Firms turning to non-lawyer managers

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Attorneys are paid to practice law, but there is more to running a successful firm than racking up billable hours.

With firms large and small looking to be more efficient, there is a growing need for leaders who are business savvy professionals.

“One of the big challenges for law firms is [that] the business climate is changing,” said marketing consultant Elizabeth Ferris.

Mid-size Wisconsin firm Whyte Hirschboeck Dudek SC recently hired Paul J. Eberle, a non-lawyer business entrepreneur, to become its next Chief Executive. He will succeed current CEO Mark A. Miller on November 1.

Ferris, who heads Ferris Consulting in Milwaukee, said the WHD move will “get lawyers thinking differently.”

She is working with several firms on leadership transitions, although none of her clients currently have non-lawyers in a managing partner-type position.

Attorney John C. Mitby said that many firms have seen a shift in the managing partner as a “figurehead” to someone who is more involved with the business side of law.

He has experienced the evolution firsthand. Mitby served as the managing partner at Axley Brynelson LLP in the mid-80s and three months ago returned to that role.

“The expectations for a managing partner have grown considerably,” he said. “Whoever assumes that role nowadays is expected to have a firm grasp on the economics and business of law.”

Shift in philosophy

While only WHD has hired a non-lawyer chief executive, several local firms have placed non-lawyer professionals in leadership positions.

At von Briesen and Roper SC, managing partner Randall D. Crocker works with five non-lawyers who oversee firm operations such as marketing and finances.

“It frees me up to practice law full-time,” said Crocker, who is a business lawyer.

That is the same philosophy behind the hire of Eberle, according to attorney Bruce G. Arnold, managing director of WHD’s Milwaukee office.

In a statement, Arnold said that Eberle’s familiarity with the firm and 20 years of business experience mean “our attorneys can focus on providing the highest quality of legal services.”

The firm established a corporate governance model in 2001 to allow for non-traditional ways of managing the firm, according to Arnold.

But strategic marketing consultant John S. Smock cautioned that there is a risk in putting an outsider in charge in a law firm setting.

Smock said he’s yet to see a firm successfully hire a non-lawyer as chief executive.

“Lawyers do not want to be told what to do, and they really don’t want to be told what to do by non-lawyers,” said Smock, who heads Chicago-based Smock Sterling. “I find it hard to believe that this is a trend.”

Crocker agreed that traditionally there has been conflict between lawyers and managers within a firm because in business situations, attorneys are inclined to say “yes” while administrators are more likely to say “no.”

He said that at von Briesen, he works with the non-lawyer managers to “find a way to say yes.”

In order to for this new arrangement to work, a firm has to recruit the right kind of professionals.

Sometimes that requires hiring someone with a working relationship with the firm, said Mitby, but overall experience may be more important than familiarity with the practice of law.

For example, Axley Brynelson hired its Director of Client Relations after she completed an marketing internship with the firm and its human resources director was promoted internally after working as a paralegal, but the firm hired a firm administrator from an accounting company with the expectation that he would learn to adapt to the law firm environment.

“It’s easier to take someone with the background in accounting and give them the tools to fit in,” Mitby said.

Ultimately, Ferris suggested that the ability of a firm to strike a balance between lawyers and non-lawyers is dependent upon the partners’ willingness to embrace change.

“Firm culture always trumps strategy,” she said. “If the culture of a firm is to say ‘we’re lawyers and we know better’ — that could be a problem.”