Running a law firm like a successful business unit entails identifying the different functions that can help the firm organize the firm’s affairs, in order to grow efficiently. In this first part of the two part series, we will identify such crucial non-legal functions that every law firm should have:
The Firm Canvas
Operations: This department’s functions touches all aspects of the business. The operations department influences other functions within the law firm that contribute towards the mechanism of the firm’s overall functioning. The head of this department ensures that a business has the proper procedures and systems in place, to effectively grow the organization and to ensure financial strength and operating efficiency. The Chief Operating Officer effectively serves as an overall glue for the firm as a business unit.
The Operations Department also focuses on developing and maintaining the financial well-being of the firm. This team is responsible for providing the firm’s management team with financial projections and accounting services, to enable the firm to make informed decisions for strategic growth. The accounting team is also responsible for billing and payments, client follow ups in case of receivables and other such functions that can help maintain a steady working capital for the firm to function.
Strategy & Business Development: The crucial role of this department is to build a firm’s brand in the market through strategic positioning and business development. A strategically positioned law firm resonates with us in a significant way, and create its own individuality. The firm should own the category it aspires to be positioned in, and ideally should be the first in a position. Differentiation is the key!
Brands which are based on an idea vs. a service product, can help the firm to sustain on its own terms and yet grow as a business. “Client oriented,” “Going the extra mile,” and “Attention to detail” are not positioning statements. The idea has to big enough, and the firm has to be keen on creating a balanced approach and ingrain their philosophy not just internally but to its target market as well.
This function focuses on the firm’s growth in terms of business, but in a strategic manner while aligning with the firm’s long term objectives. The team may focus on a variety of high level strategic tasks, including leading the development of the firm’s growth though mergers, acquisitions or company reorganizations, while being truly involved in creating opportunities and accepting ownership of growing the company’s business.
Human Resource Management: An efficient HR department can enhance the firm’s work force strength by planning, implementing, and evaluating employee relations and human resources policies, programs, and practices. Your employees are your assets. In a service based industry, your talent is your product and your capital, and it is crucial to value and develop your in-house talents. Investing in the development of your talent is a guaranteed approach to not only new client acquisition, but also ensuring your existing clients are satisfied. In this highly competitive industry, clients have too many choices for legal service providers.
Also, in-house talent development sends a strong message to your clients: “We have a commitment to provide you with the best.” You also send an important message to your team: “We value your contribution and want to ensure that you have a fulfilling and successful career with us.”
Digging Down Further
Now, let’s identify the sub-functions that are centralized within each of the above mentioned departments:
Operations: Since this is an overarching department, with its responsibilities spread across various functions of the law firm’s practice, the various sub functions within it will include:
Systems & Information Technology
Finance & Accounting
Strategy & Business Development: The main focus of this department being the firm’s reputation and positioning in the market, and the business growth from a strategic level, the primary sub functions within this department include:
Client Development & Management
Human Resource Management: With this department’s key focus being internal resource development and talent management, the crucial sub functions include:
In the second part of the series, to be published in the Jan 2017 issue, we will elaborate of the various roles each of these sub functions play within the law firm, and the reasons for centralizing them in the respective departments.
This article was first published in Lex Witness December 2016 issue.