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By Simon Goldhill
Another week. Another law firm in financial difficulty. Challinors, a sizeable Midlands practice, has announced the appointment of an administrator.
This piece isn’t about that, but it’s been sparked by one of the comments on this story on the Law Gazette’s website.
“Appointed a Non Lawyer CEO… Because we are constantly told Solicitors don't have the skills to run their own businesses.”
I don’t know whether or not this is the reason for Challinors’ problem. There is no doubt, however, that sentiments such as the above are still prevalent in the profession. This means that for the majority the corollary holds true; namely solicitors do have the skills to run their own businesses.
But do they? And is it reasonable and fair that we should even have this expectation?
Solicitors have to go through years of training and practical experience of delivering law in order to qualify. CPD obligations are there to maintain that expertise. But where is the training in the skills you need to run a business? I’m not talking about a couple of modules in accounts and practice management. In my 20+ years in practice, I was a partner for a fair chunk of it, ran departments, set up my own firm and thought I understood business. It was only after I left legal practice to establish and grow a business in the real world that I realised how little I actually had done.
In the commercial world, well-run businesses have a top layer of strategic management, all of whom will be experts in their specific business disciplines – marketing, sales, operations etc. The CEO will almost certainly have had a grounding in one of those and may well have an MBA or equivalent, on top of years of hands-on experience of what it takes to run a business. Most law firms will have a management made up of experts in family law, conveyancing, wills and probate etc. They are there because of their success in their legal niche, rather than having any particular talent for or experience in running a business (and please let’s not confuse the role of line management with the strategic skill set required!).
True, there have been more lawyers undertaking MBAs in the last few years. The majority come from the larger City and global firms – some run their own bespoke course for trainees. However, outside of that, it seems that only a small proportion of lawyers undertaking an MBA see it as an opportunity to gain the skills they need to run a law firm, rather than a stepping stone out of law. The response of one of the few, asked by The Lawyer in September 2012 why he undertook an MBA, is instructive:
“At the time I was head of the corporate department and I realised I didn’t have a clue what I was trying to do. I was trying to lead a business and I hadn’t learned any of the specialist skills involved with understanding practical strategic issues around how to build and sustain commercial advantage.”
One of my major concerns about the legal market is that it is a service industry that tends not to accept that it is. Whatever your position on the nomenclature or relationship between the lawyer and the client, it is a service that law firms provide. Yet I suspect that the number of lawyers running their practices who have adopted (let alone heard of) service quality and delivery concepts such as SERVQUAL or Lean Six Sigma, that drive some of the best service providers in the commercial world, is tiny.
I would like to see lawyers understand that they do need to develop real expertise in business by embracing the training and example of the wider commercial world. I’m certainly not advocating that firms will only thrive if outsiders from the commercial world are brought in. After all, it turns out the non-lawyer CEO brought in by Challenors was convicted of stealing client monies in 2011 and ended up in prison!
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