Unlike their predecessors, today's law school grads will not enter the profession of law. Instead, these ripe legal minds will enter the "business of law."
As the sea of tassel-laden robes swish around the country, law school graduates are metaphorically running head first into the wall portal leading to Platform 9 3/4 and jumping onto the Hogwarts Express that will transport them into a new world of work. They are likely approaching this new era with mixed emotions, specifically excitement and terror. Rightfully so. Excitement to have indeed earned a Doctor of Jurisprudence, which is no small task. And perhaps terror that now is when the rubber meets the road. Indeed, the "all nighters" and the tests have not disappeared; they are simply changing.
As I shared at a Penn Law Symposium, The Business of (Big) Law, earlier this year, today's law school graduates are not entering the same world as their predecessors. In the current legal market, these new entrants will be asked to prove their value to the firm much sooner than in years past. It used to be that new associates in most firms didn't have to worry about much of anything except billing time for the first five years. Putting in the hours was the badge of honor and a surefire way to demonstrate both loyalty and value.
But the legal world has been turned on its head since 2008, and despite wistful hopes to the contrary, the industry is simply not returning to its former equilibrium. This new world order includes business concepts heretofore blissfully ignored by the legal industry, from project management and managing matters to detailed budgets; fixed and alternative fee arrangements, particularly for commoditized work; e-billing that provides external visibility to competitors' rates; panels and "beauty contests" to win work; and clients who know more about your firm's lawyers and their results than the firms who employ them.
That said, as Aric Press espoused at the same Penn Law conference, Big Law isn't dying, though parts of it are being tested. Indeed, he believes that both the present and the future of Big Law are strong — and I concur.
But what does that mean for the new law school grad? Facing this new world order, what should a freshly minted attorney do?
My best recommendation, in addition to the obvious requirement to provide the best possible legal advice and service to your clients, is to make friends with the two business professionals at your firm who can help you become a successful (read: "profitable") lawyer: The Chief Financial Officer (CFO) and the Chief Marketing and Business Development Officer (CMBDO).
Understanding the finances of the firm is critical. And though math may not be your strong suit, it's really not that complex. Your CFO can help you decipher the profitability of the practice in which you work, your individual profitability and even your profitability on a matter by matter basis. Financial dashboards can make this information easily accessible, but you must understand the core calculations for it to truly benefit you.
In the bigger picture, it’s important to know how the firm makes money beyond just counting total revenue. Operational overhead (the cost of the offices in which you work, furniture, the technology you use and the expensive infrastructure systems that ensure you can connect anytime from anywhere, paper clips and legal pads, and the cost of salaries to attorneys and staff alike) must play into the equation in order to get to the one metric that matters most: profitability. Just like a personal budget, the amount of money that comes in must exceed the amount that goes out.
Knowledge is power, so empower yourself. If you understand the financial metrics, you cannot only better evaluate your current position, including your position of leverage as you negotiate your compensation, you can also know what to look for when you consider changing firms down the road. And you'll have a baseline to evaluate opportunities outside of a law firm, whether they are in a corporate legal department or outside law altogether.
If you plan to make a run at partnership — or just want to experience the rush of bringing in a client — learn early how to develop business. This is where your CMBDO comes in. And if you think law firm associates don’t have to be concerned with business development, read this interview with John Quinn.
It used to be that bringing in business was a factor of wining, dining and attending lots of sporting events in box seats with General Counsels or business owners who wanted a friend and, as Aric Press reminded us, a trusted advisor to handle their legal work. Now, for many of those potential clients, there is more to the equation as they, too, must contend with budgets, overhead and profitability.
Business development (BD) is a simple process, but it isn't easy. Consequently, you would be well served to get to know the people who can help you accomplish this task. (Hint: Generally speaking, this will not be the big rainmaker lawyers at your firm — most of them aren't even sure how they bring in business; they often simply have a natural ability to do so.) But your CMBDO and the BD professionals on the team can help. These professionals can remove the mystery from the BD equation and dissect the process into its component parts that include market research combined with an outreach and follow-up process. These professionals can also help you create a personal brand that leverages your firm's brand — but that's about LinkedIn and other professional profiles, blogs and scholarly papers, which is a topic for another day.
As you begin your legal career, remember that you are in a business, an honorable business to be sure, but a business nonetheless. So whether you plan a short or long career in a law firm, remember to leverage the expertise of the business professionals who can facilitate your success.
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Amanda K. Brady is a Managing Director and the Global Practice Leader of Major, Lindsey & Africa's Law Firm Management practice. Based in Houston, Amanda has 15 years of executive and legal search experience, the last 10 of which focused on building executive management teams for AmLaw 100 and 200 firms. She has in-depth of knowledge of the challenges the legal industry has faced and the transformations law firms and corporate legal departments have had to undergo to meet changing market demands.