Peer to Peer Magazine

organizations in a hypercompetitive market. These two factors — economic and educational — will drive future change. Economic Factors Clients have challenged firms' hourly rates and now expect advanced matter management. Both play a central role in the industry's economic evolution. • Fee Challenges: Firms understand a new reality: The legal industry has become a buyer's market. Clients are in the driver's seat, and they have their sights set on outside counsel's fees: hourly discounts, alternative fee arrangements and, most recently, procurement. According to BCG Attorney Search: "The downward pressure on fees has resulted in those firms unable to meet the service and pricing expectations of the market losing out on certain types of work, while other firms have only managed to maintain some presence…at substantially reduced margins." Law firms are losing control of their fees. A new world of pricing and procurement is emerging within the industry, and a law firm leader will need to understand these principles. • Matter Management: When Michael Lewis' "Moneyball" hit the market in 2003, baseball — and the world — opened their eyes to the potential of data. The idea a major league sports team could be successful using analytics was revolutionary. Progressive law firms took notice, and, as big data continued to grow, the idea of analytics gained credibility in matter management. With the proliferation of software to capture and report an abundance of metrics (also known as business intelligence), law firm leaders have a new world of analytics at their fingertips. In fact, an ILTA presentation in 2010 highlighted more than 30 performance metrics large firms were tracking. For many firms, business intelligence has come of age; a successful law firm leader will need analytical skills. Educational Factors Feeling the effects of economic factors, firms are realizing lawyers are not educated to manage businesses, nor do they have the time. • Lawyer Education: More than 20 years ago, the American Bar Association (ABA) issued its "Legal Education and Professional Development" report, which highlighted lawyers' limited business acumen: THE EDUCATION OF A LAW FIRM CEO By 2020, lawyers will understand law firms are businesses and that business-minded people must be at the healm. However, firms will be challenged to find qualified candidates ready to lead law firms, unless our industry supports educational programming to prepare CEOs. Fortunately, there are a few models that can lead the way. Several industry stakeholders have been building educational programs for more than a decade, both at a certificate level and a graduate level. ASSOCIATION OF LEGAL ADMINISTRATORS (ALA): Among its many educational offerings, ALA developed the Certified Legal Manager (CLM)SM program, which allows a qualified legal administrator to demonstrate, through an examination process, a mastery of the core areas of knowledge identified as essential to the effective performance of a principal administrator. Today, around 400 law firm professionals carry the CLM designation. Any law firm serious about hiring a wellrounded, well-qualified professional to lead the business of the firm should consider someone with a CLM designation. 52 UNIVERSITY OF DENVER: The nation's oldest program is found at the University of Denver. The university's Sturm College of Law began a court administration program 40 years ago, adding law firm administration in 1981. For more than 30 years, the Master of Science in Legal Administration has prepared students for the business side of law firms: accounting, statistics, human resources, financial management, marketing, recruitment, etc. THE GEORGE WASHINGTON UNIVERSITY: The university offers both a certificate program (12 credits) and a graduate degree (30 credits) in law firm management. Both curricula include courses on leadership, economics and profitability, strategic planning and management, talent management, and market assessments. The master's degree adds knowledge management, legal technology and process improvement. While not designed to educate law firm CEOs, these programs provide the industry with several options for obtaining the executive-type education a law firm CEO will need to be successful. Peer to Peer

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