The Making of a 21st Century Law Firm

By Laura Leckrone

In today's society, new economy practices are evident in all sectors of business driving the demand for high-speed technology and efficiency to new levels. To meet the demands of the new economy, professional service firms of all types have increasingly become one of the leading employment industries and a major sector of the business economy. Law firms are no exception, and the "old school" methods of practicing law and managing a firm are quickly becoming obsolete as expectations in terms of efficiency and productivity from legal service providers have reached pinnacle heights.

If there is one thing that successful law firms facing the new economy have in common, it's the ability to manage. Whether it's managing change, growth, personnel, client base or even the firm's ability to meet client demand, management is a key factor in 21st century law practices. The days of lawyers being able to work independently and with little supervision are gone. Today, clients are more conscientious of the need to measure effectiveness and seek results, and law firms need to understand how to effectively compete with other firms by maximizing results for their clients through streamlining production within their own practice. By implementing strategic management practices, firms can take hold of the changing market and better compete in today's economy.

A Case in Point

While some legal professionals are just now learning and being mentored on the need to become 21st Century savvy, there are successful firms that are ahead of their times and have been "thinking outside of the box" for the past two decades to position themselves for the new economy. One example is the Law Offices of Thomas Noonan based in St. Louis, Missouri. Tom Noonan established the firm in 1985. His experience at that point stemmed from a few years working as a practicing attorney at a couple of firms he joined right out of law school. Now the practice is one of the most successful insurance defense and commercial and creditor bankruptcy firms in the Midwest with a roster of clients that includes several Fortune 500 corporations. Mr. Noonan's firm has grown more than 25 percent in revenues per year since 1996 and to a practice having nine attorneys, 14 staff members and offices in both Illinois and Missouri. The practice has received and maintained an AV rating by Martindale-Hubbell since 1986 and is approved by A.M. Best.

Reaching this point of success has not come without meticulous planning and much consideration of the management techniques that are crucial in building a viable law firm. Mr. Noonan's education and training consisted of what is required of most practicing attorneys, which most often doesn't include courses in business management. He was educated to litigate legal cases and had not received formal training in the areas of accounting, human resources, marketing and all the other aspects that are critical to running a successful business. While many times attorneys subcontract services for accounting and marketing and rely on their instincts for recruiting talent to the firm, Mr. Noonan sought advice from a legal management consultant to help steer him in the right direction.

Phase I - Planning the Firm

When he first established the firm, Mr. Noonan recognized that to be competitive he needed to be different and not conform to the typical way of managing a law practice. "I knew the basic direction that I wanted to steer the firm but I wasn't sure how to properly organize and prioritize all of my ideas," said Tom Noonan. "I decided that I needed to consult with a professional that deals with business start ups and management mentoring."

Before Mr. Noonan had office space, he established a professional relationship with a legal management-consulting firm that is helping guide the management of the firm to this day. The management consultant, Dr. John W. Olmstead, Jr., of Olmstead & Associates, which is also based in St. Louis, Mo., throughout the years has provided services ranging from developing an overall business plan and management strategy to providing start-up business accounting and bookkeeping and IT network consulting. These services were provided in phases that were suitable to the direction Mr. Noonan wished to lead the firm.

Dr. Olmstead has served as more of a mentor and ex-officio partner to the firm and over the years has provided a tiered approach to helping build Mr. Noonan's practice. Management consulting services provided by Dr. Olmstead have included:

• Helping analyze the feasibility of creating a law practice.
• Formulating a business plan for the practice.
• Developing a marketing strategy and package to use to solicit clients.
• Providing ongoing coaching and mentoring, in a variety of practice management areas including image, marketing, financial performance, client service, technology, etc.
• Helping find office space that works within the constraints of the budget, reviewing options and offering advice. Weighing the pros and cons of leasing vs. building an office space.
• Providing input on hiring office staff and helping train them once in place.
• Acting as the command post and communication center while the office was under construction and up until the first day in operation.
• Hosted and administered billing and accounting for a year and then helping the firm establish in-house systems.
• Providing software to help mainstream the processing of time billing and accounting and then training the staff to use the software efficiently.
• Providing technical support and networking consulting to streamline the efficiency between workstations and the firm's satellite office.
  

"Dr. Olmstead and his team have helped my company by helping me organize and develop a mulit-faceted approach to building the firm," said Tom Noonan. "Throughout the 16 years of our professional relationship, he has taken many responsibilities away from me. He helps me juggle the day-to-day management issues that so often consume large portions of my day and has allowed me to do what I do best, practice law. His presence throughout the development of my firm has been tremendously beneficial."

Phase II- Foster and balance growth within the firm

While developing a professional atmosphere that includes a premier office space, high-tech capabilities and streamlined production is crucial in building a successful legal firm, the ability to foster and balance growth within the firm's client base and staff is equally important. Lawyers compete in two different markets. One is the market for clients and the other is the market for talented attorneys and staff to add to the firm's roster. To properly balance the growth and effectively compete, law firms must be adept in both markets.

In marketing for clients, law firms must learn how to become client focused and redesign their services to meet the needs of the changing economy. This requires excellent communication strategies with clients, properly packaged services, team delivered services, and active and persistent marketing programs. In the market for recruiting talented attorneys and staff, law firms must be able to offer a challenging and rewarding work environment to help compete for talent, be proactive in the training and development of this talent, and be able to meet the needs and market demands in order to retain quality people.

Olmstead recognized early in Mr. Noonan's career his ability to excel in recruiting and retaining clients and staff. He has always had the ability and proactive nature to market and create a quality image for his practice, communicate with his clients to effectively meet their needs, and identify and develop quality professionals to add to his staff. Further, Mr. Noonan has come to realize that clients pay for more than just the services of the lawyer. They buy the complete process and experience with the firm, thereby, everyone in the firm contributes to client satisfaction.

All employees of Mr. Noonan's firm are considered professionals, whether they are a veteran attorney or an administrative assistant. He has managed to give each staff member an area of power and has successfully created a team with no class distinctions. "The most important thing I have learned from Dr. Olmstead is that if I want to be a successful manager and develop a steady client base, I need to just be myself and learn to talk to people in order to develop their skills and determine their wants and needs," added Noonan.

This has helped Mr. Noonan in not only making sure the firm functions in an efficient and client focused manner, but also has contributed to his success in retaining his most outstanding staff members.

Phase III - Implement 21st Century Business Practices and Maintain a Forward Thinking Mindset

It is safe to say that 21st century law firms are very different from other firms that practice by traditional methods. They have a completely different focus. They are market orientated, client focused, and dedicated to their people. People, a law firm's intellectual capital, are the firm's most important asset and a key component of the firm's overall strategy and competitive advantage. All firm personnel (attorneys, other professional service specialists, management personnel and staff) are considered key assets and part of the team and are never referred to as "non-lawyers," or "non-professionals." Each is an equal within the firm and given their own responsibilities and powers.

"I have learned throughout the years that I have a responsibility to the people within my organization and to my clients to retain quality employees and develop relationships with them so that they will appreciate their work and provide quality service to our clients," said Noonan.

Twenty-first Century thinking revolves around the understanding of how important people are to the success of any business. Dr. Olmstead consistently drills this message to all of his clients in hopes that they will take his advice and run with it. "What I see too often is a sole practitioner that tries to do everything including managing office operations, practicing law and recruiting clients. They give little trust or faith to the abilities of their staff and attorneys to do things on their own and allow little time for getting to develop relationships with their people," said Olmstead.

While often times attorneys develop mentor relationships with legal management consultants such as Dr. Olmstead, those who follow the instruction and advice are far from few. Dr. Olmstead credits Mr. Noonan for being highly focused in the management side of his practice and attributes his dedication to implementing a forward mindset and developing relationships with staff and clients his best asset. Throughout the years of their working relationship, Dr. Olmstead has offered Mr. Noonan the following advice to help keep things in perspective through many highs and lows within the firm.

• Always thinks like a businessman - Learn how to think from your client's perspective and be partners with your clients.
• Have a vision and a plan for the firm from the beginning.
• Implement and maintain first-class services for your clients with a team approach.
• Learn to market the firm and develop a first class image - Strive for outstanding ratings and designations by professional associations such as Martindale-Hubbell and A.M. Best.
• Dare to be different - Consider a branch office, employees working on client staffs, affiliations with other lawyers, advanced and innovative office technology.
• Always remain focused - Attorneys are often times too busy practicing law to stay focused on the direction and management of the firm.
• Treat employees well and energize the entire office staff - Make the office a fun place to work.

Staying ahead of the Game

What has made the partnership between Mr. Noonan and Dr. Olmstead successful is the ongoing nature of the their professional relationship. Dr. Olmstead continues to provide mentoring and coaching services to Mr. Noonan in areas of general business planning, marketing, financial management and technology support. While Mr. Noonan is busy managing the firm and balancing his day-to-day activities, Dr. Olmstead continues to seek innovative ways to help steer Mr. Noonan and his firm towards the advanced management practices. Looking ten to 20 years into the future of law practice management, the day-to-day operations of firms is expected to swiftly change and Mr. Noonan and Dr. Olmstead seem to be turning their sites to new directions.

What they see is some firms will have a global presence and will compete in global markets. Existing practice barriers will give away and many firms will create multidisciplinary practices. These firms will function as multidisciplinary professional service firms and their rosters will include specialists from other professions such as accounting, finance, management consulting, psychology and counseling. Advanced 21st century law firms will have sound focused business strategies and competent leadership. Law firm operations will be managed by professional managers, and some firms may even be owned by non-attorneys.

While these advanced methods seem to be too distant to consider, remember that it's never too early to get a head start on developing a competitive edge. All too often, lawyers play follow the leader and simply repeat what other law firms are doing. No one ever wants to be first. But, taking from the example of The Law Offices of Thomas Noonan and the strategies and forward thinking methods presented by Dr. John Olmstead, sometimes it pays to be ahead of the game.

 

Laura Leckrone is Senior Account Executive for the Hauser Group, Inc., based in St. Louis, Missouri. Laura@hausergrouppr.com

John W. Olmstead, Jr., MBA, Ph.D. is a Certified Professional Consultant to Management and the president of Olmstead & Associates, Legal Management Consultants, based in St. Louis, Missouri. The firm provides organizational performance, management, leadership development and marketing advisory services to law and other professional service firms. Dr. Olmstead is the Editor-in-Chief of "The Lawyers Competitive Edge: The Journal of Law Office Economics and Management," published by West Group. He also serves as a member of the Legal Marketing Association (LMA) Research Committee. Dr. Olmstead may be contacted via e-mail at jolmstead@olmsteadassoc.com. Additional articles and information is available at the firm's web site: www.olmsteadassoc.com

 

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