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Financial Literacy – No Longer Optional for Lawyers
By Betsy Munnell –
Last week I had coffee with an old friend and former law firm partner who quizzed me about my post-practice career as a business development coach. We discussed the considerable challenges facing lawyers, young and not so young, struggling to build robust professional networks and self-sustaining practices. We bemoaned the miserable progress (almost none—among large firm equity partners) achieved by women and lawyers of color since we graduated from law school. And he asked me: “So, if you were a law school dean, or managing partner of a firm—what single change would you make, right now, that would make a palpable difference?”
I didn’t need to think about the answer. I practiced law for 30 years. I built a large niche practice. My work as a coach is grounded in that experience. And I know, with absolute certainty, that financial literacy is essential to excellence, and to large scale business generation, in law firm practice.
So: If I could change one thing—in school and practice, it would be to mandate training in business fundamentals: to assure that every lawyer would have the ability to read and understand a financial statement.
We are all familiar with the dilemma:
- Every client worth having wants a lawyer who understands its business and speaks its language– be it in a negotiation or a dispute.
- Young lawyers do not have the luxury of learning business fundamentals on the job—as did I and my colleagues. More often than not, the “school of life” offers slow and spotty training.
- Very few law schools are getting the job done. (One of few exceptions: BU Law is sending the right message–loud and clear.) Yes, they offer, but do not mandate, courses in accounting and financial statements. But the “numbers”-wary students don’t enroll.
- Too few firms prioritize business training, despite its demonstrable benefits: More productive associates, satisfied clients, and, over time, enhanced associate retention and recruiting.
- For most, the best vehicles for teaching business fundamentals: immersive coach-driven business boot camps, just cost too much in billable hours and fees. Even partners attracted to these programs observe, correctly, that existing offerings provide neither the proper context for practicing lawyers nor coaches with adequate (if any) legal experience.
But the fact remains:
A business savvy lawyer is a better lawyer and a better rainmaker. And a business savvy attorney has the best shot at achieving every lawyer’s holy grail: recognition as a “trusted advisor”.
You are a legal professional anxious to bring financial literacy to your firm’s associates, with all the benefits to the firm and its constituents that this implies. Cost, risk aversion, a dread of change–whatever the impediment, you have gotten buy-in from some key partners and you’re willing to keep trying. In a fit of whimsy you suggested, and the firm ruled out, joint-funding from all stakeholder budgets, since each of PD, marketing, recruiting and diversity stands to gain from a strong business education program. But then that would be too novel, and efficient, a fix.
Nonetheless, you can still make your point with this less ambitious, but equally (or more) effective, pilot program:
Bypass the Boot Camp: Bring on the MOOCs
Online education, increasingly available from top business schools, if coupled with strong partner coaching, could offer you the stopgap solution you need.
This hybrid approach can provide cost efficiencies and high quality training, including practical application of core curriculum B-School materials to the specific type of work your associates will encounter. It will require commitment from a highly motivated partner and the support of a practice group anxious to offer essential, practical associate training tailored to the practice’s clients and sectors.
Few lawyers know much about the exploding MOOC (“massive open online course”) phenomenon, though they may be aware of the sophisticated online delivery platforms and digital tools (e.g. ApprenNet/LawMeets; LawFirmElearning) available for associate training (asynchronous, interactive, and scalable; outsourced or homemade). These terrific tools, however, require equally high quality content—so often difficult to develop in house and too expensive to out-source.
Last fall the Wharton School partnered with MOOC market leader Coursera to launch a free suite of MOOCs duplicating its first year curriculum. Offered in the proper context, with thoughtful in-house guidance, The Wharton Foundation Series could teach associates the basic business and finance skills without which they cannot become the “trusted advisors” their clients want and need.
The key to the MOOC-based business skills program I have in mind is the team of partners, senior associates and staff enlisted to “translate” the B-School material to the real world of law practice.
How to test the hybrid approach:
- Identify a motivated, aggressive practice (or sector) group. Enroll 5 to 10 of its associates in Wharton’s free Introduction to Financial Statements MOOC, and have them absorb lectures, materials and exercises on their own schedules.
- Enroll a staff member as well, who will monitor the curriculum and direct the project.
- Anchor the pilot with a knowledgeable partner committed to investing the hours to guide a capable content team (senior associates? KM or contract lawyers?) in developing practice group-specific materials contextualizing the B-School material.
- Schedule weekly or bi-weekly group sessions during which the partner will describe specific deals and cases, and the market challenges faced by selected firm clients, to “connect the dots”.
If your pilot works, then partner formally with Wharton and make it perfect; consider Harvard Business School’s more rigorous HBX-CORe program; or custom-order a JD-coached boot camp carefully tailored to your firm’s marquis practices.
An important aside:
The ideal program, of course, would also train participants to translate business fluency into more productive networking and business generation. As a coach and former practicing lawyer who was often the only woman at the negotiating table, I know how crucial financial literacy can be in leveling the playing field…. Without it many lawyers will find themselves fast falling behind the competition.
Training in business fundamentals will enhance recruiting and brand, build client appreciation and confidence and, most importantly, develop smart, skilled and satisfied associates and future rainmakers. The hybrid model described here would be less expensive than a boot camp. And it would be better.
Betsy Munnell is a consultant and business development coach committed to helping the next generation of lawyers — both partners and associates — navigate the uncertain waters of a profession and an economy in flux. She brings to her work the wealth of knowledge she acquired as a partner and deal lawyer for 25 years at Edwards Angell Palmer & Dodge (now Edwards Wildman & Palmer). Betsy is a graduate of Harvard College and Harvard Law School, and a vocal advocate for women and minorities in the workplace.