published February 11, 2013

By Harrison Barnes, CEO and Founder - BCG Attorney Search left

Practice of Law and Management

Practice of Law and Management

Organization, in terms of the practice of law, is the art which multiplies a one-man enterprise into a larger operation. There is a sharp limit to what the ablest of lawyers can do alone. With organization and the controlled and directed teamwork of others, the effectiveness of one man can be multiplied.

The difference between the corner grocery, which does a few hundred dollars worth of business a week, and a supermarket, which grosses many thousands, is organization. The sole-proprietor grocer spreads himself between purchasing, waiting on trade, stacking goods, and ringing cash; doing all things, often none well. A single manager of a supermarket, through deployment of a specialized and organized work force, can handle thousands of transactions daily.
There were always some highly organized and well-managed law firms. They tended most often to be larger, urban firms, which had developed their individual concepts of management and structure. It was not until the early sixties that the American Bar Association designated a Standing Committee to deal with the subject of the economics of the legal profession. During this period other bar associations formed new, or rejuvenated old, committees to deal with the economic aspects of law practice. Informed management became a necessity for lawyers.

Three factors have had special impact in compelling increasing attention of the legal profession to economic and management problems:
  1. Law firms are increasing in size and specialization, and this larger size complicates management and requires the introduction of new concepts.
  2. Inflation places pressure on overhead expenses, which tends to outrun the ability of many lawyers to escalate their fees. Improved efficiency can take up some of the difference.
  3. Technology has invaded the practice of law with computers, automatic typewriters, and other devices, requiring heavier investments than lawyers have been accustomed to making. While promising improved efficiencies, these costly technological devices also require attentive management, since idle machinery is expensive.
The practice of law has moved beyond the ability of the single lawyer to serve all client needs, whether in private practice, as a county prosecutor, or as an employee of a major corporation. The body of laws, regulations, decisions, and rules is simply too vast and too complex for one person to handle with any degree of efficiency; consequently, legal organizations have in recent years become larger and their members' talents more specialized. Clients are aware of these changes, especially those clients who avail themselves regularly of legal services.

Concepts of management are difficult to introduce into the legal profession. Lawyers who are good at their profession have certain characteristics, shared with some other professional groups that make unworkable the type of rigid management structure found in certain corporations and in the military. Lawyers tend to have great individuality. They like to make decisions. Many are combative. Controversy is regarded as desirable. The legal profession has traditionally had a strong sense of seniority with all of the attendant evils and benefits of such a system.

It is difficult to "manage" the work of a group of lawyers or to systematize their business behavior. Yet a team of two lawyers requires coordination in the behavior of the two. A group of ten or one hundred requires management structure with the individualized preferences of each member, to some degree, subordinated.

A Case in Point: New England Gas Light Company

Lack of management direction was clearly evident in the legal department of New England Gas Light Company when a management study was requested by its general counsel. Jack Armstrong had attained the position of head of the department after "graduating" from one of the prestigious large corporate law firms, and serving as assistant general counsel of another major utility. The department had seven lawyers, in addition to a paralegal staff used in real estate activities.

Jack liked to practice law. He was the personal counsel to the company president and to the Board of Directors, and he took a hand in all major rate cases, merger and acquisition discussions, and financing. He could "shut his door" and wrestle with a legal problem from 7 a.m. to midnight, emerging only briefly for a snack.

Of the other seven lawyers, four were supposed to report to Armstrong, the others to one of those four senior attorneys. Each lawyer could develop his own "clients" within the company, and some of the department's troubles could be traced to that policy. Managers soon learned which of the lawyers could be counted on to stretch a point, or to provide prompt service, or to protect the poor judgment of their "clients" from the scrutiny of higher management. Needless to say, work load distribution was one of the problems that prompted the management study.

Another symptom was lawyer turnover. Some of the brighter lawyers Armstrong recruited left after a short stay. While the consultants had been asked to examine the compensation structure, this was not the real problem.

The real trouble was that Jack Armstrong wanted to be a very good lawyer. He had neither time for, nor interest in, managing his department. His subordinates were unable to reach him for days. Not one of the four senior attorneys was given any particular authority to act as surrogate. The department was expected to manage itself. And that was a totally unreasonable expectation!

Functions of Management

Good management for a professional legal services organization ensures that
  1. the work of clients is promptly and properly completed;
  2. services are economical for the client and economically rewarding for the lawyers;
  3. the professional staff is kept informed of developments in law, and specialized learning is fostered and properly used;
  4. the staff is evenly loaded with work and each member of the staff has an opportunity for professional fulfillment;
  5. new lawyers are recruited in a planned and coordinated way, trained, and integrated into the organization;
  6. trained supporting staff is available and properly motivated and supervised;
  7. systems and procedures are developed and maintained effectively for the organization's needs, and new employees are indoctrinated in them;
  8. work is delegated downward through the professional semi-professional, and supporting staff to the lowest competent level;
  9. budgets, cash flow, salaries, and distributions are thoughtfully dealt with and unnecessary crises are avoided;
  10. the organization has a proper "home" with changing needs properly anticipated;
  11. adverse trends are spotted early and dealt with effectively;
  12. the efforts of all of the individuals who make up the organization are given recognition.
The principal resource of any professional organization is the professional complement available to it. In terms of an organization supplying legal services, the principal resource is the time of competent lawyers. Other resources include the permanent staff, available part-time or temporary professional and non-professional staff, physical facilities, money and credit, equipment, library, and files.

It is the management that pulls these resources together to achieve goals; and it is the lack of management or the lack of goals that wastes these resources, and thus fails to optimize the potentials of the organization.

In the terms of the legal profession, the goals of management must first be established. They may include (1) the provision of quality legal services, (2) adequate compensation of owners and employees, (3) growth and survival of the enterprise, (4) satisfaction of the ego and status needs of the people involved, and (5) the fulfillment of the firm's professional obligations to the public and the bar.

The principles of management, adjusted to scale, apply to the single practitioner and to the largest law firm, as well as to the prosecutor's office and to the law department of a corporation. Each has its goals; each has its resources to deploy in the achievement of goals.

Lawyers often ignore management concepts until they face problems. Management has been, and in many law offices still is, regarded as an "unprofessional" aspect of the lawyer's work and responsibility.

Nowhere is this more clear than in those law firms that periodically rotate the management assignment among the partners. One such firm changed managing partners every six months. Partners on reaching the age of 58 were "excused" from the onerous task. Needless to say, the firm had some serious problems, not the least of which was a total lack of coordination of professional activities.

Management, organization, and systems are too often viewed as an expense, whereas, in reality, these functions maximize income. Those law offices that "just want to practice law," whether they are made up of a single lawyer or a group, get less done, have more headaches, and are sued more often for malpractice than the firms that recognize the need for learning and applying management techniques.

Dwight G. McCarty, in his pioneering book Law Office Management, first published in 1926, summarized:

Efficient management is more than effective planning, more than simplification or standardization, more than the elimination of waste, more than increasing production. It is even more than the spirit of cooperation, more than altruism working for the higher life. The principles of management are all interdependent and coordinated. Used separately, they are only partially effective. Together, they form a system as moral as the golden rule and as practical as the multiplication table. United, they become a tremendous power for achievement.

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