The legal services industry is awash with profitability challenges, calls for innovation, and non-traditional entrants.  Long-time law firm clients are expecting more from their law firms at the same time they weigh the option of moving work in-house or assigning it to alternative providers.  Since 2008 flat demand and financial stress have fueled reactive solutions like cost-cutting, consolidation through mergers and growth through lateral hiring.  As these solutions have been pursued, competing alternative providers have raised capital to finance the innovative delivery of legal related services that supplant some of the services traditionally provided by law firms.

While this change confronts law firms, many find their leadership “aging out.” That leadership matured in a decades long seller’s market.  Their leadership style suited their “up market” competitive world.  In today’s evolving legal services market, those tried and true methods won’t likely work as well.  In no uncertain terms law firms must change, in some cases dramatically, if they want to be present tomorrow.  Because change and innovation will be needed, a firm’s next leader must be different than many of those that lead before.

In finding the next law firm leader, what should firms look for? What skills will be important?  Here are five:

Flexible Outlook.  Managing today and tomorrow’s law firm with yesterday’s playbook is unwise.  The changing legal services environment requires a willingness to take sound principles from the past and applying them to new approaches relevant to the future.  Innovative leadership will blend sound fundamentals with forward thinking solutions designed to achieve client satisfaction and institutional strength. But because the dynamic change facing law firms will continue for some time, an individual that is flexible to deal with an evolving industry will be needed.

 Client Centric.  Without satisfied clients, there is little for a law firm to do.  Finding a future leader that is focused on client satisfaction and the delivery of exceptional client service is essential.  But a truly client centric leader will go beyond meeting present demands and will anticipate client needs.  By anticipating a client’s expectations, a law firm can innovatively propose solutions that serve both the client and law firm well.  A leader focused in this client centric way will be critical.

 Profit Orientation.  As much as a law firm may view the practice of law as a calling, it must be profitable or it will not endure.  As the practice of law has evolved, being profitable means more than maximizing hours’ times rates.  A new leader that understands the importance of profit will create measurable performance metrics that guide the firm forward as it pursues new business and profits.  These data points will not only reward attorneys for profitable business landed but also will motivate them to think about client business opportunities in a profit centered way.

 Strategic About Pricing.  While the hourly rate has not gone by the wayside, law firms successful in the future will rely less on its use and move to more flexible and sophisticated pricing models.  Turning to legal process management can help with pricing legal services to clients.  Alternatively, repeatable tasks can be identified and priced more consistently and profitably.  A leader that is to lead the firm must think creatively about providing and pricing the firm’s legal services.  New pricing approaches that work will go hand in hand with achieving firm profitability and client satisfaction.

 Relentless About Efficiency.  Client satisfaction, strong profitability and attractive pricing will all be influenced by greater efficiency in the firm’s administrative functions, eliminating unnecessary services and replicating past work experiences.  Efficiency can come from converting firm services into repeatable tasks clients really want.  It can also come from eliminating wasteful back-office functions by taking a business process orientation or by outsourcing.  In whatever way that efficiency is achieved, it can only come from a leader that is not easily satisfied but that strives to do things better.

It is more important than ever that the next law firm leaders be prepared for an ever-changing legal services market.  Unlike past practices, finding the clone of the last managing partner is not a good solution.  If your firm is in the market for new leadership, will that leader have the skills needed in the years ahead?