At this fall’s Decipher Talent Economics Roundtable, hosted by Baker McKenzie in Chicago, we showcased the critical role operations teams play in driving law firm profitability. While investment in human capital (lateral hiring) is a near universal growth strategy, its success hinges on effective operational support. Operations professionals leverage data to inform hiring decisions, revise hiring strategies, and ensure strategic alignment. Beyond the hiring process, they often help onboard laterals and integrate them into the firm, maximizing their impact and contributing to the firm’s overall profitability goals.
Our panelists, including Ann Rainhart, Chief Operating Officer at Fredrikson & Byron, and Keith Maziarek, Director of Pricing and Legal Project Management at Katten, not only covered integrating and onboarding laterals, but topics such as empowering attorneys to handle tough conversations about billing and rates, keeping your growth strategy out of a silo, and building a winning culture.
Supporting Data-Driven Change
The presentations and discussions at DTER covered the current state of play for law firm profitability and growth. Lateral hiring, combined with incremental realization enhancements, and rate increases, remains the fastest pathway to growth. The success of a firm’s hiring Bstrategy depends on two critical factors: the quality of data informing the investment in the right talent and the effectiveness of integrating lateral hires into the firm’s culture and strategic goals.
As Ann said, even if your growth strategy makes sense on paper, your firm still needs a systematic level of discipline to follow through with those plans. If your firm has plans to open a new office, it’s imperative that the firm analyze relevant talent pools in top locations to ensure there is enough breadth and depth to sustain a prolonged growth initiative.
Tripp O’Connor, CFO of Alston & Bird, covered four common lateral partner integration approaches in his session:
- Welcome! Now get to work: This approach leaves a lot to chance. While it requires the least amount of effort and thought (none at all!), it also increases the risk that your lateral partner will feel alienated, unsupported, and unsure where they fit in or what they’re expected to deliver to help the team.
- Buddy or navigator: This approach, pairing a lateral hire with a peer attorney for onboarding, is a step in the right direction. But is that navigator thinking holistically and about the growth strategy when offering guidance, or simply providing advice that serves how they work best?
- Business development group: Your firm has a dedicated team for business development and laterals are assigned to work with them during onboarding. Again, another step in the right direction, but…
- Everyone is on board for onboarding: This is the best approach, ensuring that the growth strategy is top of mind. Multiple partners, practices and offices, who’ve all been briefed on the strategy behind new hires, are engaged to support laterals so key objectives are met.
Empowering Attorneys to Understand Their Value
For your law firm, one prong of your growth strategy almost certainly centers on rate structures. William Josten, Director of Pricing & Legal Project Management at Thomson Reuters, shared profitability data at DTER that highlighted a trend in increasing rates but declining realization. Data shows law firms have leverage in raising rates if they hold firm on collections.
But asking your attorneys to tell clients “pay up” is easier said than done. The best operations teams have empathy for their attorneys, understanding the difficulty of a financial conversation where a personal, albeit business, relationship has been established. It’s human nature for attorneys to give up leverage in this situation and offer a discount.
Here’s where operations can stress the value of discipline in these billing conversations. Provide attorneys with data that backs up the value of their brain power in the market. Prepare attorneys for these conversations to help them manage fear. Operations teams can not only support lateral hires but also merged teams by empowering attorneys to understand their value in the market. DTER participants shared examples of lift-outs and mergers where the incoming team of lawyers charged rates that were half of the acquiring firm’s rate and how operations teams, through conversations like these, supported the incoming team to buy into the higher rate strategy.
Spreading the Strategy and Growth Mindset
Whatever the growth strategy, don’t be afraid to promote it. By understanding your position at the intersection of legal practice, business operations, and profitability, you can provide valuable insights and objective support for strategic initiatives. While change may encounter resistance, as Ann suggested, focus on collaborating with colleagues who are receptive to new ideas and are committed to improvement. This approach fosters trust and creates momentum for lasting and impactful change.
This year’s DTER concluded with a roundtable discussion that gave our attendees an inside look into real-world growth strategies in action. Kristina Gajewicz, Director of Recruitment at Baker McKenzie; Susan Hollender, Chief Growth Officer at Michael Best; and Angela Floessel, Global Director of Strategic Pricing and Project Management at Morrison Foerster, shared what they’ve learned in supporting hiring strategies of all sizes.
If you’re interested in discovering how data can power a sustainable future, join industry leaders at next year’s DTER where you can explore innovative solutions and network with experts. Contact Decipher today to learn more.
