More than ever, the leaders of law firms need strong business skills to run firms efficiently and effectively. Gone are the days when law firms could expect to rely solely on the legal expertise of its lawyers to do well; now, a law firm must incorporate broader business functions long common to their corporate clients to thrive. Future leaders will not only be lawyers but also functional specialists – IT and digital managers, knowledge managers, HR and L&D managers, marketing and BD managers – familiar with new business models.
“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. “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.
Immediate need for leaders skilled in business
Chaired by College of Law CEO Neville Carter AM, the roundtable tackled big issues head on. All attendees agreed the absence of any training in business skills was a serious shortcoming in legal education.
“There are yawning gaps between demand and the supply of lawyers and specialists trained in management and leadership within the legal profession,” the report noted. One attendee described the skills gap as being of ‘Grand Canyon proportions’.
“There is no one-size fits all answer to the training issue, and that’s part of the problem,” acknowledged Mark A. Cohen in a story for 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. “There is enormous opportunity to train students to better serve law’s “retail” segment. Tens of millions of new legal consumers would enter the market if there were more new, efficient delivery models that better leverage lawyer time utilizing technology, process, data, metrics, and a client-centric business structure. So too are there opportunities for grads of non-elite schools trained in data analytics, project management, knowledge management, and a plethora of other “business of law” positions—many of which have yet to be created.”
Lack of real management expertise
While the traditional legal services model has been both successful and profitable for decades, flaws in this model are now being exposed.
“The lack of real management expertise, while not yet a crisis, is a threat to many industry stakeholders,” the report concluded. “Law firms and legal departments have traditionally been led by lawyers.” Firms which rotate their management partner every few years so those less able to practise are asked to manage are following an increasingly flawed model as the demands of running a legal business rise.
Technically excellent lawyers may not make good leaders or know how to set direction and strategy for the firm. “Being a ‘rainmaker’ for a law firm can no longer be the prerequisite of a seat at the management table – although it is not a disqualification either,” noted the report.
Differing demand between urban and regional lawyers
While the attendees agreed those being groomed as partners needed training as business people, leaders, staff engagement ambassadors and project sponsors, the skills gap differed between city and country.
“In rural, regional and remote areas where practice is quite marginal and where competition is low, the demand for better management is very different from city or international firms,” the report observed, though noted this is likely to change. The imperative to address the management skills gap remains urgent. “It was agreed that the business of law – whether it is private, inhouse, courts or legal aid – needs to be added to the practice of law.”
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’s board includes business and legal industry experts from Australia, the US and UK.
Read the full Roundtable Report
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