21 November 2018

Preparing the future leaders of legal businesses

Published on 21 November 2018

Disruption, innovation and upheaval have become commonplace in the legal profession. NewLaw firms are no longer confined to serving the fringes of small business clients, with firms such as Legal Vision now matched by big law counterparts like Hamilton Locke. Both look to use efficiencies from offshoring work and technology to do more work with fewer lawyers, stripping firms back to exclusively fee-earners. With more focus on functional specialists – IT and digital managers, knowledge managers, HR and L&D managers, marketing and BD managers – who can rework the ‘business’ of law’, the traditional ‘master and apprentice’ model of legal career progression is being upended.

“The future of the sector will be decided by business leaders,” declared Michael Pelly, Legal Editor of the Australian Financial Review, reporting back on the recent Legal Business Leaders Roundtable initiated by The College of Law “More notice should be taken of Millennials who ‘think two or three steps ahead’,” said Michael.

Representatives from law firms, corporate and government legal departments and specialist professional societies – The Law Council and ALPMA participated in a lively discussion.

 

The best legal minds

“Just a decade ago it was easy to pick winners in the legal services field,” observed College of Law CEO Neville Carter AM. “Successful corporate law firms had big brands, big teams and lawyers with big reputations. And the same was true for smaller firms on city fringes, in outer suburbs and regional centres with flourishing practices and able to attract young lawyers. They were making big money too, with clients prepared to pay anything to know they had the best legal minds on their side.”

“Lawyers rose through the ranks from summer intern to managing partner by serving their time, observing the hierarchy, being useful to senior partners, landing new clients and increasing their billings. It was a legal profession designed by lawyers, for lawyers - and run by lawyers.”

 

Demanding more for less

The change came quickly, spurred by the global financial crisis. Clients became cost-conscious, demanding more for less.

“Law firms and legal departments are under increasing pressure to deliver faster, better, cheaper service while becoming more efficient, predictable and agile,” said Neville. “Legal advisors are now expected to think like business people and to be business partners who understand the drivers of the commercial world. They must have emotional intelligence, negotiate, collaborate, manage relationships and solve problems. Lawyers often call these qualities ‘soft’ skills, but they are the tools needed to navigate a hard commercial world, and to stay relevant and competitive in an evolving industry. It is against this background that the College of Law brought together some of the best minds in the legal services industry to discuss the impact of modern commercial realities on the industry.”

 

Where to now? Lawyers with leadership skills

This first post of a six-part series explores what the roundtable agreed as next steps for the profession, or ‘where to now?’

Consensus from the roundtable was that the future of the profession would be decided by business leaders, not lawyers. A major issued identified by the roundtable was an absence of effective managers and leaders in the legal profession. To fill this gap, either external functional specialists should be brought into legal services, or lawyers should skill up with these specialist business skills. Functional specialists – IT and digital managers, knowledge managers, HR and L&D managers, marketing and BD managers – could rise to a managerial role in a law firm in ways previously unseen, as firms restructure away from a highly lawyer-centric model to run lean and efficient businesses as per client expectations.

Numerous past programs were cited that had aimed to build business skills in lawyers, including the MBA in Legal Practice from Nottingham on Trent University, Melbourne Law School’s business focused education, and a number of specific programs offered through the Australian Legal Practice Management Association (ALPMA) and the Association of Corporate Counsel (ACC).

 

The need for T people

“What law firms need now is ‘T-People’ with deep technical specialisation in an area of law or an industry coupled with a breadth of business and people skills,” said one attendee.

While technical legal knowledge can be acquired through existing modes of formal education and professional experience, a gap exists to help deepen lawyer’s business and management skills. Excellent technical skills will only get a lawyer so far. The roundtable agreed lawyers needed a deeper understanding of business and leadership skills to progress.

 

Introducing the Master of Legal Business

In response, the College of Law announced a new Master of Legal Business Degree (MLB) set to commence in 2019. It is specifically aimed at lawyers and functional specialists looking to assume management and leadership roles, offering future-focused business and management skills to adapt to a rapidly changing marketplace. Chaired by legal services industry authority and author Dr George Beaton, the MLB Program Board includes business and legal industry experts from Australia, the US and UK.

 

The new law firm needs new leadership

“Legal knowledge was long the sole requisite for a legal career; now it is a baseline,” wrote lawyer and legal entrepreneur Mark A. Cohen, in Forbes. Mark is a Program Board member and Teaching Fellow in the College of Law’s Master of Legal Business and founded companies which pioneered new business models for law firms. “Legal performance is shifting from input – hours and origination – to output – outcomes and results that drive client value. Lawyers must render counsel that considers not only legal risk but also other factors such as brand reputation, regulatory, financial, etc. they must provide multi-dimensional, holistic, timely, and actionable advice. This is what the marketplace construes as ‘thinking like a lawyer.' "

The Master of Legal Business was developed with this specific need in mind. It aims to provide the broad base of business skills to train the leaders of the future law firm, whether they are lawyers, or functional specialists from IT, HR, L&D or marketing.

 

Read the full Roundtable Report