Next in this series is a conversation with Mia Stutzman, chief financial officer at Holland & Knight LLP. Stutzman began her career as an auditor at Ernst & Young LLP in 1990. In 2008, Stutzman joined Holland & Knight as director of finance and rose to CFO in 2013.
The single greatest challenge is educating our lawyers and staff on the changes that are affecting the profession. Historically, law firms were not focused on the profitability of engagements, but that has changed. The recession taught us that the traditional law firm model doesn't work anymore — and that we can't continue to manage the organization that way. We have to run the firm like a business, and that means educating our lawyers and staff on basic business practices which are critical to our success. Things like performing due diligence in the intake process, promptly entering time, appropriate leverage, sound expense management, headcount management, discipline in billing and collections all have become more important.
Law firm CFOs have become more externally focused. In my 10 years with the firm, I've seen the finance department's role evolve from that of budgeting, processing transactions and maintaining the firm's financial statements to one of data analytics, development of creative pricing arrangements and direct client interactions. Now, finance maintains pricing, practice operations and business intelligence teams. These competencies were rare in law firms just a decade ago. My role is to steer the continued evolution of the business model and to ensure that we've got the people and the resources we need in order to get to where we need to be.
There is a greater focus on legal project management, or LPM. Clients looking for greater predictability in their legal spend are increasingly requiring us to manage and report on engagements — especially those which fall under alternative fee arrangements. Lawyers have not historically been trained in this area, so we've had to develop the infrastructure within finance to support those client requirements. In the future, we will likely employ LPM professionals so that we can maintain appropriate margins on the work that we do for our clients.
The other trend is related to artificial intelligence, or AI. I believe that you have to truly understand AI in order to effectively use it. We have an innovation committee that includes AI-savvy partners, associates, technicians and even coders. The committee evaluates both the AI tools currently available for lawyers along with our operating processes so that we can decide if AI might be able to be used.
We have built a phenomenal team that supports me, our lawyers, our clients, and most importantly, each other. The finance team shares the same vision; there's respect for what each person brings to the table. We are forward-thinking, and very creative when new problems or needs arise. There are no egos. We're all in this together, and we want to do the best possible job that we can. We try to focus on the solution or the end rather than the challenges. We have our issues — we are far from perfect — but I couldn't ask to work with a better group of people.
I would change the structure of the law firm to provide better incentives for lawyers to adopt the changes happening in the profession. In the future, the billable hour will likely become less important, and AI will likely make labor intensive commodity–type work more efficient. A firm’s most efficient and profitable lawyers are likely not those with the most billable hours. Law firms need to change both the partnership structure as well as the evaluation structure for nonpartners to incentivize efficiency and profitability in serving clients.
I think part of it was comfort. Not that I had ever worked in the legal industry before but I had worked in professional services for a very long time. I was a timekeeper, and I saw that what I had done for so many years could translate into management at a law firm.
Leadership is treating everyone with respect regardless of their position in the firm. It's important to me to listen to other people's thoughts and ideas. There's an old adage that I think is true: don't tell people how to do things, tell them what to do and let them surprise you with the result.
I try very hard not to tell the team how to do their jobs. Instead, I tell them, “This is where we need to get to,” and let them figure out the best way to get there. Sometimes they struggle, and I have to step in, but usually, they just need some guidance or a boost of confidence. Often it’s a matter of being there and making them understand that they are doing the right thing.
I would love to travel around the world and photograph beautiful things. To be successful, I think you have to have a lot of patience and a natural ability to see things that other people don't necessarily see.