Thinking Like a Lawyer Isn’t Enough
By Valerie Fontaine –
Law school teaches you to think like a lawyer but, to succeed in today’s legal marketplace, you also must think like a businessperson. As the legal profession becomes increasingly business-oriented, successful lawyers need to know more than just law. Business and management skills are essential to advancement, whether you practice in a law firm or an in-house legal department.
Knowledge of basic business concepts is almost essential to many areas of practice. Each case or transaction involves money in some way, and every lawyer in private practice is, in fact, running a business. If you didn’t earn an MBA or take business classes in college, you may need to get some basic training in accounting or business for lawyers.
To adequately represent most business clients, in addition to case law and relevant statutory and regulatory schemes, you also must have some knowledge of the client’s business and how it competes within its particular industry. This is especially true if you want to practice in-house, where a good legal department is a respected part of the business team. You interface regularly with executives and personnel at all levels of the company’s operations, and must speak their language. Whether practicing at a private law firm or in-house, you need to understand your clients’ objectives and the importance of any particular day-to-day legal question to the overall success of their business.
At minimum, you must be able to read and understand balance sheets, profit and loss statements, and annual reports, and perform some basic statistical analysis. Business lawyers also need to comprehend the workings of the domestic and international private and public financial markets, stock markets, and financial institutions. You also need familiarity with your client’s business structures, internal politics, and decision-making processes. In addition to keeping up with changes in the law, you should keep abreast of business trends by attending seminars and reading financial newspapers such as The Wall Street Journal and your clients’ industry trade papers. Of course, a wealth of information is available online. This kind of knowledge allows the legal role to move closer to the business function, thereby becoming more aligned with the client’s overall decision-making. Thus educated, you become a “trusted advisor” and a much more valuable resource.
Lawyers in private practice with business competency are more effective contributors to the success their firms. Regardless of your seniority and status within the organization you should think like an owner. Seek to understand the business aspects of your firm, including its structure and governance, revenues, billing procedures, and competitive environment, as well as trends in the legal community at large such as mergers and globalization, so you can contribute to your firm’s overall success.
Take responsibility for acquiring the necessary business education. You might also fulfill some of your CLE requirements by availing yourself of classes offered by your firm as well as in the broader community. If your firm is one of the growing minority that partners with top business schools to create specialized law firm management programs, do everything within your power to attend. If not available at your firm, look into other organizations that provide business training to the profession at large.
In-house training programs for lawyers from senior partners to junior associates and even non-attorney staff now include not only programs on delivering quality legal services, but also on how to be a good businessperson. Topics include management, leadership, finance and law firm economics, marketing and business development, knowledge management, and project management.
Many bar associations and continuing education providers offer business and management courses for lawyers. Online resources include the American Bar Association (www.americanbar.org) and West Legal Education Center (westlegaledcenter.com), which collects business and legal education programs from the Practicing Law Institute, the National Bar Association and many others. General business programs and materials are available, for example, through the American Management Association (www.amanet.org) and the Conference Board (www.conference-board.org).
Law schools, also, see the need to teach business skills in response to clients’ increasing preference for attorneys who know how to meld the law with business goals. Increasingly, they offer courses on law firm and practice management within their JD programs. To succeed in the law firm environment, new attorneys must be familiar with concepts such as realization, utilization, leverage, and law firm terminology like WIP (work in progress), origination, RPL (revenue per lawyer), NIPP (net income per partner), and much more. Moreover, industry-specific knowledge is critical for lawyers seeking jobs inside corporations.
Although your professional plate probably is more than full with the practice of law and business development activities, it’s a wise investment of your time to learn to think like a businessperson as well as like a lawyer.
Blog Author
Valerie Fontaine is a partner in Seltzer Fontaine Beckwith, a legal search firm based in Los Angeles (www.sfbsearch.com). She can be reached at vfontaine@sfbsearch.com or (310) 842-6985. The second edition of her book, “The Right Moves: Job Search and Career Development Strategies for Lawyers,” was published in 2013 by NALP.