Law firms have a problem. As they merge and grow larger, they need to improve how they serve their clients and how they manage themselves. Their clients compare them to their accountants and consultants – how they gather and share knowledge, how they set prices, how they manage projects – and wonder why they lag.
"The expectations are clearly higher … clients are paying more attention to their legal bills," said David Allgood, executive vice-president and general counsel of Royal Bank of Canada. "Law firms are trying to better project-manage, but in many cases it's just glorified budgeting."
Law firms do hire specialists to help them implement best practices – leaders in human resources, knowledge management, technology, finance and marketing. But firms, fixated on finding someone with the right cultural fit, in the end tend to hire talent from other law firms. Or they promote from within, nurturing professionals who joined them early on and retool them for a variety of support roles for which they have no formal training.
Neither is necessarily the best formula for innovation and change.
A few firms have taken a different approach. Osler Hoskin & Harcourt LLP and McCarthy Tétrault LLP have each hired chief operating officers from outside the industry. Tracie Crook, who joined McCarthy Tétrault in August of last year, was the president and chief executive officer of a trust company and before that, a director with TSX Group.
"We've been benchmarking ourselves against other law firms," Ms. Cook said. "We need to be comparing our customer service, our technology and all our internal processes to best-in-class players in the broader industry."
Morrison & Foerster, a San-Francisco-based global law firm whose chief operating officer hails from Hewlett Packard, is another firm that has broken the mould.
"Hiring talented, intelligent and accomplished individuals, who are not themselves from law firms, represents an opportunity and a challenge," said Morrison & Foerster's global director of attorney recruiting, Anand David, himself an ex-investment banking and energy sector professional.
"We have recognized the positive impact that fresh views and best practices from outside the legal profession have brought to our firm."
This is not to say that large firms need to take a chainsaw to their current model. Rather, it means opening up what you might call the hiring aperture to include candidates from other industries, who might bring with them applicable experience and leading-edge skills.
Nicola Dingemans, global chief people officer for Pittsburgh-based law firm Reed Smith, says her firm has been looking for new sources of talent. "Frankly, our clients expect a level of sophistication commensurate with cutting-edge industries outside of legal, so we can't afford to look too narrowly when acquiring talent."
So where should law firms seek out new pools of qualified candidates? They can start by considering their needs in relation to the industries that tend to do each best.
Maybe a firm needs a chief marketing officer who can position it as a thought leader, differentiating its brand through published content and industry events? Consider professionals from accounting, public relations or management consulting firms.
A firm wants world-class project management tools and processes? It may want to consider talent from companies building enterprise software solutions.
A firm needs someone who can help nurture client relationships for loyalty and growth? Professionals from financial services or wealth management have these skill sets honed.
If you need to reduce costs and increase profit, chances are someone from the insurance industry has done it quite successfully.
The quickest, most effective way to bring new capabilities to an organization is to bring new people. There is no shortage of capabilities out there if you look broadly enough.
Carrie Mandel leads the legal and compliance practice at Odgers Berndtson, a global executive search firm. She divides her time between Toronto and New York.