August 30, 2024 • 25 mins
Join us on this episode of Steve’s Rules, where Steve Nelson, Executive Principal at McCormick Group, dives into the evolving roles within law firms, particularly focusing on the rise of professional staff in key leadership positions. We explore the recent trend of hiring COOs from non-traditional backgrounds, such as legal operations, and what this means for the future of law firm management. Whether you're a law firm leader, legal operations professional, or just interested in the business side of law, this episode offers invaluable insights into what’s next for the industry. We will also hear from Steve about what is going on in Washington DC and Texas two of the countries hottest lateral partner markets.
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Transcript
Episode Transcript
Available transcripts are automatically generated. Complete accuracy is not guaranteed.
Murray Coffey (00:00):
Murray Coffey, welcome to Steve's rules
(00:09):
periodic podcast featuring SteveNelson, executive principal at
McCormick group in the law andgovernment affairs practice. My
name is Murray Coffey, and I amthe principal of M Coffey, a law
firm, marketing and businessdevelopment Boutique. For more
information, please visit mywebsite at M coffee.net, Steve
has been an executive recruiterfor nearly three decades, and
without naming names, he isready to spill the tea on best
(00:32):
practices, and maybe a few notso best practices by firms and
candidates that he has seenduring his career, recruiting
some of the most driven andsuccessful professional into
highly profitable and growingfirms. Steve is a former lawyer
and journalist and is a fellowof the college of law practice
management and a proud son ofWilkes Barre, Pennsylvania. Full
(00:52):
transparency here, Steve hashelped my career immensely
through the years and has becomesomething of a career shaman to
me and I know many others. Hey,Steve, welcome back, Murray.
It's been a little while, busysummer, I think for both of us,
and congratulations on thenewest addition to the ever
(01:16):
growing Nelson clan. Iunderstand that you had a,
there's a there's a new, there'sa new, a new family member,
right?
Steve Nelson (01:26):
Judah cuffler, Nelson, and cuffler is my middle
name, and there's actually thoseof those of those of you, those
of you who know me well,particularly from my early days,
might know me as cuffy knows,there's a little insight that
people generally don't know, butso the cuffler name is now moved
(01:49):
on to the next generation, andhe's just a beautiful baby boy.
I got to see spend time with hissister, Misha, who's a delight.
And you know, got to spend sometime out in Northern California.
And I'll tell you, it was rightwhen the weather was in its 90s
and horrible here on the EastCoast. I'm sure it's the same
(02:11):
way down, down in Dallas aswell. And it was a delight going
waking up in the morning it was60 degrees and it never got over
80.
Murray Coffey (02:20):
There you go.
Yeah. So, great trip.
Steve Nelson (02:23):
Great to see that.
Love it. Great to see the newmember of the fan.
Murray Coffey (02:27):
Well, congratulations. And at some
point you have to share somesome photos with me. Yeah. So,
as we generally do at thebeginning of Steve's rules, we
will take a look at some of themarket intelligence that
McCormick group is producing ona regular basis. If you are
interested in getting onto themailing list for this, you can
(02:49):
find contact information forSteve and me, but for Steve in
the show notes. So please. Youknow Steve will absolutely add
you to their mailing list. I'mon the mailing list for these.
They're great. There's always alot of good intel for those of
you who are who are in thebusiness, or those of you who
are thinking about getting intothe business. But before we do
(03:10):
that, I want to just prefacethis by saying, while we
normally spend most of ourepisodes addressing issues
related to lateral partnerrecruiting, lateral attorney
recruiting. We're going to takea bit of a different tack this
week and focus in on somethingrelated to professional staff, a
(03:32):
very unique and interestingtake. So I'm not going to, I'm
not going to foreshadow it anyfurther. Steve, why don't we
talk about the Intel? And thenwe'll go right into we'll go
right into the professionalstaff. All right, so
Steve Nelson (03:47):
what we've been seeing, and it's been
interesting since at the firstthree months of the year, we
were thinking that the lateralhiring statistics were going to
be pretty flat for 2024 comparedto 2023 there weren't a lot of
moves in the first three months,both in it was true both in DC
(04:09):
and in Texas, which is the twomarket study in depth. Since
then, the market's taken off onin both markets, but much more
so in Texas, in DC, it's stillpretty flat. Numbers are little
behind last year's numbers. Um,but that's mostly due to mostly
(04:31):
due to the fact that it's anelection year and there's so
much uncertainty with regard towhat's going to happen in
governments once we get intoJanuary of 2025, that firms are
not making. They certainlyaren't making investments in
very many government, people outof government, but even in the
areas of where they would takesomebody from private practice,
(04:54):
it's not they're not quite asaggressive, because they just
don't know. What's going tohappen. So you, let's say you,
you think you want to, you know,environmental has been hot. It's
been, you know, there's a lot ofactivity in the Biden
administration, but you don'tknow what's going to happen. You
know, it's going to becompletely different if it's
Trump or if it's Harris. So, youknow, I think there's just a lot
(05:16):
of uncertainty. So therefore,less, less aggressive. Texas, on
the other hand, it's booming.
We're seeing a 30% increase inthe lateral hiring of partners
and council over the first sevenmonths of the year, and that's
and that's even take intoaccount that after three months,
it was flat. So the last fourmonths has been almost 50% in
(05:39):
terms of the numbers of hiring.
So are
Murray Coffey (05:45):
we seeing more national firms opening in Texas,
or is this what, like, what?
What do you think is going onnow?
Steve Nelson (05:51):
There's a little bit of that. I think what we're
seeing is we're seeing itfiltered down from the big
firms, you know, like a coupleof years back, it was, you know,
was all the big, you know, thenational firms, Latham, Sidley,
Gibson, Dunn, etc, those, thosekinds of firms do want a lot
aggressive right now, we'reseeing it now. It's now into the
second, you know, the secondlevel, 200 so, for example,
(06:15):
Spencer Fain, which is growingnationally, lot of hiring right
now in Texas, and you know, someother firms as well, who are
not, you know, not am law, 50firms. And so I think we're
seeing that a market is now, youknow, is, is, is stretching,
stretching out a little bit. Andagain, I think rates are
probably producing, you know,some movement. You know that not
(06:39):
everybody, you know, noteverybody can, you know, charge
their clients, you know, $1,200an hour and higher for their
services. And so their clientsare saying, No, can't do that,
right? And and then the naturalreaction is, I've got to find
myself a a place where, youknow, I could, you know, they
can handle the rates,
Murray Coffey (06:58):
yeah? So, well, that's Is it mostly transact, on
the transactional side, it's
Steve Nelson (07:04):
a mix. It's a mix, a lot of energy, energy and
corporate, you know, they kindof go together. So, yeah, they
didn't corporate lawyer. Sothat's really a big part of it.
But we're seeing a lot oflitigation too, um, you know,
not a lot of, you know, not alot of unique specialties, or
certainly some IP, um, you know,see too many, you know, unique
specialties in Texas, as you doin DC. But you know, it's a,
(07:27):
it's a pretty across the boardphenomenon.
Murray Coffey (07:30):
Okay, that's that's interesting to know and
for our listeners. Just so youknow, I'm located in in Dallas,
and I've worked in the Dallaslegal market for quite a while,
Dallas and Chicago open marketsfor quite a while. So been
watching, been watching this aswell from a different perch,
right, right.
Steve Nelson (07:46):
Yeah, and Houston and Dallas are, you know, they
take turns as being the leading,you know, leading destination.
Each month, we've seen a lot ofactivity in Austin, not nearly
as much in San Antonio. So,
Murray Coffey (08:00):
very different market, very different market,
interestingly, and then we'llmove on. When people think about
Texas, they often think aboutDallas. Think about Houston,
they think about Austin. To somedegree, they don't really think
about San Antonio that much.
However, San Antonio is thesecond largest city in Texas,
Dallas is actually the thirdlargest people and people are
(08:24):
always surprised. I always thinkthat it's Dallas, Houston and
San Antonio. The reality is it'sHouston, San Antonio and Dallas,
although
Steve Nelson (08:33):
I always base it on closer, based on how many
sports teams you have in SanAntonio only has one, whereas
you know, Dallas has, Dallas hastwo of each three or four. Yeah,
Dallas has got all four rightstar.
Murray Coffey (08:46):
And I think there's a new, a new soccer
league that just opened, yeah,right, right.
Steve Nelson (08:50):
You know, Houston, same thing. So let's,
Murray Coffey (08:53):
let's switch our attention now to, uh, to subject
this, uh, Steve. Steve has been,been watching this, this trend,
and has some real, solidthoughts on this, and, and, and,
you know, one of the strongstruggles for people who are on
the professional staff side,especially those of us who are
in the senior level side, iswhat kind of career progression
(09:14):
is there for us? Right? Andsometimes it's the career
progression is going to a largerfirm in the same role. Sometimes
it's trying to find a differentrole. Firms tend to be really
sort of vertical in in theroles, and don't kind of think
about people in different rolesfrom what they from, where
they're coming from. But thatseems to maybe be that those
(09:38):
walls seem to be breaking down,at least in in one or two areas,
and, and, and you know, Steve,you've been watching this for a
while, and you've seen a coupleof big moves recently, so maybe
you can share with folks whatwe're going to talk about now.
We're focusing entirely onprofessional staff, a particular
slice, but professional staffnonetheless, and maybe we'll
(09:59):
study. Some other professionalstaff sides at some point. But I
think this is reallyinteresting. Steve,
Steve Nelson (10:05):
right. All right.
So I think the there was a majordevelopment that occurred over
the last couple of weeks, whichis what led me to, you know,
think about doing this as a as apodcast, and that is that
Goodwin Proctor, which, ofcourse, is one of the leading
firms country, hired a womannamed Mary O'Carroll as their
new CEO. Now Goodwin Proctor,back in 2014 had hired Mike
(10:29):
Kaplan out of Mark he was a likethe law law director at Marsh
and McLennan companies beforethat, and they brought him in
directly from there to the COOsuit suite. So he's coming from
in house, but from an in housemanagement role. So he he came
(10:49):
in, and he was their CEO formany years, a very visible guy.
He left in March and went overto Lowenstein, so Goodwin then,
obviously conducted a search,and then, as have hired Mary,
Mary spent a number of years ina very similar law department
(11:10):
management role at Google, andshe was also a founding member,
very involved in clock, whichMany of you know, you know, it's
the corporate legal operations,you know, trade group, so to
speak, you know, and talk aboutthings that the corporations are
are trying to develop within thecommunity, in terms of the
(11:35):
relationships between law firmsand so forth. And you know,
their their meaning every yearis incredibly well attended. And
virtually every law firm, youknow, a major law firm, is there
because, you know, it's theplace to be you meet the
clients, etc. So, so, so she'sthe new CEO there, obviously,
with a focus. A lot of the focusis on the relationship between
(11:59):
the law firm and the end oroutside clients, and that, you
know, that gets you into thingslike pricing, pricing of
services. It gets into like, youknow, the whole all of the
outside counsel guidelines thatwe hear about in terms of how
you how could to best applybilling practices. There's a
(12:22):
tremendous amount of tumult interms of, you know how the how
to properly bill and get yourget your bills out on time and
get paid on time. And sotherefore, that whole side of
the house is really becomingmuch more important now, for the
most part, the larger law firmsare still still hiring more
(12:47):
traditionally, for the COO role,which is people usually coming
out of the CFO role. So thefinance is still the most
important thing, at leastperceived that way. But we're
seeing a number of smallerfirms, many of whom are in the
am law 200 so we're not talkingabout, you know, really small
firm. We're talking about majorfirms hiring their new CEOs who
(13:09):
have a background in law firmpractice management, you know,
running the practice variouspractice groups, pricing, legal,
project management, everythingrelating to client engagement.
And so we're seeing that that'sgoing to become more and more
important as as the years go by.
(13:33):
Again, we're not seeing it sofar in terms of developing that
many new CEOs at large firms,but many of those large firms
already have what they wouldcall a chief legal Operations
Officer, which is reports,usually reports to the COO,
(13:54):
sometimes reports to the youknow, the managing partner you
know, again, responsible for allof the client facing activities
of the firm, the way lawspractice that would include
knowledge management and AI andeverything like that, because
then it also includes thepricing, the legal project
management, the client feedbackprograms, often interacting with
(14:16):
the marketing departments andThe business development
departments. So that's the trendthat's going on. And we're just
seeing a lot of those people.
And it seems like over the lastyear or so, there's been a
number of people who've taken onpretty major roles at
substantial law firms, althoughthey are not the largest law
firms.
Murray Coffey (14:36):
Well, that's, that's, that's really
interesting. And I you know, itis a growing, we don't call it a
trend, maybe a growing awakeningat a lot of firms that the
client touch point is there's,there's often more client touch
points in in the on theprofessional staff side than
(14:57):
there is on the lawyer side. I.
And, and so that experience thatthe clients are having, you
know, at every level needs to bereally well done and really
smart and, and so, you know,this is, this is kind of
fascinating, because you really,you really, I mean, as a, as a,
as a pricing professional, youreally get a good understanding
(15:19):
of sort of what the market'stelling you about, what the
value of your services are, and,and you know that that's a,
that's a that's an insight,actually, that even most
managing partners don't reallyhave much of in a real way, in a
real dollars and cents way, and,and so I think that that,
(15:40):
that's, that's, that's unique,so what? So you're okay, so I'm
Senior pricing manager, maybe,or senior, senior km, what do I
need to be doing today? And thenwith, you know, with my eyes in
the prize of the COO or CLO orsomething like that, what do I
need to be doing right now in mycareer, to position myself over
time, to move into one of theseroles, because they're great
(16:05):
roles.
Steve Nelson (16:09):
So, you know, I say the first thing is, you
know, make sure that you've gotyour MBA. Or, you know, or an
accounting degree, doesn't doyou that much. Get your MBA
somehow, somewhat. I know if youhaven't already gotten it, you
(16:30):
can get, you know, maybe theExecutive Program at Harvard,
but you've got to bone up onthat and get those credentials
so that that you're it's clearthat you've got the finance
background, because that's goingto be crucial. I think most of
the people that we run intoalready have. So it's probably
not a major, you know, a majorthing, um, the second is, is,
(16:52):
you know, sort of understand howyour firm interacts with the
outside law departments that youdeal with. You know, if you're
not already involved with them,and many of them are, but if
you're not like, find out howthat's being done and who's
handling it. Because look at itfrom the perspective of the in
house. In house departments, thein house, unlike the law firm,
(17:17):
the general counsel willdelegate a lot of the sort of
work relating to how the handle,how, you know the engagements
are being handled, that'll getdelegated to that the department
Operating Officer, that person'sbeen much more important. You
don't see that as much in a lawfirm where the COO will be the
(17:40):
person that deals with theoutside client. That's just not
the way it works. So becausethat Operating Officer, yeah,
that operating officer wants totalk to partners, they also want
to talk to their counterpartswithin the law firms who handle
these who understand, you know,like, I've got this billing
(18:02):
guideline, and, you know, yourfirm keeps keeps violent, you
know, keeps violating it orignoring it, I've got to talk to
somebody who I can tell them whywe need it and why it's
important. And sometimes thatfor a partner in a law firm or
got busy doing nine differentthings, falls on deaf ears. So
they've got to find that person.
So you gotta understand, ifyou're not already involved in
(18:22):
it, is that person, I would say,what we're also seeing and this,
and a lot of people probablyalready know this, the lot of
law firms are now setting up.
They have a different positioncalled the chief legal
Operations Office, and thatperson is handling all of the
(18:43):
things I've talked you know,it's the, you know, client
feedback, you know, somewhatbusiness, business development,
definitely, pricing, legal,project management, km,
everything. And so there'susually somebody who's in charge
of that sort of side of thehouse, everything in terms of
(19:04):
the management of the law firm,except for facilities, HR,
internal probably partnercompensation, although sometimes
now, some of these people areinvolved in partner compensation
as well. Sure. Um, so, so thatperson has become a mini coo to
begin with. And I think we'reseeing a lot of situations come
(19:27):
up where the people are verywell respected people,
professionals in the in thissort of law firm management
space are being hired for thisCO this chief legal Operations
Officer, with a implied promisethat they will become the new
(19:50):
the next coo firm. And ofcourse, that often depends on
the chair and all that. So it'snot as easy as you know. As
just, you know, like getting apromise, because, you know, it's
not worth a whole lot. Butstill, the idea being that
you're getting set up, and webelieve that, you know, some of
(20:12):
these people who are getting setup, who are already in that
particular position, will willbe on the market, will be, you
know, the next COO at a major,at a major firm, right? Right? I
think it's going to come soon.
Within the next year, I thinkyou'll have two or three names,
though, that people are involvedin the legal value network, for
(20:33):
example, those leaders are goingto be coos at first. I think
it's coming, and it's comingsoon.
Murray Coffey (20:41):
Well, that that's, that's great. And I,
I'll, I'll sort of support onepoint you have in there, one of
the points you had in thereabout the understanding the
firm, your the relationshipbetween the firm the clients. So
many larger clients these daysrequire firms to agree to a
(21:03):
pretty significant and complexset of rules in the General
Council, general outside counselguidelines, I got it out, and I
tell you my experience sometimesthat General Counsel outside
guideline is just sitting in adrawer somewhere, gathering
dust, and nobody's paid anyattention to it until, you know,
(21:24):
the client starts to, starts tosay, hey, you know, even we gave
you a couple of months, youknow, leeway on your billing
practices, but they got tochange. Or, you know, there's
buried within those. And I usedto read those top to bottom
before I would answer an RFP,because the partners generally
wouldn't, and I would say, ifyou are, if we, if we submit an
(21:46):
RFP answer in this we areagreeing to the following. And
here's what it here's what itlooks like. And and not only are
they asking for discounts,they're asking for us to freeze
rates for a certain period oftime, they're asking for certain
kinds of value adds they'reasking for certain, you know,
there's a lot in those and and Iwould encourage anybody out
(22:07):
there who is in a position tomaybe even to raise their hand
and take over the somewhatarduous task of of tracking
compliance on Those on thoseoutside council guidelines, that
will be a massive benefit toyour firm, and you'll get many
(22:28):
kudos on that, and you're goingto learn a lot. You're going to
learn a lot. So that soundsgreat. We all, I'm sure you
know, Steve will have some otherconversations about our our
other professional staff folksover time. I know you've got a
lot of insights into the CMOworld, into the CFO world, into
(22:50):
into some of the other C suiteworlds. So you know, we'll tap
into that over time. And isthere anything else you want to
cover before we before we wrap,
Steve Nelson (23:02):
not really. I just think it's just a matter of you
know that we think this is agrowing a growing area, and that
we're going to see leadershipstart to shift towards people
who understand how the law ispracticed and how the clients
interact with the firm. I thinkwe're going to see that that
(23:24):
doesn't, I mean, it's not goingto be true in every case. I
mean, right? See, CFOs are, youknow, they're, they're very
experienced people, and they,you know, they've done a good
job running CEO firm. So it'snot, it's every firm's going to
have a different view of it, butI think that we're going to see
this become an option for firms,you know, in terms of how they
(23:44):
how they're managed? Well,
Murray Coffey (23:46):
let me write a couple of checks for you then.
So those law firm departmentleaders who are kind of thinking
of what's next and sort ofwhat's next for their firms, you
may want to give Steve a calljust to just to get further
insights into what he's seeingand what's happening in the
marketplace, and maybe even, youknow, talk about the
qualifications of of who youwould need to hire in this kind
(24:09):
of a role, and also those peoplewho are, who are possibly in the
in the pipeline, who might beinterested in going in, into
this direction. I know Stevewell, and you give him a call,
he's going to call you back, oneof the few recruiters who will
so encourage you to do that.
It's a, it's a one of the thingsthat Steve and mccork group
(24:29):
really do well is is monitor themarket to see what's what's
around the corner. They're greatat understanding what the market
is today, and more importantly,they've got a good insight into
what's coming around the corner.
I think this conversation isgreat example of that. One
Steve Nelson (24:46):
of the things that this goes back a few years, but
I wrote an article, you know,three or four years ago about
this phenomenon where where it'scoming and so anybody who would
like to get a copy of. Article,drop me a line, send me out to
you,
Murray Coffey (25:03):
yeah, yeah. And if possible, we'll, we'll put it
into the show notes as well. Sowe'll talk about that offline,
Steve. So with that, we'll closeanother successful episode of of
Steve's rules and and happy,happy beginnings of the fall
across the country, we are weare excited to see the weather
(25:25):
cool off a little bit, at leasthere in Texas, right,
absolutely. All right, Steve,we'll talk soon. All right. Have
a good labor day. You too. Bye.
Bye.
Murray Coffey, welcome to Steve's rules
(00:09):
periodic podcast featuring SteveNelson, executive principal at
McCormick group in the law andgovernment affairs practice. My
name is Murray Coffey, and I amthe principal of M Coffey, a law
firm, marketing and businessdevelopment Boutique. For more
information, please visit mywebsite at M coffee.net, Steve
has been an executive recruiterfor nearly three decades, and
without naming names, he isready to spill the tea on best
(00:32):
practices, and maybe a few notso best practices by firms and
candidates that he has seenduring his career, recruiting
some of the most driven andsuccessful professional into
highly profitable and growingfirms. Steve is a former lawyer
and journalist and is a fellowof the college of law practice
management and a proud son ofWilkes Barre, Pennsylvania. Full
(00:52):
transparency here, Steve hashelped my career immensely
through the years and has becomesomething of a career shaman to
me and I know many others. Hey,Steve, welcome back, Murray.
It's been a little while, busysummer, I think for both of us,
and congratulations on thenewest addition to the ever
(01:16):
growing Nelson clan. Iunderstand that you had a,
there's a there's a new, there'sa new, a new family member,
right?
Steve Nelson (01:26):
Judah cuffler, Nelson, and cuffler is my middle
name, and there's actually thoseof those of those of you, those
of you who know me well,particularly from my early days,
might know me as cuffy knows,there's a little insight that
people generally don't know, butso the cuffler name is now moved
(01:49):
on to the next generation, andhe's just a beautiful baby boy.
I got to see spend time with hissister, Misha, who's a delight.
And you know, got to spend sometime out in Northern California.
And I'll tell you, it was rightwhen the weather was in its 90s
and horrible here on the EastCoast. I'm sure it's the same
(02:11):
way down, down in Dallas aswell. And it was a delight going
waking up in the morning it was60 degrees and it never got over
80.
Murray Coffey (02:20):
There you go.
Yeah. So, great trip.
Steve Nelson (02:23):
Great to see that.
Love it. Great to see the newmember of the fan.
Murray Coffey (02:27):
Well, congratulations. And at some
point you have to share somesome photos with me. Yeah. So,
as we generally do at thebeginning of Steve's rules, we
will take a look at some of themarket intelligence that
McCormick group is producing ona regular basis. If you are
interested in getting onto themailing list for this, you can
(02:49):
find contact information forSteve and me, but for Steve in
the show notes. So please. Youknow Steve will absolutely add
you to their mailing list. I'mon the mailing list for these.
They're great. There's always alot of good intel for those of
you who are who are in thebusiness, or those of you who
are thinking about getting intothe business. But before we do
(03:10):
that, I want to just prefacethis by saying, while we
normally spend most of ourepisodes addressing issues
related to lateral partnerrecruiting, lateral attorney
recruiting. We're going to takea bit of a different tack this
week and focus in on somethingrelated to professional staff, a
(03:32):
very unique and interestingtake. So I'm not going to, I'm
not going to foreshadow it anyfurther. Steve, why don't we
talk about the Intel? And thenwe'll go right into we'll go
right into the professionalstaff. All right, so
Steve Nelson (03:47):
what we've been seeing, and it's been
interesting since at the firstthree months of the year, we
were thinking that the lateralhiring statistics were going to
be pretty flat for 2024 comparedto 2023 there weren't a lot of
moves in the first three months,both in it was true both in DC
(04:09):
and in Texas, which is the twomarket study in depth. Since
then, the market's taken off onin both markets, but much more
so in Texas, in DC, it's stillpretty flat. Numbers are little
behind last year's numbers. Um,but that's mostly due to mostly
(04:31):
due to the fact that it's anelection year and there's so
much uncertainty with regard towhat's going to happen in
governments once we get intoJanuary of 2025, that firms are
not making. They certainlyaren't making investments in
very many government, people outof government, but even in the
areas of where they would takesomebody from private practice,
(04:54):
it's not they're not quite asaggressive, because they just
don't know. What's going tohappen. So you, let's say you,
you think you want to, you know,environmental has been hot. It's
been, you know, there's a lot ofactivity in the Biden
administration, but you don'tknow what's going to happen. You
know, it's going to becompletely different if it's
Trump or if it's Harris. So, youknow, I think there's just a lot
(05:16):
of uncertainty. So therefore,less, less aggressive. Texas, on
the other hand, it's booming.
We're seeing a 30% increase inthe lateral hiring of partners
and council over the first sevenmonths of the year, and that's
and that's even take intoaccount that after three months,
it was flat. So the last fourmonths has been almost 50% in
(05:39):
terms of the numbers of hiring.
So are
Murray Coffey (05:45):
we seeing more national firms opening in Texas,
or is this what, like, what?
What do you think is going onnow?
Steve Nelson (05:51):
There's a little bit of that. I think what we're
seeing is we're seeing itfiltered down from the big
firms, you know, like a coupleof years back, it was, you know,
was all the big, you know, thenational firms, Latham, Sidley,
Gibson, Dunn, etc, those, thosekinds of firms do want a lot
aggressive right now, we'reseeing it now. It's now into the
second, you know, the secondlevel, 200 so, for example,
(06:15):
Spencer Fain, which is growingnationally, lot of hiring right
now in Texas, and you know, someother firms as well, who are
not, you know, not am law, 50firms. And so I think we're
seeing that a market is now, youknow, is, is, is stretching,
stretching out a little bit. Andagain, I think rates are
probably producing, you know,some movement. You know that not
(06:39):
everybody, you know, noteverybody can, you know, charge
their clients, you know, $1,200an hour and higher for their
services. And so their clientsare saying, No, can't do that,
right? And and then the naturalreaction is, I've got to find
myself a a place where, youknow, I could, you know, they
can handle the rates,
Murray Coffey (06:58):
yeah? So, well, that's Is it mostly transact, on
the transactional side, it's
Steve Nelson (07:04):
a mix. It's a mix, a lot of energy, energy and
corporate, you know, they kindof go together. So, yeah, they
didn't corporate lawyer. Sothat's really a big part of it.
But we're seeing a lot oflitigation too, um, you know,
not a lot of, you know, not alot of unique specialties, or
certainly some IP, um, you know,see too many, you know, unique
specialties in Texas, as you doin DC. But you know, it's a,
(07:27):
it's a pretty across the boardphenomenon.
Murray Coffey (07:30):
Okay, that's that's interesting to know and
for our listeners. Just so youknow, I'm located in in Dallas,
and I've worked in the Dallaslegal market for quite a while,
Dallas and Chicago open marketsfor quite a while. So been
watching, been watching this aswell from a different perch,
right, right.
Steve Nelson (07:46):
Yeah, and Houston and Dallas are, you know, they
take turns as being the leading,you know, leading destination.
Each month, we've seen a lot ofactivity in Austin, not nearly
as much in San Antonio. So,
Murray Coffey (08:00):
very different market, very different market,
interestingly, and then we'llmove on. When people think about
Texas, they often think aboutDallas. Think about Houston,
they think about Austin. To somedegree, they don't really think
about San Antonio that much.
However, San Antonio is thesecond largest city in Texas,
Dallas is actually the thirdlargest people and people are
(08:24):
always surprised. I always thinkthat it's Dallas, Houston and
San Antonio. The reality is it'sHouston, San Antonio and Dallas,
although
Steve Nelson (08:33):
I always base it on closer, based on how many
sports teams you have in SanAntonio only has one, whereas
you know, Dallas has, Dallas hastwo of each three or four. Yeah,
Dallas has got all four rightstar.
Murray Coffey (08:46):
And I think there's a new, a new soccer
league that just opened, yeah,right, right.
Steve Nelson (08:50):
You know, Houston, same thing. So let's,
Murray Coffey (08:53):
let's switch our attention now to, uh, to subject
this, uh, Steve. Steve has been,been watching this, this trend,
and has some real, solidthoughts on this, and, and, and,
you know, one of the strongstruggles for people who are on
the professional staff side,especially those of us who are
in the senior level side, iswhat kind of career progression
(09:14):
is there for us? Right? Andsometimes it's the career
progression is going to a largerfirm in the same role. Sometimes
it's trying to find a differentrole. Firms tend to be really
sort of vertical in in theroles, and don't kind of think
about people in different rolesfrom what they from, where
they're coming from. But thatseems to maybe be that those
(09:38):
walls seem to be breaking down,at least in in one or two areas,
and, and, and you know, Steve,you've been watching this for a
while, and you've seen a coupleof big moves recently, so maybe
you can share with folks whatwe're going to talk about now.
We're focusing entirely onprofessional staff, a particular
slice, but professional staffnonetheless, and maybe we'll
(09:59):
study. Some other professionalstaff sides at some point. But I
think this is reallyinteresting. Steve,
Steve Nelson (10:05):
right. All right.
So I think the there was a majordevelopment that occurred over
the last couple of weeks, whichis what led me to, you know,
think about doing this as a as apodcast, and that is that
Goodwin Proctor, which, ofcourse, is one of the leading
firms country, hired a womannamed Mary O'Carroll as their
new CEO. Now Goodwin Proctor,back in 2014 had hired Mike
(10:29):
Kaplan out of Mark he was a likethe law law director at Marsh
and McLennan companies beforethat, and they brought him in
directly from there to the COOsuit suite. So he's coming from
in house, but from an in housemanagement role. So he he came
(10:49):
in, and he was their CEO formany years, a very visible guy.
He left in March and went overto Lowenstein, so Goodwin then,
obviously conducted a search,and then, as have hired Mary,
Mary spent a number of years ina very similar law department
(11:10):
management role at Google, andshe was also a founding member,
very involved in clock, whichMany of you know, you know, it's
the corporate legal operations,you know, trade group, so to
speak, you know, and talk aboutthings that the corporations are
are trying to develop within thecommunity, in terms of the
(11:35):
relationships between law firmsand so forth. And you know,
their their meaning every yearis incredibly well attended. And
virtually every law firm, youknow, a major law firm, is there
because, you know, it's theplace to be you meet the
clients, etc. So, so, so she'sthe new CEO there, obviously,
with a focus. A lot of the focusis on the relationship between
(11:59):
the law firm and the end oroutside clients, and that, you
know, that gets you into thingslike pricing, pricing of
services. It gets into like, youknow, the whole all of the
outside counsel guidelines thatwe hear about in terms of how
you how could to best applybilling practices. There's a
(12:22):
tremendous amount of tumult interms of, you know how the how
to properly bill and get yourget your bills out on time and
get paid on time. And sotherefore, that whole side of
the house is really becomingmuch more important now, for the
most part, the larger law firmsare still still hiring more
(12:47):
traditionally, for the COO role,which is people usually coming
out of the CFO role. So thefinance is still the most
important thing, at leastperceived that way. But we're
seeing a number of smallerfirms, many of whom are in the
am law 200 so we're not talkingabout, you know, really small
firm. We're talking about majorfirms hiring their new CEOs who
(13:09):
have a background in law firmpractice management, you know,
running the practice variouspractice groups, pricing, legal,
project management, everythingrelating to client engagement.
And so we're seeing that that'sgoing to become more and more
important as as the years go by.
(13:33):
Again, we're not seeing it sofar in terms of developing that
many new CEOs at large firms,but many of those large firms
already have what they wouldcall a chief legal Operations
Officer, which is reports,usually reports to the COO,
(13:54):
sometimes reports to the youknow, the managing partner you
know, again, responsible for allof the client facing activities
of the firm, the way lawspractice that would include
knowledge management and AI andeverything like that, because
then it also includes thepricing, the legal project
management, the client feedbackprograms, often interacting with
(14:16):
the marketing departments andThe business development
departments. So that's the trendthat's going on. And we're just
seeing a lot of those people.
And it seems like over the lastyear or so, there's been a
number of people who've taken onpretty major roles at
substantial law firms, althoughthey are not the largest law
firms.
Murray Coffey (14:36):
Well, that's, that's, that's really
interesting. And I you know, itis a growing, we don't call it a
trend, maybe a growing awakeningat a lot of firms that the
client touch point is there's,there's often more client touch
points in in the on theprofessional staff side than
(14:57):
there is on the lawyer side. I.
And, and so that experience thatthe clients are having, you
know, at every level needs to bereally well done and really
smart and, and so, you know,this is, this is kind of
fascinating, because you really,you really, I mean, as a, as a,
as a pricing professional, youreally get a good understanding
(15:19):
of sort of what the market'stelling you about, what the
value of your services are, and,and you know that that's a,
that's a that's an insight,actually, that even most
managing partners don't reallyhave much of in a real way, in a
real dollars and cents way, and,and so I think that that,
(15:40):
that's, that's, that's unique,so what? So you're okay, so I'm
Senior pricing manager, maybe,or senior, senior km, what do I
need to be doing today? And thenwith, you know, with my eyes in
the prize of the COO or CLO orsomething like that, what do I
need to be doing right now in mycareer, to position myself over
time, to move into one of theseroles, because they're great
(16:05):
roles.
Steve Nelson (16:09):
So, you know, I say the first thing is, you
know, make sure that you've gotyour MBA. Or, you know, or an
accounting degree, doesn't doyou that much. Get your MBA
somehow, somewhat. I know if youhaven't already gotten it, you
(16:30):
can get, you know, maybe theExecutive Program at Harvard,
but you've got to bone up onthat and get those credentials
so that that you're it's clearthat you've got the finance
background, because that's goingto be crucial. I think most of
the people that we run intoalready have. So it's probably
not a major, you know, a majorthing, um, the second is, is,
(16:52):
you know, sort of understand howyour firm interacts with the
outside law departments that youdeal with. You know, if you're
not already involved with them,and many of them are, but if
you're not like, find out howthat's being done and who's
handling it. Because look at itfrom the perspective of the in
house. In house departments, thein house, unlike the law firm,
(17:17):
the general counsel willdelegate a lot of the sort of
work relating to how the handle,how, you know the engagements
are being handled, that'll getdelegated to that the department
Operating Officer, that person'sbeen much more important. You
don't see that as much in a lawfirm where the COO will be the
(17:40):
person that deals with theoutside client. That's just not
the way it works. So becausethat Operating Officer, yeah,
that operating officer wants totalk to partners, they also want
to talk to their counterpartswithin the law firms who handle
these who understand, you know,like, I've got this billing
(18:02):
guideline, and, you know, yourfirm keeps keeps violent, you
know, keeps violating it orignoring it, I've got to talk to
somebody who I can tell them whywe need it and why it's
important. And sometimes thatfor a partner in a law firm or
got busy doing nine differentthings, falls on deaf ears. So
they've got to find that person.
So you gotta understand, ifyou're not already involved in
(18:22):
it, is that person, I would say,what we're also seeing and this,
and a lot of people probablyalready know this, the lot of
law firms are now setting up.
They have a different positioncalled the chief legal
Operations Office, and thatperson is handling all of the
(18:43):
things I've talked you know,it's the, you know, client
feedback, you know, somewhatbusiness, business development,
definitely, pricing, legal,project management, km,
everything. And so there'susually somebody who's in charge
of that sort of side of thehouse, everything in terms of
(19:04):
the management of the law firm,except for facilities, HR,
internal probably partnercompensation, although sometimes
now, some of these people areinvolved in partner compensation
as well. Sure. Um, so, so thatperson has become a mini coo to
begin with. And I think we'reseeing a lot of situations come
(19:27):
up where the people are verywell respected people,
professionals in the in thissort of law firm management
space are being hired for thisCO this chief legal Operations
Officer, with a implied promisethat they will become the new
(19:50):
the next coo firm. And ofcourse, that often depends on
the chair and all that. So it'snot as easy as you know. As
just, you know, like getting apromise, because, you know, it's
not worth a whole lot. Butstill, the idea being that
you're getting set up, and webelieve that, you know, some of
(20:12):
these people who are getting setup, who are already in that
particular position, will willbe on the market, will be, you
know, the next COO at a major,at a major firm, right? Right? I
think it's going to come soon.
Within the next year, I thinkyou'll have two or three names,
though, that people are involvedin the legal value network, for
(20:33):
example, those leaders are goingto be coos at first. I think
it's coming, and it's comingsoon.
Murray Coffey (20:41):
Well, that that's, that's great. And I,
I'll, I'll sort of support onepoint you have in there, one of
the points you had in thereabout the understanding the
firm, your the relationshipbetween the firm the clients. So
many larger clients these daysrequire firms to agree to a
(21:03):
pretty significant and complexset of rules in the General
Council, general outside counselguidelines, I got it out, and I
tell you my experience sometimesthat General Counsel outside
guideline is just sitting in adrawer somewhere, gathering
dust, and nobody's paid anyattention to it until, you know,
(21:24):
the client starts to, starts tosay, hey, you know, even we gave
you a couple of months, youknow, leeway on your billing
practices, but they got tochange. Or, you know, there's
buried within those. And I usedto read those top to bottom
before I would answer an RFP,because the partners generally
wouldn't, and I would say, ifyou are, if we, if we submit an
(21:46):
RFP answer in this we areagreeing to the following. And
here's what it here's what itlooks like. And and not only are
they asking for discounts,they're asking for us to freeze
rates for a certain period oftime, they're asking for certain
kinds of value adds they'reasking for certain, you know,
there's a lot in those and and Iwould encourage anybody out
(22:07):
there who is in a position tomaybe even to raise their hand
and take over the somewhatarduous task of of tracking
compliance on Those on thoseoutside council guidelines, that
will be a massive benefit toyour firm, and you'll get many
(22:28):
kudos on that, and you're goingto learn a lot. You're going to
learn a lot. So that soundsgreat. We all, I'm sure you
know, Steve will have some otherconversations about our our
other professional staff folksover time. I know you've got a
lot of insights into the CMOworld, into the CFO world, into
(22:50):
into some of the other C suiteworlds. So you know, we'll tap
into that over time. And isthere anything else you want to
cover before we before we wrap,
Steve Nelson (23:02):
not really. I just think it's just a matter of you
know that we think this is agrowing a growing area, and that
we're going to see leadershipstart to shift towards people
who understand how the law ispracticed and how the clients
interact with the firm. I thinkwe're going to see that that
(23:24):
doesn't, I mean, it's not goingto be true in every case. I
mean, right? See, CFOs are, youknow, they're, they're very
experienced people, and they,you know, they've done a good
job running CEO firm. So it'snot, it's every firm's going to
have a different view of it, butI think that we're going to see
this become an option for firms,you know, in terms of how they
(23:44):
how they're managed? Well,
Murray Coffey (23:46):
let me write a couple of checks for you then.
So those law firm departmentleaders who are kind of thinking
of what's next and sort ofwhat's next for their firms, you
may want to give Steve a calljust to just to get further
insights into what he's seeingand what's happening in the
marketplace, and maybe even, youknow, talk about the
qualifications of of who youwould need to hire in this kind
(24:09):
of a role, and also those peoplewho are, who are possibly in the
in the pipeline, who might beinterested in going in, into
this direction. I know Stevewell, and you give him a call,
he's going to call you back, oneof the few recruiters who will
so encourage you to do that.
It's a, it's a one of the thingsthat Steve and mccork group
(24:29):
really do well is is monitor themarket to see what's what's
around the corner. They're greatat understanding what the market
is today, and more importantly,they've got a good insight into
what's coming around the corner.
I think this conversation isgreat example of that. One
Steve Nelson (24:46):
of the things that this goes back a few years, but
I wrote an article, you know,three or four years ago about
this phenomenon where where it'scoming and so anybody who would
like to get a copy of. Article,drop me a line, send me out to
you,
Murray Coffey (25:03):
yeah, yeah. And if possible, we'll, we'll put it
into the show notes as well. Sowe'll talk about that offline,
Steve. So with that, we'll closeanother successful episode of of
Steve's rules and and happy,happy beginnings of the fall
across the country, we are weare excited to see the weather
(25:25):
cool off a little bit, at leasthere in Texas, right,
absolutely. All right, Steve,we'll talk soon. All right. Have
a good labor day. You too. Bye.
Bye.
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