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Efficient practice management pays off

23 May 2014

Legal practice management is becoming increasingly recognised as a career in its own right.

Practice management is a “really unique thing to do and it is really hard to find people who have experience in every area that you need to have experience in,” says Lowndes Jordan’s general manager Sheryll Carey.

However, she is not convinced there should be a degree or diploma in the subject.

“Most [practice managers] tend to have an accounting background. You couldn’t put a [new] graduate into a practice manager’s role because they don’t have the experience necessary to advise and support businesses owners and manage staff,” she says.

Ms Carey, who is leading the Australasian Legal Practice Managers Association (ALPMA) New Zealand Committee and establishing a local presence for the organisation in New Zealand, says a degree in commerce is a helpful foundation for practice management.

The Sydney-based ALPMA President Tony Bleasdale has a similar view.

“Often accounting or finance roles are a good foundation for a practice management career. Key is the ability to deliver projects and to a plan or budget,” he says.

Because a firm will generally have overarching strategies and goals – such as practice growth, core legal practice specialisation, accessibility to clients, pricing or similar – firm managers need to be able to manage multiple strategic visions and supporting strategies, he says.

Another vital skill is the ability to develop trust. “When firms are rapidly changing and growing geographically through mergers and acquisitions, that will only work in an environment where key players feel there is a safe pair of hands overseeing the project,” he says.

Legal knowledge versus client knowledge

While legal knowledge is definitely an advantage when coming into a legal practice manager role, it is not necessarily the most important quality in a practice manager.

Mr Bleasdale advocates for the importance of leadership and industry clout.

“Whilst legal knowledge is a benefit, a good law firm leader has to be a person who can listen, lead and deliver,” he says.

With former PricewaterhouseCoopers chief executive Tony Harrington set to become the new Minter Ellison chief executive in Australia from 1 July, and the second non-lawyer head of the firm in the past decade, it appears legal skills are being put second to business skills when it comes to management positions.

“The role of chief executive has to be one of awareness of not only the legal industry but industries that their clients might be in,” Mr Bleasdale says.

Practice managers linked to firm profitability

The Moore Stephens Markhams Auckland legal practitioners’ performance survey 2013 stated that the benefits of partnership and the use of practice managers appear to have the biggest influence on financial success.

“Small to medium legal firms, if run efficiently, can provide significant net income to equity partners,” according to the report.

This was the first Auckland legal practitioners’ performance survey where firms were asked if they used a practice manager. The survey has been running since 2006.

The report, which surveyed 18 firms across Auckland, stated four out of the top five firms (as determined on a per equity partner basis) employed practice mangers.

A practice manager’s salary ranged from $68,000 to $140,000, with the top firm paying the highest salary to its practice manager.

“Smaller and medium-sized legal firms have identified that quality practice managers are more than worth their salt, and those firms with someone focusing on running the practice as a business are quite successful,” Moore Stephens Markhams director Sam Bassett says.

Ms Carey admits that as a practice manager you are aware you are not directly bringing in clients.

“You are conscious you are an overhead. But, at the end of the day, it means [the partners] can get on with their legal work, charging out at x charge out rate, whereas they are paying you at a salary. So there is always going to be a gain,” she says.

ALPMA

Practice managers, like any professional employee, need ongoing training and development.

“[Law firms are] recognising that being a specialist in one function for a practice manager not only restricts the manager but the firm,” Mr Bleasdale says.

“Keeping up to date in relation to applicable law changes such as employment law is vital,” Ms Carey says. “There is very little specific training as such offered in New Zealand, which is why ALPMA starting a New Zealand chapter is such a positive move for all practice managers in New Zealand.”

The 2013 ALPMA summit was attended by 18 members from New Zealand and the content was centred around changes impacting on law firms, ranging from the future of law firms, leadership, change management, practice succession and IT.

“In addition there is also an opportunity to talk to industry providers on new products to improve productivity,” Ms Carey says. “The role is so varied you need to know a lot about a wide range of tasks.”

Last updated on the 17th March 2016