Administration vs. management – don’t become the office manager

Law firms are businesses and partners are the owners upon whom the management responsibility falls. As a firm grows, the owners find themselves faced with a myriad of responsibilities in addition to their chosen field of representing clients in legal matters. Lawyers find themselves managing all aspects of a business, oftentimes reluctantly and not very well.

Law firms are people intensive businesses, with labor costs being the major overhead expense. One popular benchmark is that the average firm needs at least 1.4 staff for each attorney, taking a modest firm of 20 attorneys to a total size of 48 individuals. This size of enterprise needs an office manager or firm administrator. This position is generally responsible for five main areas:

• Finance and accounting 
• Human resources 
• Information technology
• Marketing and business development
• Office services 

While all of this daily activity must be efficiently managed, the firm must also be guided in its overall direction. This is the job of the managing partner, whose responsibilities include:

• Leadership
• Operations
• Partner Relations and Compensation
• Planning
• Client Service
• Marketing Strategy

As managing partner, you find yourself spending too much time on the first list, too little time on the second, and all while your personal law practice is withering. You want to, and should, separate your executive management duties from the office administrative duties. Here are some ideas to avoid and manage the inevitable gray area between the two.

Hire or promote a competent office manager or administrator. This is the key position in freeing you up to manage the firm. Your firm may not quite be ready for a CEO with an MBA from Harvard, but devoting energy and resources to finding or promoting the right person will be well spent. Outsourcing can help fill weak spots.

Effective delegation. The simple answer seems to be the best – delegation. Delegation with authority to act is built on trust, so be prepared to devote some time to this – it will pay handsome dividends. You will not delegate to someone you do not trust, so here are some tips for building trust and improving firm operations.

• Match the Person to the Job – a person can be “not your type, but right for the job.” Be open minded to different personality types, their strengths and potential for contribution.
• Delegate Gradually – build on success; confidence will increase for everyone.
• Delegate the Whole Task – don’t split responsibilities.
• Be There, but Not There (leave the person alone) – be available for consultation and direction, but don’t hover.
• Delegate Both Authority and Responsibility – last, but certainly not least. Anyone with a task assigned must have the tools. In the law office setting, that means the authority to expend resources, gather information, take the time necessary, and make a management recommendation that is fairly considered.

Don’t buy the Elixir. Organizational efficiency is a complex, often cultural issue, and no one size fits all. Quick and easy solutions are not available, so avoid simple answers to complex problems, like these:

• “We’ll just do it like the xyz firm.”
• “A seminar/retreat will fix the firm.”
• “We’ve got a consultant; talk to them.”
• “The law firm administrator will handle it.”
• “We have been doing it right for years; no need to change.”

Regular Review; Measure, measure, measure. Management guru Peter Drucker is quoted as saying that “you can’t manage what you can’t measure.” Here are some essential and easy to access measurements available to executive management: 

• Profitability
• Client satisfaction
• Billable hours
• Overhead costs
• Invoice payment
• Trust account compliance

If you are ready to take your firm to the next step, and also to leverage your personal contributions to the firm’s success, ask your firm administrator to contact us.

-by Aline Martin O’Brien