Law firms around the globe are busy wrapping up 2014, and planning for what they hope to be a stronger 2015. (There is an issue with the way we tend to approach year end, but that is is a conversation for another day.) Amid the flurry of collection activities, compensation and budget debates and meetings, a too often overlooked factor is the way in which we make decisions about law firm leadership.

It is no secret that one of the significant contributors, if not the number one factor in the success (or failure) of any enterprise is the quality of leadership. Yet, when it comes to an alarming number of law firms, the value of the specific experience required to build a highly functioning organization are vastly under-appreciated.

Today, around the world, law firms are addressing leadership issues — whether changes or initial appointments — by turning to the partner/shareholder that has successfully built a legal practice.  There are two issues with this approach.

• Far too often, this is the first leadership experience for the individual; and,
• You are either significantly limiting or robbing your partnership of a rainmaker’s efforts in an area where they have proven to excel.

Is There A Better Model?

One firm that I know of has taken a different approach. In 2012 Pepper Hamilton took the somewhat groundbreaking action of hiring a non-lawyer CEO to run the Philadelphia based law firm. Prior to holding the position at Pepper Hamilton, Scott Green, a Harvard MBA, had developed his management and leadership skills in positions with Deloitte & Touche, Goldman Sachs and Weil Gotshal before joining Wilmer Hale as their Executive Director.

Green is leaving Pepper Hamilton at the end of this year, coinciding with the expiration of his contract with the firm. I don’t have any idea how Green performed at Pepper, though reports indicate the firm successfully expanded geographically and became fiscally stronger during his stay.

The point of this discussion is not success or failure of one individual; rather, the creative approach taken by the lawyers at Pepper Hamilton to filling a position that they clearly value. Their action demonstrates an appreciation for the importance of business experience when it comes to the leadership of their firm.

One of the challenges our industry faces is the speed (or lack thereof) with which we adapt and change. It hasn’t been very many years since major firms hired and/or promoted their first minority partner…or their first female partner.

Green’s hiring is one of the first in what I believe will be a growing trend — spurred on by the market’s pressures for law firms to employ more efficient business practices.

There are countless analogies to our typical insistence on proven competencies. One of the most pointed is whether any of us would hire anyone but a well regarded and seasoned expert to perform heart surgery.

A law firm is a complex confederation of assets possessing the mobility to move on a moments notice. The industry is under enormous pressure from new and effective competitors. Clients are becoming more sophisticated consumers, and have access to the best metrics. Hence, their demands.

The law firms that survive, differentiate themselves from the pack, and thrive will be the few who buck the industry norm, and address the leadership question in a different way.

One model worth consideration revolves around a strong Board of Directors who bless future plans, sets limitations and ensures that the firm’s leadership adheres to values. Reporting to this Board of Directors is a CEO who may or may not have gone to law school, but does possess significant management training and leadership experience.

What are you thoughts?