This week, the Hildebrandt Institute and West LegalEdcenter are hosting the 10th Annual CFO & COO Forum in New York. We’ve previewed some of the topics for this event here, here, and here. We will be discussing the conference in greater detail in the coming weeks, but some of the highlights from Day One are worth mentioning today:
- Dan DiPietro, chairman of Citi Private Bank’s Law Firm Group, reported that firms are projecting a decrease in recruitment of first-year associates, as many firms focus instead on lateral recruitment. Yet, it’s not clear that lateral recruitment pays off – DiPietro also reports that for the AmLaw 50, laterals hired between 2005 and 2010 generated only 68% more revenue than their compensation. Steve Campbell, COO of Dykema Gossett, noted that in terms of return on investment, mergers may be more successful than lateral recruitment. Dykema has found that firms are more likely to import a book of business through a merger than via lateral recruitment.
- Speaking of first-year associates, the “first-year dilemma” was raised by a number of panelists on Day One. Several panelists remarked that they are receiving directives from clients to avoid staffing matters with young associates, a trend reported earlier this week in the Wall Street Journal and discussed here on the blog. Interestingly, Larry Kleinberg, CFO for Munger Tolles & Olson, observed that even judges are looking for clerks with at least a year of experience. Which raises the question: if law firms are curbing recruitment of first-year associates, clients do not want first-years to gain experience by working on their matters, and judges are looking for clerks with some real-world experience, just who is going to step in and help train new lawyers? Large firms like Latham & Watkins and SNR Denton are still hiring and training recent law school graduates, but even at these firms, first-year classes are significantly smaller than they once were.
- On Thursday, Harvard Business School Professor Emeritus Jack Gabarro led a case study on the skills required for change management. It’s an important issue for law firm COOs and CFOs making strategic shifts in response to the changing economy. One difficulty facing firms is the challenge of obtaining “buy-in” from partners, an essential component for making meaningful changes. This morning, the Chief Strategic Innovations Office for Seyfarth Shaw, Carla Goldstein, demonstrated how it can be done. Goldstein faced resistance from partners in implementing a process management infrastructure to improve firm efficiency and become more price competitive. The firm’s M&A group didn’t believe process management would work with them: “Every deal is different.” But Goldstein and her team pushed through these objections, and asked the group to simply walk them through a deal. At the end of four hours, with 180 Post-its on the wall describing every task, the M&A lawyers understood the value of the process. With that buy-in, Goldstein was able to change the way Seyfarth does business for the better.
Posted by Emily Fisher