Law firms in Australia generally employ as many non-lawyers as practising solicitors. They represent a whole industry of generalists and specialists who provide the finance, human capital, marketing, business development, technology, knowledge, and administration expertise necessary for the firm to function successfully.

However, the ratio of lawyers to non-lawyers could tip in favour of those holding a practising certificate if Crowe Horwath partner Andrew Chen’s prediction is accurate.

“Firms will increase the number of fee earners in the coming year, whereas the number of non-fee earners is expected to remain static,” he says.

That would bring Australia in line with the UK. According to Crowe Clark Whitehill’s 2014 Financial Performance Benchmarking Study, non-fee earning staff represent 43 per cent of the total average headcount of UK law firms (down one per cent over the previous 12 months) – and just 37 per cent for firms headquartered in London.

“As the size of a law firm increases, the proportion of fee earners also increases,” reports Crowe Clark Whitehill partner Ross Prince.

“This suggests that greater efficiencies can be gained from support functions as a firm grows, in part due to the greater investment in IT, automation technologies and function outsourcing that is more common in larger firms,” he says.

“Staff leverage continues to be vital to the success and profitability of a law firm but the adoption of innovative new technologies and disruptive business models in the UK is creating new challenges for the traditional firm.”

Mr Prince adds that it is important for partners to ensure their firm is “change-ready”.

Unfortunately, in the opinion of Tim Boyne, IT systems manager at New Zealand firm Sharp Tudhope, it is an aversion to change and unwillingness to invest in infrastructure that represent the greatest challenges for technology professionals working in law firms.

“The majority of partners would probably be Baby Boomers and Gen X. They are reluctant to invest as they don’t expect to be around to benefit from any investment,” he says.

“Most partnership power bases have been around long enough to have enjoyed the golden years. They’re cashed up, and winding down. It’s not until Gen Y – the thirty-somethings that are just now getting seats at the top table – take control that real change will occur.”

Mr Boyne claims that this is despite the fact that the investment in technology required is on the decline due to lower infrastructure costs and more powerful computing capability. Currently, even the lowest-end equipment is considered adequate for most practice management systems.

Embrace the challenge

Law firms are a peculiar workplace for many non-lawyers. Even so, those working in the legal sector face a common challenge with their counterparts in other professional services industries: if you don’t charge for your time, you’re considered to be an overhead.

Lawyers may argue otherwise, but in a law firm there remains a divide between the LLB haves and have-nots.

The organisational structure of law firms is an added complication. Generally, legal practices still operate as professional partnerships.

The partners are the owners of the business and many are reluctant to relinquish control of management and decision-making.

In most other industries, a business unit head or senior manager will have clearly defined limitations on his or her level of authority and capacity to make decisions.

In a professional partnership, most decisions are consensus-driven.

These factors can deter non-legal professionals from taking a job at a law firm. Another deterrent is the legal fraternity’s preference for recruiting support staff who have prior law firm experience, which could be considered an unhealthy recycling of talent within the sector. 

While previous legal experience is advantageous – or even necessary in some cases – just as often the fixation is stifling innovation and differentiation within the profession.

The right stuff

Since joining Corrs Chambers Westgarth eight months ago as the national firm’s new director of marketing and business development, Halina Kochanowicz has achieved a major restructure of her department. In doing so, she welcomed candidates from other sectors.

What mattered most was that each individual possessed the qualities she believes are necessary to succeed in a law firm: emotional intelligence, a sense of humour, confidence and resilience.

“I’ve brought in people from financial services, listed companies, research, construction … what we have always tested for is resilience,” she says.

“If you don’t have resilience to not take things personally, or to just try again when partners are resistant, then you are going to fail. And you need a sense of humour so [that] when the internal politics get the better of you, you can still have a laugh.”

Ms Kochanowicz began her career as a lawyer and then used her MBA to make the transition into marketing. She freely admits that having a law degree was an asset early on in her career.

“In the beginning of my career it was easier for me to get time with partners [because of my law degree], but as you climb the ranks it matters less and less.

“I joined Linklaters from Allen & Overy where I had worked as a corporate and M&A lawyer. The Linklaters partners were very interested in my experience as a lawyer whereas now some of the partners at Corrs might not even be aware of my background.”

Corrs poached Ms Kochanowicz last year from King & Wood Mallesons, where she was the head of client development.

She describes the three law firms she has worked in as a marketer – Linklaters, KWM and Corrs – as very different experiences.

“At Linklaters, when you’re in marketing or business development, you have a seat at the table with the partners. At King & Wood Mallesons, when you were invited to join the conversation it was expected you would contribute. At Corrs, they go a step further as they look to you as the specialist to advise them,” she says.

The economics of law

As president of the Australasian Legal Practice Management Association (ALPMA), Andrew Barnes is mindful that firms have not completely recovered from the GFC.

Many have had to cut expenses to maintain their partnership profits. Others have been disciplined, quietly investing in business development by adding people or ensuring their networks and connections are ready for the rebound. Those firms that have only looked inward are going to be a step or two behind everyone else, he says.

“There’s quite a few we hear about that have really aggressively reduced costs across the board ... I would have thought two to three out of 10 [firms] have been focused on the future,” Mr Barnes says.

“The majority have got through the last few years with a focus on cost management.”

While the ALPMA membership is mostly comprised of small to mid-size firms (75 per cent have fewer than 100 lawyers), many larger firms have taken the same approach – cutting costs so as to protect partnership earnings.

When Clayton Utz retrenched 40 staff late last year, the firm’s finance, people and development, library services and knowledge management departments suffered the heaviest job losses.

“To survive and thrive in this environment, you have to learn how to adapt,” says Mr Barnes, who encouraged both lawyers and non-lawyers to respect each other’s roles in the business.

“I’ve adapted to how these guys work out of respect for what they do; they’re not going to respect me if we continually butt heads,” he adds.

For many business services personnel, adaptation extends to regarding the partners not as colleagues or stakeholders, but as internal clients. Demonstrating that a non-lawyer’s value ultimately comes down to communication, Ms Kochanowicz says, “I’ve seen big teams doing great stuff, but if only a few partners know about it, the ultimate reputation of the team is not great.

“It’s [about] communicating but also finding your champions – it’s important to find sponsors who will push that message out when you’re not around so your message is amplified.”