Benefits of CXO Structures
Theatre Session : Benefits of CXO Structures
There is clearly an over-supply of conferences and other events, at least in major cities. The formats typically leave very little time for discussion and constructive exchange of thoughts. Against this backdrop, it was refreshing to conduct a ‘Theatre Session’ on Benefits of CXO Structures for Law Firms. This was held as part of ‘Lawserv’ held in Mumbai in January 2018 and organized by Idex Legal.
Law Firms : The Backdrop
It is important to understand the industry background to appreciate why a session on Benefits of CXO structures should really be required.
Professional Services firms in general, and law firms in particular, have a very different DNA. Firstly, they have not yet passed a verdict on whether they are a noble profession or a business. Secondly, the nature of the profession makes the professionals very individualistic and dents their capacity for team-work. The organizational implications of the above two factors are obvious.
Finally, to make matters worse, the ownership structures are highly regulated. This leads to a partnership format and corporate structures are not allowed. Moreover, partnership firms can only have members of the profession as partners and other professionals are typically not allowed to enter into partnership with the professionals.
The Global Context
This situation is not unique to India, but pretty much consistent globally. However, there are a few exceptions.
The UK has changed its regulations earlier this decade to allow for Alternate Business Structures (ABS) and incorporation of law firms where ownership is less regulated and the structure bears slightly more resemblance to a corporate structure.
Australia was witness to the listing of a law firm on the stock exchanges, with Slater and Gordon being listed in 2007. However, this did not exactly lead to a gold-rush for law firms wanting to go public.
Our Situation
The situation in India continues to follow the traditional path. I would probably be the longest serving outsider management professional working as CEO in the Indian legal context. When I joined Anand and Anand as CEO in 2011, it raised eyebrows whenever I introduced myself, both in the legal fraternity as well as the management circles.
It is the need of the hour to educate the professional services sector about the need for having robust management structures. This is applicable not only to law firms but also to other professional services, such as chartered accountants, doctors, architects and other professional services and knowledge workers.
The Session
In light of the (lack of) sophistication of management structures in the fraternity, I did try to keep the discussion basic and introductory. I have captured the essence of the discussion in a separate post on Managing Professional Services.
In a nutshell, the discussion threw light upon the functional benefits across Finance, HR, Marketing & BD, Strategy, Knowledge Management, Operations, Analytics and IT and the key pillars of Governance and Infrastructure.
The results of the pulse survey that I conducted at the beginning of the session were quite revealing. Most participants agreed that there was a need to bring about change and professionalism to management structures in law firms and this was context dependent, rather than being dependent on the size of the law firm. The biggest stumbling block was the apprehension of losing control.
Moving Forward
The session did seem to stir a lot of discussions and introspection. There were several offline discussions that followed with several participating bouncing off their thoughts. The idea was to start a discussion on CXO structures in law firms. Whereas the discussions were engaging and constructive, it needed to be followed up by much more.
Postscript
Hence, I am adding a few postscripts, based on what happened in the following months:
#1 – More CXOs
There has been a couple of announcements of CXO positions in the industry in the next few months. This included AZB appointing a COO and DSK Legal appointing a CEO.
#2 – More Discussions:
A panel discussion was conducted few months later with participation of three CXOs in law firms on Professionalizing Law Firms. It was probably the first ever occasion when non-lawyers completed the entire quorum on managing law firms!
#3 – More Thoughts:
I subsequently completed 7 years as CEO of a law firm and wrote a note looking back and ahead. You can read more on Seven Things I Learnt From Lucky 7.
