It seems like it’s become a foregone conclusion that any mid-size law firm needs to have a Managing Partner. You need someone to manage the financial performance, create the budget, oversee the billing and bookkeeping process, manage the vendor relations including malpractice insurance. Not to mention the oversight of staff effectiveness, professional development, and run practice meetings.
There’s no disputing the fact that each firm needs these things and more in place to be effective. The question then becomes, “Is a Managing Partner really the best person for all this?”
As I’ve dug into this question, the result seems to be quite consistent across the spectrum. When an attorney accepts the role as Managing Partner, he or she can be reasonably certain that her book of business will decline by at least 25%. So what ends up happening is that the firm takes one of its top attorneys and periodically slashes his book so that he can oversee the administrative functions within the firm. The transition period is even worse because at that time you are taking a new attorney to become Managing Partner, thereby reducing her book of business, and meanwhile the outgoing Managing Partner still has his book at least 25% below his potential. During this time period, the law firm ends up with two of its best attorneys working well below their peak efficiency. This can easily add up to nearly $1 Million Dollars in revenue lost for the firm over a fairly typical 5 year span of a Managing Partner.
Many Managing Partners receive a stipend during their span at the top, however it’s certainly not uncommon for that person to be the lowest compensated Partner in the firm during that term. There seems to be this idea that each Partner just needs to bite the bullet and take her turn at some point. Again, my question becomes, “Why does this need to be the way things are done?”
My solution looks like this. Elect one person to be the “Legal Leader” of the firm. This person still needs to provide the leadership in legal matters and practice meetings; however he only deals with issues directly relating to how that firm will practice law. Leave all the other administrative tasks off his plate. Let someone else handle the finances, the vendors, the staff, the recruiting, etc. It is possible and it works. And it doesn’t require the significant overhead brought on by a COO. In order to be most effective and stay nimble, I think many firms might want to take another look at how things are done and question whether the status quo really is the best way.