Avoiding Pitfalls in the Practice Group Structure
The popularity of the practice group — an entity within the firm dedicated to practicing a specific kind of law, or serving a specific industry — seems well grounded, in that it offers a number of advantages to managing a practice and its services. But with all its advantages, there exists an easy propensity to misuse the practice group concept, even as it strives to serve the firm’s objectives.
The evolution of the practice group as a management tool is, on its face, logical. It meets the need to direct and focus the specific skills inherent in each practice. And as the concept evolves and grows in popularity, its advantages continue to emerge as significant, overwhelming any possible disadvantages. But if its potential is to be fully achieved, experience warns that the possible downside should be anticipated as well.
Certainly, cautions should be observed.
The advantages of the practice group to both the firm and its clients are clear.
- The practice group concentrates the skills of a specific practice in one manageable entity. By being able to better manage the practice group’s skills, quality of performance is easier to sustain.
- It allows the firm the opportunity to focus and present the skills of the practice to clients and prospective clients more forcefully and cohesively. It raises the profile of the group’s practice, both within and outside the firm, and makes the skills more visible to others in the firm.
- It controls the flow of work more equitably and efficiently, and it facilitates the flow of information. It affords a more disciplined approach to enhancing and sharpening skills.
- The consummate experience of all the lawyers in the practice make those skills and capabilities highly marketable. The total becomes greater than the sum of its parts.
- If each group is made a profit center, billable hours and profitability are easier to measure.
- The increased visibility of the practice within the firm enhances cross selling.
- With good practice group leaders, it broadens the base of the firm’s management.
- It increases the status, both within and outside the firm, of the group’s attorneys.
- It enhances recruiting efforts, both by giving weight to the firm’s practices and by allowing prospective hires to understand the spectrum of services to which they might be exposed.
For the growing firm, it seems an easier and better way to go. But as with any good idea, there is a potential for a downside as well. Emerging experience shows that.
- Practice groups can become insular, moving away from the strengths of the entire firm. As significant as a practice group may be in a firm, it is rarely the entire practice. In a well-managed firm, there should be a cohesiveness that transcends any individual and any practice. The firm, not the practice, comes first.
- The practice group is only as good as its leader, and not all fine lawyers are fine managers. If the practice group is the indeed way to manage the practice, then the practice group leader must be a manager. In this context, he or she is a manager first, and then a lawyer. The concept doesn’t work when the job is given to the lawyer who has the seniority, or controls the biggest client, instead of to the lawyer with managerial skills or talent.
- Practice groups can become competitive within the firm. The success of one practice group can overshadow the lesser success — or profitability — of another.
- Practice groups can become entrenched in declining or static practices or industries. A practice may be successful and profitable in serving clients in static or declining industries, and ignore the opportunity to build for the future in serving clients in emerging industries.
- Practice groups can lose their focus on the overall firm objectives. Given a measure of success and autonomy, the practice group can have a tendency to veer off on it’s own, and to stray from the firm’s objectives and culture.
How can these pitfalls be avoided, without losing the advantages of the practice group concept? These guidelines can help:
- While it would seem obvious that a practice group is comprised of lawyers in a specific practice, it should be remembered that in any law firm of any size, service to most clients can and should transcend any one practice. A real estate client can become a litigation client, for example, or a domestic client can become an international client.
- There should be, then, the mechanism for easy communication and interaction between practice groups, with periodic meetings of practice group leaders and the firm’s managers.
- Take the time to clearly define — on paper so that everybody understands the same things — the role of the group, its structure, its practices, how it’s to relate to the firm and other groups, how skills are to be maintained, how information is to be managed, and what is expected of the group and each of its members. When a group sits down to do this as a team, it’s amazing how much more efficiency gets built into the process.
- Managing a practice group is a professional process. It’s like managing a firm or a company or a division of a company. The skills needed to do it successfully and profitably go beyond the traditional partnership skills, and many exceedingly competent lawyers are not necessarily competent managers. Fortunately, these are skills that can, to a large degree, be learned. Take courses.
- The practice group structure itself must be managed by the firm. There should be periodic meetings of practice group leaders, and the firm’s managers should monitor regularly each group’s activities. This is crucial for the success of the process for two reasons — it’s necessary to sustain the quality of each group, and it’s necessary to assure that the relationship between the groups and the firm at large remain close and consistent. It affords interchange of ideas, and keeps both practices and marketing efforts consistent with the firm’s performance expectations. It allows each group to stay abreast of what other practices are doing, as an aid to better serve clients, and it assures that each group is using the resources of the firm to the fullest.
- Practice groups’ objectives must be consistent with the firm objectives. What does the partnership want for the entire practice? What size firm? What kind of culture? What kind of growth? How does the individual practice group fit into those objectives? How does the group’s culture fit the firm’s culture?
- Look at the market. Evaluate your clientele in three general categories — those in declining industries, in static industries, in growth industries. If the preponderance of your clients are in static or declining industries, you have to make decisions about potential return on investment in seeking clients in those industries. While they may be very profitable, they offer limited growth potential.
- How does the group’s marketing effort fit with the firm’s marketing efforts? Devoutly to be avoided is a practice group’s marketing efforts that sell a different firm than the firm’s marketing program is selling.
- The practice group should be real, and not just a marketing gimmick to imply that a firm has more depth or skill than it really does have. While it’s true that in both small and large firms lawyers will practice in several different specialties, and thereby function in more than one practice group, the skills within each group should nevertheless be substantive. The clients — and the marketplace — are quick to discover a sham.
- Ultimately, the practice group is a managerial structure. Clients are not concerned with managerial structures — they are concerned with your ability to serve them — to solve their problems. What the practice group must say to a client is not that it’s a function of your organizations – but that it’s a structure to better serve the clientele.
The decision to organize a firm into practice groups, then, requires thoughtfulness that takes it beyond a fad. The alternative, of course, is to focus on a full service concept, and certainly, with or without the practice group structure the client should see the firm as a full service firm. But given the advantages of the practice group, and with full awareness of the possible downside, the practice group may be the better way to go.