BOOK REVIEW: Profitability and law firm management (2nd edition)

Firms of an average size are too small to afford full-time managers and too large to cope without them. We do cope, by dealing with complex issues when the working day is finished so that we can concentrate in peace.

Good management, financial housekeeping, marketing and supervision of fee-earners are not optional. Our professional rules make it clear that we have to be good business people as well as managers, mediators, planners and human resources experts.

The approach of Otterburn’s book is to analyse the goals, difficulties and elements pertaining to profitable management. Starting with leadership qualities, we are encouraged to develop a plan, and identify the firm’s goals and values (or, in other words, a clear strategic focus, identifiable values and a brand vision).

In terms of values, most firms aim to provide excellent service at a reasonable price and to be friendly and nice places to work in. Do any firms set out to provide poor service at exorbitant fees and be horrible places to work in? Perhaps some do.

At 140 pages, this book can be dipped into or read at length. As well as interviews with managers and leaders of well-known successful firms, I found one particularly interesting example was a firm with a niche practice and very strong values.

As lawyers, we need to understand the figures. Managers need to know what is going on, who is making how much, and what it costs. A partner may make high fees but have a large team of assistants and support staff. A consultant who is based outside the office may make modest fees but have next to no overheads. Another fee-earner may do well but may expect report fees to be paid upfront. Some employees bill well but can be difficult colleagues; some nice people are poor lawyers. Lawyers are not always profitable.

It is difficult to plan because there are so many imponderables. It is a fair point that lawyers are sometimes poor business people, staff managers and everything else. Otterburn’s book addresses when external help from a facilitator is required. The book has useful lists of qualities a leader requires and invites you to ask staff how well they think you do. It would take a brave manager to do that – but it is actually essential.  

This is a book that managing partners need to read. But it is also for fee-earners who do not manage, so they can support those who do. There is a good section on managing partners addressing the management of underperforming and unengaged owners. This is a useful book that can be read in a few hours – if you can set aside the time.

David Pickup is a partner at Pickup and Scott Solicitors, Aylesbury