ILLUSTRATION: PEP MONTSERRAT

"Everyone taking a turn at the wheel is a silly way to run a business. There's a certain amount of accrued knowledge that you need to be successful. That's why there's a growing trend toward law firm professional managers, like executive directors and COOs."

Deborah Marshall '82

Summer 2007 | Trends

Accidental Manager

By Maura King Scully

DELIVERING DRAMATIC CLOSING ARGUMENTS. Representing sympathetic clients. Orchestrating important mergers and acquisitions. This is the stuff many law students no doubt dream of when imagining their professional lives. For those in private practice who end up as managing partners, however, the reality is quite different. Managing partners — and the various titles they go by, partners-in-charge, managing shareholders — oversee decidedly unlawyerly matters like negotiating leases, upgrading technology and managing human resources.

It’s quite a far cry from torts and civil procedure, requiring vastly different skills. So how exactly do you manage the business of law? For a real-world perspective, Northeastern Law Magazine spoke with graduates who are managing partners to learn how they’re mastering the art of running a law firm in the 21^st century.

DUTY ROSTER

According to the 2007 Senior Leadership Survey for Law Firms conducted by Altman Weil, a national legal consulting firm, lawyer-managers spend 35 percent of their time on firm management, 10 percent on business development and 45 percent on law practice. What’s considered firm management? “I do everything from signing off on expense reports to strategic planning,” explains John Chesley ’84, partner-in-charge of Ropes & Gray’s San Francisco office. “I’m responsible for training and retaining the next generation of talent, defining what client work should be, and serving as a policy advisor and sounding board for senior partners.”

Richard Dykstra ’73, managing shareholder at Stafford Frey Cooper in Seattle, reports he supervises operations like “controller, HR, office administrator, IT; handle issues involving shareholders, and make decisions related to hiring and firing of associates and staff.” He says that he enjoys the job, particularly dealing with “philosophical things, like, overall, what do we want to do? Make the most money? Serve clients in the best possible way? Enjoy intellectual challenge? What you decide determines how you spend resources.”

ROUTE TO THE TOP

Few attorneys set out to become managing partners. For most, it’s an accidental career, born of opening their own firm or a satellite office for an existing firm, or becoming a partner and rotating to the manager’s seat.

Dykstra did the latter. “I did not aspire to be managing partner. I accepted the role because there were strong divisions among shareholders, and I was the only candidate completely acceptable to everyone,” he says. Historically, at his firm “managing partners change every two years. Our last, however, served for five years.” Just past the two-year mark himself, Dykstra aims “to go back to shorter terms. I enjoy practicing law; being managing shareholder has had a significant impact on my own practice.”

In 1995, after 20 years at Burns & Levinson in Boston, Larry Cetrulo ’75 opted to hang his own shingle, launching Cetrulo & Capone. Twelve years later, the litigation firm is the 40^th largest in Massachusetts, with 45 attorneys. “From the start, I’ve had an executive director who runs day-to-day operations. When the executive director position is open, though, I’m ever more involved in the minutiae — whether to paint a conference room or replace office furniture. That will burn you out fast,” he notes.

Indeed, today, law firm management is a career path in and of itself, observes Deborah Marshall ’82, who serves on the management committee at Howard Rice in San Francisco. “Professional service firms are notoriously hard to manage. Everyone taking a turn at the wheel is a silly way to run a business,” says Marshall, who also heads the firm’s business department. “There’s a certain amount of accrued knowledge that you need to be successful. That’s why there’s a growing trend toward law firm professional managers, like executive directors and COOs.”

By virtue of earning a JD and passing the bar, graduates are prepared to practice law. There’s no such direct route for mastering the managing partner ropes. It comes down to a combination of watching, listening and on-the-job training.

“I make it up as I go along,” says Cetrulo. “I’m a big believer in managing by my instincts. I’d be embarrassed to compare my business skills with business professionals in a public forum. I never went to business school. I wasn’t taught how to read a p&l statement or negotiate a lease. I was a trial lawyer and then turned around one day and found I had a business.”

The reality is that “you don’t learn anything about the business of law in law school,” says David Casey ’79, managing shareholder of the Boston office of Littler Mendelson, a San Francisco-based labor and employment firm. “I see my work as a continual learning opportunity; my clients are business people. Most labor law cases are an autopsy of what went wrong.”

CHANGES AND CHALLENGES

At their roots, law firms are businesses, and as such, grapple with the same competitive issues as the clients they represent. According to the Altman Weil survey, lawyer-managers’ top concerns are mergers and acquisitions, firm profitability and organization, and strategic planning.

“As law firms consolidate nationally and competition increases, there’s more emphasis on the business of practicing law,” says Casey. “Like every other business, we’re inextricably tied to the global economy. We have to look down the road to see what are the opportunities? What are the growing markets? How can we achieve competitive advantage?”

“I see the biggest ongoing challenge as competing and being cost effective,” adds Cetrulo, “to constantly strive for efficiencies at every level, while the cost of running a practice, and the technology that motors that practice, rises.” And while he notes law students could benefit from business training, he doesn’t expect law schools to expand their curricula. “Law schools have enough to do in teaching the art of law,” Cetrulo points out. “Besides, you can’t teach students all the aspects of business. The best you can do is shake them by the lapels and alert them to the fact that they’re entering a very competitive business world.”

Marshall thinks strong firm orientation programs could go a long way in filling the business-knowledge gap for new associates. “You could explain about overhead costs and at what point in the year the firm breaks even,” she explains. “It would help them understand billable hour targets more and the fact that they’re dictated by economics, not by partners trying to get rich.”