Content Solutions for Business

Monthly Archives: February 2012

Globe column advocates return to the past

I found this Globe and Mail article by law firm recruiter Carrie Mandel somewhat humorous and a throwback to what has been tried before and not always worked at law firms.

Mandel advocates that law firms reach beyond their current hiring practices and bring in people from industry to run their firms. I am not going to debate that a fresh eye is welcome.

Mandel praises Osler Hoskin & Harcourt LLP and McCarthy Tétrault LLP, (clients perhaps?) for hiring COOs from outside the legal business and suggests it’s something new.

Not even close. It’s a cycle that law firms have been going through over the past 40 years. In 1980s and early 1990s, law firms often had a chief administrator who was usually an accountant or management consulting professional. Then the trend in the early 1990s was for law firms to hire CEOs from outside the legal industry. That was an abysmal failure and most leadership structures today at the big firms have a partner at the helm.

Why? Because lawyers own the business and most lawyers are not prepared to take marching orders from non-lawyers nor should they as business owners.

Mandel argues that firms reach outside for things like marketing directors. In 20-plus years of writing about the legal profession — starting when there were only a handful of marketing directors at law firms — I’ve seen that with mixed success. (I remember one firm that hired someone from the cosmetics industry. The person lasted maybe six months. There are many others who have stopped in for a cup of coffee before moving on.)

Making the leap from a business with a CEO structure, with one person in charge, to an environment where you have multiple owners is a challenge that many cannot handle.

Mandel is right when she says law firms can learn from people who come from other industries. But it’s just not that simple. Their success will depend on their ability to juggle the challenges that come with working in a partnership model. It’s not for everyone and it is not a panacea.

Canadian law firms fail to make the China grade

Maybe Prime Minister Stephen Harper should have taken some law firms on his trip to China this week. The China Briefing Magazine and Daily News Service reports that only one Canadian firm has a presence in mainland China. That ranks us right up there with the UAE, population 7.5-million.

Belgian, Spanish, French, Swedish and Brazilian law firms have more offices in China than Canadian firms. Pathetic! Meanwhile, law firms from the U.S. have 90 or more offices. Only Blake, Cassels & Graydon was mentioned on the list as having a representative office. It’s in Beijing.

China is poised to become Canada’s second largest trading partner. Chinese investment into Canada’s energy patch is in the billions. You would think that Canadian law firms might be interested in establishing local relations. Apparently not.

Yet, law firms from foreign countries that are smaller than some of our biggest firms have made such an investment.

Canadian law firms have been reluctant to invest in bricks and mortar abroad, choosing instead to focus locally and fly lawyers into foreign hotspots and build relations with local firms on the ground. That works in a world of independents. But the world of law firms is rapidly consolidating.

The Norton Rose merger with Macleod Dixon and Ogilvy Renault has no doubt prompted many Canadian firms to reassess their international strategy. Expect more mergers. If you’re a Canadian firm, chances are those merger partners will come from the firms on the China Briefing list. They are the ones with vision and the willingness to invest in the future and take on risk. Canadian firms are totally playing a defensive strategy focused on protecting the home market.

Sadly, it’s unlikely there will be many stand-alone Canadian law firm brands in the future. Like many of our companies, our legal industry will simply be branch plants of a bigger organization run offshore. It’s the Canadian way.

Jacoby & Meyers tackles law firm ownership restrictions

In a follow up to yesterday’s blog, I see that U.S. plaintiff law firm Jacoby & Meyers is taking a run at ownership restrictions on law firms in New York. They argue that state laws prohibiting non-lawyers from participating in law firm ownership are unconstitutional. This Thomson Reuters story suggests the firm is not going to prevail. But its arguments are interesting. In the lawsuit filed last May, the firm argued that the rule unfairly cuts them off from private equity funding and restricts individuals from getting help from law firms.

The Slater & Gordon advantage

Canadian law firms are privately held organizations owned by the partners. But that’s not the way it works everywhere in the world.

Take Australia, which has allowed its law firms to tap the capital markets and raise money from investors. One of those firms is Slater & Gordon. It has shareholders and trades on the Australian Stock Exchange.

On February 6, 2012, the firm made a notable move. It announced that it was “acquiring” a UK law firm, its first overseas move.

By tapping the capital markets, Slater has been able to acquire capital and begin to build out a world-class law firm. Granted, Slater & Gordon is far from a corporate law firm. It’s a class action plaintiff firm.

That is neither here nor there. The point is that Canada, by preventing its law firms from being able to raise capital in a similar fashion, puts its law firms at a competitive disadvantage to their global counterparts. Why can’t a Siskinds or a Koskie Minsky be allowed to pursue a similar strategy in pursuit of justice for their clients. (Class action practices require hefty capital to carry cases.)

Other jurisdictions, such as England, are loosening restrictions on who can own a law firm and now supermarkets are entering the legal game. Canada is falling behind and needs to reconsider who can own a law firm. Access to justice is too precious to let stodgy concepts or regulation and old ways of doing business get in the way.

Canadian law firms and web strategies

My latest column in Canadian Lawyer looks at the top 20 law firms and their internet presence and Klout scores. Klout is a web site that measures online influence by using algorithms to gauge activity and influence in social networks, measuring things like “re-tweets,” “mentions,” “likes,” and “comments.” Klout uses a scale of 1 to 100. For simply existing, you get a 10 and build from there. An average Klout score is about 20, and those who achieve 50 or more sit in the 95th percentile, according to a recent tech podcast.

I ranked the firms according to size and contrasted that with  their Klout scores. It clearly shows that size doesn’t matter, since Canada’s biggest firms scored down the list when it comes to building influence in an online world.

The chart accompanying the story shows which firms are using LinkedIn, Twitter, Facebook and youtube. Clearly, Canadian law firms are at the early stages and there is lots to learn.

Blogging and using Twitter can allow practice groups and individual lawyers to build a community and become thought leaders in their area of expertise. The race is on. Stikeman Elliott is well down the path of creating blogs for their practice groups, with eight blogs.

The gaunlet has been laid. It’s now up to the other law firms to strut their stuff.