profession still struggles with significant weaknesses in the business model. For firms where compensation, hourly rates, billable targets and partner retention are inextricably wound together, growth almost surely depends on an ability to evolve away from a legacy business model.
So is that the opportunity? (To find a new business model)
For many firms, yes. Maybe most. I would frame it differently, though. Changes to a business model aren’t plucked out of thin air. They really have to follow a differentiation analysis. The starting point will be an understanding of what differentiates a firm, any firm, in a crowded market.
Does that mean there’s room for more than one business model?
Sure. I assume there will be multiple business models, running the gamut from boutique to elite and including an array of alternative providers. But more interesting will be how many firms the market has room for in each category. We could be heading into a very big sort.
Going back to the SWOT analysis, is there one threat that stands out?
I’ve alluded to a couple already, but one that stands out starkly is the sheer pace of change. Law firms don’t have a lot of experience adapting quickly to changing business environments.
We’re seeing firms reach more and more into the business world for the necessary experience to help manage the changes. That includes recruiting from accounting and consulting firms that are big and complex enough to have succeeded in change cultures.
Are law firms evolving in the direction of big accounting firms?
If you’re asking whether law firms will become more recognizably corporate, then, yes, if only because that’s what clients need them to be. Big accounting firms are interesting because they evolved into substantial corporate entities, and, like law firms, their business happens to be professional services. The more interesting question is the extent to which big accounting firms will displace traditional law firm providers. The UK’s Legal Services Act opened the door to delivery of legal services by accounting firms. If the market outside the US shifts significantly away from traditional law firms, the US legal profession may have no choice but to adapt.
You once pointed to Axiom as evidence of true innovation. Do you see other examples?
The way people are talking about innovation is changing. For a time it almost seemed as though what mattered was innovation for innovation’s sake, but the stakes have been rising steadily. The conversation now is as much about leadership in managing risk as it is about innovation.
The Axiom story still feels brand new in many ways, but it’s important to recognize that it’s as much a story about entrepreneurial leadership as it is about innovation in legal services. Put it this way – any firm looking at possible changes to its business model is weighing substantial risks.
The kind of leadership called for may be entrepreneurial in ways that are nothing short of transformative. That kind of leadership can come from an Axiom, and it can come just as powerfully from a law firm.
Whiteford,Taylor & Preston is a midsize firm. What are the big differences you see when you compare it to very large firms?
We are a Mid-Atlantic firm of about 160 lawyers. In some ways Whiteford has the feel of a larger firm, and some of our clients are Fortune 100 companies. In other ways, the business dynamic can feel very different. A majority of our work is in the middle market, where a client may have legal needs every bit as complex as those of much larger companies. And yet you often see an expectation for a single point of contact and a close business advisory relationship. Relationships matter greatly. I know – they matter everywhere. But it is a noticeable and distinctive feature of the firm. I’d add, too, it’s simply a given that pricing and billing will be attractive and transparent. At least here, it all combines to give the business of what we do a more entrepreneurial feel.