The Role of the Law Firm CEO

The owner of a small law firm recently asked me to send my thoughts on what his role should be as his firm’s CEO.  Below is my response.
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Below are 7 pillars.  They are required to create and maintain the very best law firm.  They should also be your focus as a C-Level pro, because no one else will champion and execute these critical pieces in the way that you will… and should.

This is your day-to-day focus.  Your job description if you will.

(First the list, followed by more detail.)

1. Hire, retain, and develop great people. True success is impossible without this.

2. Define and create an exceptional culture. This is inseparable from #1 above.

3. Build and protect the firm’s brand and reputation… at all costs.

4. Build a world-class infrastructure. The cost to do this is high, but the cost of not doing it is higher.

5. Make sound financial decisions. Based on a solid understanding of key metrics and risks involved in big decisions.

6. Market the hell out of the business… and close.

7. Prioritize (and organize)… The best plan for anything fails when people are drinking out of a firehose.

Hire, retain, and develop great people.  This is by far the most important driver of law firm success.  It’s impossible to achieve greatness without this component and, conversely, it’s nearly impossible to fail when this is executed well.  To succeed in this area, C-Level law firm leaders must do five things:

1. Create a phenomenal – and unique – interviewing process, one that identifies the strengths, weaknesses, and motivation of each candidate to the greatest extent possible.

2. Understand what drives each and every key employee in the organization. And manage them accordingly.  So many leaders get this wrong… and it’s the number one difference between good leaders and great ones.  Good leaders manage their people as if they are all the same.  Good leaders are fair, honest, and open with employees.  But they don’t customize their management approach to each individual team member.  Conversely, the very best owners and managers find out what drives individual contributors to perform at the highest levels, why they adopt and live the core values, and are willing to put the firm first.

3. Delegate important initiatives to those best equipped to accomplish them. And be fair about the workload.  In other words, don’t punish your best producers with far more work than others are doing.

4. Set a clear path for how each employee can reach the next level of success in his/her career. (This doesn’t mean making promises, or removing the owners’ discretion when it comes to promotions, pay increases, etc.  But it’s a key part of keeping employees bought-in and working hard to achieve the firm’s goals.)

5. Insulate your firm against negative impacts of people leaving – by choice or otherwise – by maintaining an extensive pipeline of backfills for every key position in the firm.

Define and create an exceptional culture.  Most law firms fail at this because they undervalue the importance of it to employee performance and the organization.  Your people are going to devote 7-12 hours of most days to your business.  It’s not enough to provide them with a paycheck, computer, desk, and occasional lunch or thank you.  Whether they admit it or not, employees want to work at a place that fosters respect and professionalism.  They want a nice, comfortable working environment.  They want people around them who are equally as committed to the job.  They want to be well compensated.  They want to be part of something that values them as employees and individuals, and insists on high ethics and integrity.  These are universal.

The best law firm owners must do three things:

1. Clearly define what excellence looks like. And then demand it across the organization, not just in results and work product, but in the processes and specifics that produce those two things.

2. Implement fair and reasonable policies, procedures, and goals. Train people on them.  And – most importantly – enforce each one consistently across the entire firm.

3. Have zero tolerance for a small set of culture-killing actions or conduct. (This doesn’t mean firing an employee for a minor offense that damages the culture, but it does mean refusing to allow that offense to go unaddressed.)

Build and protect the firm’s brand and reputation.  Non-owners are generally unconcerned with this aspect of the business.  So it falls on the equity partners and firm leaders.  Committing time and effort to this process is a challenge for those at the top, mostly because the accompanying ROI doesn’t show up for years.  Put another way, it’s much easier to sit in an office and send emails, conduct staff meetings, and write business plans than it is to drive across town and have lunch with someone.  Or spend half a day at a conference presenting and shaking hands.  Or attend a function in the evening for business or community leaders.  But that’s exactly what the most skilled leaders do, plus several other things:

1. Create a list of attainable initiatives designed specifically to grow the firm’s brand, assign them as tasks, and refuse to allow them to go undone.

2. Create a list of things that hurt the brand and develop SOPs to avoid them. This may include the prevention of obvious things such as bar complaints, malpractice lawsuits, or negative reviews.  But it can also include issues that produce unhappy current or former employees.  It can even get specific, such as “at this firm we never say these words to a client because they conflict with our culture.”

Build a world-class infrastructure.  This is by far the hardest area on the list to commit resources to.  And not surprisingly, it shows at most law firms.  Sometimes, ignoring this critical part of the business is catastrophic.  For example, I’ve had firms get shut down for weeks due to a computer hack.  Others have been broken into and had irreplaceable assets and case information or evidence stolen.  But in most cases, failure to commit to infrastructure leads to day-to-day frustration and inefficiency that accumulates into lost revenue – and employees – over the years.  And it’s a shame because it’s 1) easily preventable and 2) costs a fraction of the money consumed by other areas of the practice.

The best C-Level law firm leaders do these things:

1. Invest in a quality office that’s large, comfortable, and well equipped with things that employees need to be productive. (This doesn’t mean a super fancy or expensive office.  But it also doesn’t mean a cramped space not conducive to generating high quality work.)

2. Invest in industry-leading technology. This is self-explanatory, but it’s worth noting that most law firms don’t update hardware and software frequently enough, and tech security is almost always lacking.  It also includes more than just computers, but also phones, fast internet speeds, reliable and available tech support, virtual access to client files and communications, etc.

3. Pay trusted experts who are available for tough issues. Relationships with pros such as a consultant, marketer, ethics lawyer, employment lawyer, CPA and others need to be established, fostered, and utilized.

4. Make Sound Financial Decisions. The recipe for this is relatively simple.  One, have accurate financial data.  Two, understand it.  Three, consider the data when making important decisions, while identifying the best, worst, and most likely scenarios.  And most importantly, know yourself and your personality… and those of your partners.  If your partner is a risk taker, don’t expect her to make only safe decisions.  Similarly, if your partner is obsessed with the latest technology, assume and accept that technology is going to be a costly item over the life of the firm.

Market the Hell Outta the Practice.  Most law firms spend far too little in hard marketing dollars.  Others don’t know the difference between branding and direct lead generation investments.  The key to effective marketing is structure, organization, decision making, implementation, and measurement.  These are not easy, but when done well, a law firm will spend significantly less in raw dollars to produce a given result.

Prioritize and Organize Everything.  If you were to build out all the initiatives and goals for the above pillars, and then create SOPs to ensure success, this document would be dozens of pages.  And the tendency for winners is to try to accomplish all of them at one time.  But great leaders are patient, and they understand resource constraints.  They are willing to have things take longer than they would prefer if they get done well.  And so that’s the last role of the C-Level law firm leader.  Focus on the things which need to be accomplished most, recognizing that other important items will get addressed further down the troth.

Written by Matt Starosciak at Proven Law Marketing, www.provenlawmarketing.com