Transforming Law Firm Organizational Structure: Why You May Not Need a Lawyer in Charge

Brooke Lively | When was the last time you reviewed your firm’s organizational structure — and challenged the status quo?
The post Transforming Law Firm Organizational Structure: Why You May Not Need a Lawyer in Charge appeared first on Articles, Tips and Tech for Law Firms and Lawyers.

When was the last time you took time to step outside your firm and look at it with fresh eyes? What if you could change your law firm’s organizational structure and shake up the status quo?

As we approach the new year, most of us are doing our annual planning, thinking about what we want to be different or better. Yet, being different and better requires making changes. Otherwise, you keep getting the same results.

Rethinking Your Law Firm’s Organizational Structure

Years ago, I learned that law firms running on the Entrepreneurs Operating System (EOS) have significantly better financial results. As a result, EOS became my CFO company’s No. 1 outgoing referral. Eventually, I became an EOS Implementer myself because none of the existing providers had a deep knowledge of the legal industry — and I definitely have that!

Last week, I spent a full day working with an immigration firm in New York City, helping them implement the EOS. While working with the leadership team to find the right organizational structure, the firm’s owner asked a great question:

“Does the head of legal services have to be a lawyer?”

That made me stop and think. We almost always assume yes, but why? So, while building the firm’s accountability chart, we explored the question.

The Law Firm Accountability Chart

An accountability chart defines the best structure for your law firm. It differs from an organizational chart in that it identifies who is accountable for what and clarifies responsibilities. An organizational chart mainly shows who reports to whom.

When we start an accountability chart, we want a blank slate. We “fire” everybody and get rid of all existing roles and positions.

Creating the accountability chart has four stages:

1. Finding the right leadership structure.
2. Assigning seats.
3. Filling the seats and roles.
4. Building out the accountability chart by repeating steps 1-3 for each leader’s reports.

Stage 1: Setting Up the Leadership Team Structure

The first stage is figuring out which seats the firm needs on the leadership team. For most law firms, we want five people on the leadership team. There is no magic to the number five, but it is a good place to start because it is a manageable number of roles for a person to take on and easy to remember. (For example, what are the five most important things you need them to do?)

Stage 2: Assigning Seats and Roles

We know all organizations (law firms included) have three basic functions:

• Marketing and sales
• Operations (delivering legal services)
• Finance

In this particular firm, marketing and sales were separate, finance had a few other things in it, and we renamed a lot of functions. Eventually, we ended up with four functions:

• Marketing
• Sales
• Production (Legal Services)
• Operations

We then assigned the five roles for each function. Once everybody understood that the people in the seats were responsible for ensuring the responsibilities were met but not necessarily doing them themselves, things picked up speed. Completing stage two was fairly straightforward.

Stage 3: Assigning People to Seats

At this stage, you begin figuring out if you have the right people to sit in the seats, and things get a little tougher. When you put somebody in a seat, you want to make sure they have three things, also known as “GWC”:

1. They GET IT. (Do they understand the job?)
2. They WANT IT. (We often put people in jobs they don’t want. They say yes because they want to please us or it means more money. Either way, their heart isn’t in it.)
3. They have the CAPACITY to do the job. (Do they have the skill set to get it done?)

So, as we started putting people in seats, we asked if that person could pass the “GWC” test. 

When we got to the Production (Legal Services) function, we hit a snag.

And here was the snag. The seat’s roles included managing a large legal team, client happiness, and managing a budget. The owner piped up and said that while some attorneys are good at mentoring younger attorneys, in her experience, they aren’t the best at managing teams. The finance person volunteered that most attorneys went to law school to avoid numbers, so why would we put them in charge of managing the legal department’s budget? And somebody else made the distinction between talking to clients and being responsible for the process of maintaining client happiness.

WOW. As a group, attorneys had just been eliminated from running the legal department. At least in this particular firm.

Shaking Up the Status Quo

It was an unsettling moment. We all spent some time looking at each other, readjusting our expectations — and questioning what we had just said. Was this possible? Could a paralegal or operations-minded person run the legal department?

After a few minutes, we agreed that, yes, this is exactly what we wanted. Just because a lawyer wouldn’t be in charge of running the department, that didn’t mean an attorney wouldn’t be in charge of training, wouldn’t oversee legal work, and wouldn’t be intimately involved with the practice of law. It simply meant the person conducting the orchestra was going to be a professional conductor. We aren’t going to promote the first violin or the soloist to a job they don’t necessarily “GWC.”

By the way, we didn’t find the perfect person to fill the production seat, so the firm is looking outside the firm to hire.

The Power of Fresh Perspective: Transforming Your Law Firm Organizational Structure by Working ON It, Not Just IN It

My biggest takeaway from the day: “If you keep on doing what you’ve always done, you’ll keep on getting what you’ve always got.”

This firm took the time to step outside of the firm, to work ON it instead of IN it and had a major breakthrough. They saw places where they were inefficient, asking people to fill roles that didn’t suit them, and had multiple people in charge of one thing. 

Coming out of the day, they have a clear picture of what they need to do to better run their firm.

When was the last time you stepped out of your firm to look at it with fresh eyes? And were brave enough to challenge the way it has always been done?

More Law Firm Financial Tips From Brooke Lively

For more tips on building a more profitable law firm, read:

• The Best Law Firm Compensation Plans Use the Rule of Thirds
• Understanding Law Firm Bonuses: A Simpler Bonus Structure for Associates, Paralegals and You
• Why You Should Prep Your Law Firm to Sell — Even If You Don’t Want to Sell
• Are Your Law Firm’s Financial Systems Ready to Scale?
• Law Firm Profits: 5 Ways You May Be Sabotaging Your Firm’s Growth
• Law Firm Overhead: What It Is — and What It Isn’t
• Building a Law Firm That Pays You First
• Understanding Law Firm Profits — And What to Do With Them
• How Are Law Firm Owners Paid? Total Compensation vs. Salary