At big law firms, chief operating officers fall into three general groups. First, the enormously successful ones, who operate at the highest levels with the trust of the firm’s leadership and partners. Second, the recent arrivals from famous financial, accounting, or consulting houses, who are finding their way through a new jungle, smiling at the profit margins they’ve inherited, and chuckling at the thought that their new employers operate as real businesses. And, finally, the always-anxious administrators, who try to manage in an environment where they will never be seen as equals.
Each has his or her place. But in a time of steady change in the law firm market, each is also facing a new challenge. Will they be able to change their roles from the quintessential inside job to one that begins to face outward? No pressure: Only their livelihoods and the fates of their firms are at stake.
There’s little debate about the inward focus of most of their tasks. When COOs gather to talk about law firm management and profitability, they almost inevitably refer to the five levers they can pull: rates, realization, expenses, leverage, and run rates. The last is also known as: Work harder, damn it—or, as I prefer to think of it, the Iron Butt Syndrome. Each of those tactics calls for an inside move: Charge more and write off less; hold down costs and broaden the pyramid; and, of course, just how much sleep do you need, slacker? [Read more…]