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26 July 1999
Law firm management is a perilous area. My own journey began by joiningthe thenmanagement committee of my firm on a part-time basis.I underwent all the usualpreparation given to law firm managers, namelyschool, university and college, passingexams and advising clients forseveral years. But for business management all that isvirtually useless.My interest in this area coincided with a holiday so I decidedthat,rather than opt for Jack Higgins, I would examine the business section atManchesterAirport bookshop.It was a pivotal decision. I purchased Mark McCormack's What TheyDon'tTeach You at Harvard Business School and Tom Peters' In Search ofExcellence.Theyknocked Jack Higgins into a cocked hat, opening my eyes to theconcept of management asa skill in itself.I have been fortunate since then to listen to presentations from someofthe world's leading management gurus and my bookshelves groan withmanagement texts.Thelaw has become a big business, with firms turning over substantialamounts of money andcreating employment. But law firms are fragilebusinesses.Despite the scale of turnoverin employment within the profession, many ofmy peers exhibit attitudes ranging fromindifference to downright hostilitywhen considering the application of modern managementthinking to thebusiness of law.Even at well-managed law firms, with strong growth andprofits records,management thinking tends to lag behind that found in majorcorporates.Why is this? The reason is simple. There has been significant profit inthebusiness of the law. But market forces are undermining that inherentprofit at a dramaticrate.Competitive tendering, contingency fees and a host of other developmentsare sendingthe same message from the market to the legal profession:clients feel they have beenpaying too much and won't go on paying at thesame rate. They want better services forlower fees.Our plc clients have faced up to these issues and their response has beentoturn management into a science. In doing so, they have been able tosuccessfully andprofitably grow their business.Some management theories can be a little wacky, somedownright wrong, butkey messages emerge. For example, genuinely listening to customersandstaff, and embracing constant change management.Naturally, I am committed to seeingmy own firm thrive and succeed in thistough market, but I also wish to see theprofession do the same. I fear,however, that unless as a profession we embrace modernmanagement thinking,many firms will fail to compete in the coming years and will ceaseto beviable businesses.
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