Jerry Kowalski on the Importance of Recruiting and Building LPM Talent

\nThe increasing importance of project-management skills to legal and legal-support careers is a common theme on this blog.^[1] I was happy, therefore, to see this observation corroborated in Jerry Kowalski's new report for Managing Partner magazine, Navigating the Perfect Storm: Recruiting, Training and Retaining Lawyers.^[2] The report, which serves as a law-firm-HR guide for the \"Great Recession,\" includes project-management among the competencies law firms must acquire in the new economy. Jerry Kowalski is the principle and founder of Kowalski & Associates, a law-firm-management consultancy. Mr. Kowalski was gracious enough to share his thoughts on the lessons learned from the global recession, what this means for the practice of law, and why legal-project management is an essential skill for remaining competitive in the new legal landscape.\n

\nTell me more about your firm and consulting practice.\n

\nFollowing a quarter of a century of practicing law at some of the nation's finest law firms, I elected to move in to an area which had always captivated me and for which I felt quite well suited and reluctantly left a rather exciting and interesting law practice. My initial focus was in the area of law firm growth and expansion, both geographically and in terms of developing new practice areas and other strategic opportunities. We also focused on working with law firms in related areas, such as marketing, in house training programs, lawyer retention, compensation at both the partner and associate level and enhancing law firm profitability. We have successfully concluded scores of engagements, closed countless transactions and I am rather proud of both our accomplishments and our reputation. You can see more about me and the firm at this link. Some of our prior engagements are listed here. And of course, you can learn a great deal more about me, our firm and our work at www.kowalskiassociates.com and www.kowalskiandassociatesblog.com.

Why did you write Recruiting, Training and Retaining Lawyers? What do you want law-firm management to take away from it? 

You may be too young to recall a run of fantastic novels, by Tom Clancy (beginning with \"The Hunt for Red October\" in 1984), all of which were focused on military matters and all of which were runaway best sellers. At the time, Clancy was an insurance broker residing in Annapolis, MD, with no prior military service. While he was in his heyday as a prolific author, I once went to a talk given by Clancy and somebody in the audience asked him how he got in to writing. His response was that in the winter of 1983, his wife became pregnant with their first child and the NFL players went on strike, thus ruining both of his favorite weekend activities and so he had to find something else to fill his time with. 

I am afraid that my response is not going to be anywhere as clever. The more time I spent with the profession, while necessarily becoming a student of economics and management at every level, the more I realized that law firms were uniquely anomalous business enterprises. Firms thrived despite these anomalies as the economy expanded and demand for legal services often exceeded supply. The Great Recession changed all of the norms and law firms found themselves being drawn, often kicking and fighting every inch of the way, to make sea changes in virtually every aspect of the way in which they did business. 

The huge number of unemployed and underemployed lawyers created by The Great Recession stood in incredible contrast to (a) law firms were still offering new graduates, albeit in diminishing numbers, gravity defying \$160,000 starting salaries and (b) as the number of unemployed and underemployed lawyers soared, so too did the number of law school students, paying aggregate tuitions of \$150,000 to \$200,000. I personally feel gratified that my message did appear to get across. A number of reviews, including one in the New York State Bar Association, and those listed here demonstrated that my message appears to have been well communicated and received.\n\n

In your book, you discuss how developing project-management skills is necessary for firms to exploit the lessons learned from the global recession. How should this inform a law firm's recruiting and training programs? What can attorneys do to take advantage of this to enhance their career prospects? 

You also note that law schools do not prepare students with the practical stills, such as project management, demanded by the changed legal landscape. How do you think law schools should incorporate project-management training into their curricula?

One of the unique anomalies about law firms was that efficiency by professionals in turning out a quality work product was never rewarded. In fact, in the calculus of pain and pleasure, working lawyers who did work efficiently were penalized. Lawyers' performance was judged by law firms in great measure on how many hours they billed. Lawyers who failed to bill a predetermined quota of hours put their jobs in jeopardy. Bonus entitlement was too often predicated on reaching stratospheric numbers of hours billed. In short, the system promoted and rewarded inefficiency. 

With the huge shift in demand and supply, clients are demanding efficiency by their lawyers and will no longer brook inefficiencies. Clients are rewarding law firms who can efficiently deliver a quality product and terminating those that cannot. (Imagine, if you will, paying an airline for the time it took to get you from Point A to Point B and the more inefficient the airline, the longer amount f time the journey took). There is no law school in existence that teaches project management skills. 

[This statement will very soon be outdated. Starting this fall, Indiana University Maurer School of Law will offer a course in legal project management. Ed.^[3]] 

Some law firms, but very few thus far, are including project management training as part of basic training for new recruits as well as for seasoned lawyers. In 2008, the term \"legal project management\" was largely unknown. Today, it has its own acronym, LPM, and a Google search of the term yields an astounding 46,200,000 hits. Try it yourself. Thus, among other core skills that law schools need to teach are project management skills, and not simply textbook knowledge of project management. 

Law schools need to develop clinical programs as part of their curricula which provides hands on experience. More critically, for years, law schools graduates acquired virtually no clinical training in the application of general legal academic knowledge to the commercial world. Law firms fairly universally recognized that the first two years of a lawyer's life with the firm was dedicated to training him or her in the practical skills of being a lawyer. Beginning in late 2009, clients, in an ever rising crescendo, have simply announced that they will not pay for this training. They simply won't pay for any time billed for a first or second year associate. 

My own belief, as I write in the book, is that in fairly short order, an entirely new method for educating and training lawyers will emerge. Similarly, head spinning revolutionary changes in the recruitment process will be quite evident within the next 12 to 24 months. Economic realities will admit no other alternative. Your having read the book, Paul, has already given you a keen insight in to the future of recruiting. While my prescience may be a bit less than perfect, chapters I wrote in the spring of last year, which likely would have been viewed by many if not most as pure heresy at the time written, are now simple facts on the ground.

Will the addition of a few courses on project management, marketing, and process efficiency to a law school's curriculum really make much of a difference? Is the problem that recent law graduates don't possess the skills that clients demand or is there just decreased demand across the board?\n\n

As I said, it is not just a few academic courses at the law school level on project management that will carry the day. I, for one, wouldn't be real keen on having a brilliant young man or woman who has done exceptionally well in his or her course work in medical school remove my appendix. Project management is a skill set that requires a combination of academic knowledge and practical application. The same is true regarding lawyers, doctors, dentists and in a host of other professions. Maybe even barbers. \n\n\n

Would it not make more sense for law firms to simply hire non-lawyer project management, marketing, and other business professionals rather than expect law graduates to have these skills?\n\n

I believe that a combination is required. Non lawyer managers and marketing specialists are essential. Those specialists need to have a deep understanding of the art, science and craft of lawyering; they do not need to know how to write a contract or try a case, but they do need to fully appreciate the tasks and challenges a lawyer deals with daily. Similarly, lawyers must learn to fully appreciate the value added to the firm and to its clients by having such professionals deployed in the organization. The battle will be won those firms who successfully harness and integrate the synergistic power the two groups can create.\n\n

Is allowing U.S. law firms to go public part of the solution? Wouldn't law firms be managed more efficiently if they were publicly traded?\n\n

Public ownership addressees a different problem: Capital. Like any enterprise, firms require capital to operate. That capital was initially created by a law firm's revenue stream. Growth required additional capital. That capital was historically derived from a combination of (a) partners' capital contribution, which was delivered through a combination in deductions in profit distributions to create capital accounts or individual bank loans taken by partner, often on favorable terms from a bank with which the firm had a relationship and (b) straight bank borrowing by the firm. 

With credit being universally tight, law firms, like other businesses are finding credit more and more difficult to obtain. In addition, bank lending officers have in the past two years required fairly strict underwriting terms from law firm borrowers, and compliance with loan covenants is now minutely monitored. That monitoring and scrutiny has resulted in more efficient and conservative management. 

Economists have long debated whether, ceteris paribus, an owner operated enterprise or an investor owned enterprise operates more efficiently. The consensus is that owner operated enterprises provide greater efficiency and profitability. The basic concept is that when it's your own delicate private parts that are in the wringer, as opposed to that of some distant investor, greater efficiency, conservative management, and risk aversion and avoidance afford great comfort to those things that are near and dear to you.\n\n

I'm always looking out for my readers. Can I squeeze a discount out of you for readers of Legal Project Management?\n\n

Yes, but only because you snuck the question in at the end, after all of the time I spent responding to your well thought out questions. Call Daniel Smallwood of Ark at 309 495 3105 (309) 495-2853 [corrected on 08/31/2010] and ask Daniel for discount code JKNS1. But do warn your readers that if they give this code to somebody who is not one of your subscribers, you will cancel their subscriptions. Feel free to offer the discount to new subscribers as well.

I would like to thank Mr. Kowalski again for taking the time to share his thoughts with the readers of Legal Project Management.