Are Lawyers The Only Ones Qualified To Manage Law Firms?

Nancy Myrland All Posts, Business of Law, Law Firms, Management Leave a Comment

Are Lawyers The Only Ones Qualified To Manage Law Firms?It is not a prerequisite, nor should it be, for law firm CEOs to be lawyers.

The exception to this is when, as mentioned in this article in the ABA Journal, specific words in titles are not allowed. The example given was in May 2014 in Texas when the Texas bar’s ethics committee issued Opinion No. 642, deciding Texas firms couldn’t use the title CEO because the title implies power over the lawyers. They couldn’t use the term “chief” in any title.

Use Of The Word Officer For Those Who Don’t Practice Law

When this ruling came down, the ABA Journal summarized the ruling by saying:

“The ethics opinion says firms shouldn’t use ‘officer’ in nonlawyer titles because the word indicates the person has the power to control either the entire law firm or significant areas of the firm’s operations. Nor can law firms use the word ‘principal’ to describe nonlawyer managers because the word implies the employee has an interest in the firm involving control or ownership.”

They went on to say that:

“Firms that follow this rule but nonetheless give nonlawyers the title of ‘officer’ or ‘principal’ are communicating in a false or misleading way, according to the opinion.”

At the heart of this restriction are Rules 5.04(d)(2) and 5.04(d)(3), which prohibit lawyers from practicing law with such an organization if a non-lawyer functions as a corporate director or officer or if a non-lawyer is given the right to direct or control the professional judgment of a lawyer in the organization.  In the case of a law firm organized as a partnership, the conclusion is the same:  a non-lawyer may not control a partnership’s provision of legal services. Rule 5.04(b) prohibits a lawyer from forming “a partnership with a non-lawyer if any of the activities of the partnership consist of the practice of law.”

You Can Lead The Firm As Long As You Have No Control Over The Practice

After dozens of Texas firms voiced their dissenting opinion, the committee revised their opinion, adding these titles and words may be used ”but only if firms make clear they do not have control over the firm’s legal practice,” meaning they have no control over the practice of law.

Lawyers Are Trained To Be Lawyers

One example given in the ABA Journal is business professional Angela Hickey, CEO of Levenfield Pearlstein. She was named CEO after serving the firm as executive director for four years.

Angela summed it up by saying that:

“Lawyers are trained to be lawyers and not to be businesspeople.”

In the article, she goes on to say:

“It was and remains a sound business model to engage business professionals to run the firm—the pace and change and the breadth of knowledge required to stay relevant and competitive in the legal industry demands full energy and focus of business professionals.”

The article also mentions other business professionals leading firms, such as

  • Paul Eberle, CEO of Husch Blackwell, former entrepreneur and business owner, College of the Holy Cross graduate
  • Scott Green, Global Chief Operating and Financial Officer, former CEO of Pepper Hamilton, Harvard graduate and CPA
  • Justin Kan, CEO of Atrium, Internet entrepreneur and investor, Yale graduate

Are Lawyers Good Businesspeople?

Having studied business in college, then working in sales, then as a marketing manager, I started in legal marketing as a senior in-house marketer in 1997.

Soon after I started, I made a comment one day to my predecessor, a wonderful marketer, lawyer, and businessperson, that I was surprised a particular concept we were discussing wasn’t being done at the firm because it was just good business.

I also remember thinking it was also a common sense principle.

This person said:

“You need to remember that lawyers aren’t necessarily good businesspeople.”

Isn’t This Philosophy A Bit Shortsighted?

I read articles like this so many years later and find it unfortunate but not surprising that these thoughts continue.

To assume a business professional is unprepared to lead a group of anything, whether lawyers, doctors, architects, or financial consultants, is absolutely shortsighted.

It is also shortsighted to assume that every lawyer doesn’t bring business skills to the job. When I was in-house, I worked with many lawyers who came from the business world with serious business skills that set them apart from their peers.

Prerequisites For Managing A Law Firm

The skills that are important to being the leader of a law firm revolve around that person’s business acumen, as well as his/her ability to:

  • Learn
  • Listen
  • Lead
  • Interpret
  • Motivate
  • Have vision
  • Create strategy
  • Take appropriate risks
  • Build consensus
  • Interpret actions and trends and act accordingly
  • Negotiate
  • Understand the business of law, and
  • Honestly and ethically direct the business of law

Lawyers Don’t Have To Have Experienced The Crisis They Are Trying To Solve

A lawyer can effectively counsel clients going through mergers even if she has never gone through one.

He can lead clients through labor negotiations even if he has never been a labor leader or a member of a union.

She can defend insurance companies through litigation even if she has never worked for an insurance company, been sued, been denied, or been treated unfairly…and on and on.

Why? Because they are smart, educated, and experienced, and have learned the skills needed through many years of study, practice, and living.

What Really Prepares Us For Leadership

I have a business degree but wouldn’t have been prepared to run a business or manage people or advise lawyers had I not first:

  • Learned how to learn (the school part)
  • Been put through the paces countless times when selling (weeks of training before ever being released to talk to clients)
  • Spent time planning and managing promotions and advertising campaigns
  • Worked with agencies
  • Made mistakes, or
  • Been thrown into the zero-based budget creation process I experienced in corporate

Those are what prepared me for working with lawyers, managing the marketing and community affairs functions at a law firm…not having practiced law.

Judge Skills Not Degrees

Everyone has their own skill set that prepares them for managing a firm or working with lawyers. Being a lawyer is not one of those prerequisites. It would be nice to have both skillsets, but it is not the only way.

Non-Lawyers and Non-Marketers

Lawyers, while I have you here, you should be aware that many business professionals and lawyers dislike the term non-lawyer.

In any profession or industry, preceding any title with “non” can imply the person is less than…you know, as in they aren’t the real thing.

We don’t hear of non-doctors, non-accountants, non-architects, or non-scientists, do we? I’ll answer that. No, we don’t.

I know, I know. It’s an easy term, and what else would we call them?

Just as they would never think to call you non-marketers, may I suggest you call them what they are, which is business professionals? They will continue calling you lawyers and legal professionals. Everyone will then be referred to using titles that are professional and that show respect.

I know that not everyone is bothered by this term, but as long as many are, why not call people what they are, vs. what they are not?

That’s good business.

Are Lawyers The Only Ones Qualified To Manage Law Firms?

Nancy Myrland is a Marketing and Business Development Planning Consultant, and a Content, Social & Digital Media Speaker, Trainer & Advisor, helping lawyers and legal marketers grow by integrating all marketing disciplines. She is a frequent LinkedIn, Twitter, and Facebook for Business trainer, as well as a content marketing specialist. She helps lawyers, law firms, and legal marketers grow their practices by making their marketing and business development efforts more relevant to their current and potential clients. She also helps lead law firms through their online digital strategy when dealing with high-stakes, visible cases. As an early and constant adopter of social and digital media and technology, she also helps firms with blogging, podcasts, video marketing, voice marketing, flash briefings, and livestreaming. If you would like to reserve an hour of Nancy’s time to begin talking strategy or think through an issue you are having, you can do that here. She can also be reached via email here.

 

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