Canadian Lawyer

w w w . c a n a d i a n l a w y e r m a g . c o m S E P T E M B E R 2 0 1 8 21 increased efficiency and cost effectiveness. Law firms are facing additional competition, including from the large accounting firms that now include legal as a major aspect of their service options. Skills he sees as being increasingly neces- sary for both lawyers and nonlawyers in the firm include legal project management as well as knowledge management systems and processes such as artificial intelligence and machine learning. While the recession was the major threat to law firms a decade ago, the current threat to the profession comes "primarily from the sweeping force of tech- nology evolution over the last two decades that has resulted in the commoditization and commercialization of more and more legal services," according to Altman's introduction in the survey study, warning firms that they need to be more forward looking. "Few firms have taken full advantage of the disruption as an opportunity and run with it to distinguish themselves from competitors." Given that the ownership structure of law firms in North America remains tied to law- yers, Clay sees only limited movement here toward approaches adopted in England and Australia where the leaders of the firm are not necessarily lawyers. "At some point, the U.S. and Canada have got to get rid of this protectionist stance against nonlawyers, or people who are not lawyers, having an equity interest in the firm," he says. "We just need a whole cohort of professional people that are part of the human capital of the law firm and that they are treated as though they are lawyers with lawyer degrees and they can have, actu- ally, an ownership stake. That's where I think we need to be." Timothy Corcoran, past president of the Legal Marketing Association and an elected fellow of the College of Law Practice Manage- ment in the U.S., also sees the future of the law firms involving a move to a more sophisti- cated management model including corporate executives with business backgrounds. Yet as law firms largely continue to fol- low the traditional partnership model with a managing partner co-ordinating the overall leadership structure, there has been some evolution, he says. Many firms now have co- managing partners, a managing partner and a chairperson or managing partner for each of the different offices or geographic locations. That allows them to divide the responsibilities. "I think one of the reasons why we're see- ing co-managing partners is some people have a good vision, long range, big picture and some people are willing and able to dig into the day-to-day operational stuff, making battlefield decisions" about salaries, leases and operational concerns, he says. Some divide up regional responsibilities and allocate them to executive committee members who serve as sort of stewards. The wrinkles he sees is the managing part- ners who continue to carry on their legal prac- tice and the tendency to put the top lawyer in the position of being the managing partner. That, he says, shows that the firm doesn't nec- essarily have or value business acumen. Corcoran sees a more ideal management approach in having an executive commit- tee with a plan or framework, dedicated to thinking about the fortunes of the firm with a full-time managing partner and chairperson at the helm. That involves controlling the expenses of partners and scrutinizing any rate discounts to avoid pricing pressures else- where and have consistency in the delivery of legal services. That requires the partners to buy in and for that to happen they need to be willing to be led by the managing partner or CEO, says Jordan Furlong, principle of Law 21 and legal market analyst and speaker based in Ottawa. Encouraging all the partners to forfeit a por- tion of their autonomy requires them to trust that person and accept guidance from them. "I don't think it matters that much what leadership structure you have in place. If the lawyers in the firm and the partners in par- ticular don't acquiesce at some level to being led and managed to some degree and some manner, it doesn't matter what your leader- ship structure is," he says. Furlong sees that reluctance to be led as Firms in transition Altman's 2018 Law Firms in Transition survey of U.S. law firms with 50 or more lawyers included these findings: In 69 per cent of law firms, partners resist most change efforts; Equity partners are not busy enough in 51 per cent of all law firms; 59 per cent of law firms are not feeling enough economic pain to motivate more significant change; Only 38 per cent of law firms are actively engaged in experiments to test innovative ideas or meth- ods; Overcapacity is diluting profitability in 58 per cent of all law firms. 69 % 51 % 59 % 38 % 58 % "I think one of the reasons why we're seeing co-managing partners is some people have a good vision, long range, big picture and some people are willing and able to dig into the day-to-day operational stuff …"

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