Should Business Managers Run Law Firms?

To what degree should business executives oversee operations at law firms as opposed to lawyers who do what they do best — practice the law?

At the law firm Katten Muchin Rosenman of Chicago, that question was addressed on Oct. 9 when it told Big Law Business it has no plans to scale back managerial oversight of its 600-lawyer firm with $550 million in revenue.

Instead, it is bringing on board Baker McKenzie’s longtime chief operating officer, Craig Courter, who will take the reins of the firm’s business operations, effective Oct. 16.

“The COO, in my way of viewing the world, is making sure the business runs like a business,” Courter said in an interview.

“You have to make sure the systems and processes and support teams are all organized in order to give the clients the best service possible.”

Courter marks one of a growing number of business executives at large law firms who do not practice law — some do not hold law degrees — but are charged with the delicate task of telling lawyers how to manage their work. This can range from deciding how lawyers log their hours to analyzing whether a client matter is profitable enough for the firm to take on.

Courter depicted his role as a non-confrontational support service to lawyers. Others have said their efforts can be met with skepticism.

John Yoshimura is chief operating officer at McDermott Will & Emery.

This year, he has been executing a project of assigning a four-person business development team to a sample group of roughly 20 McDermott partners. The partners work with staff to identify new clients to solicit and touch base with old ones they haven’t spoken to in a while.

Yoshimura said partners have been “skeptical” of business development staff handling their client relations, so the project has started only in a test phase.

He made the case that doing outreach through business development staff — who are paid somewhere between associates and junior partners — is more cost effective than having partners do it.

“We pay the attorneys to practice law, not to develop business,” said Yoshimura.

Such business management jobs have emerged as law firms have amassed thousands of lawyers worldwide in an increasingly global economy, technology like artificial intelligence starts to affect the law practice, and competition increases as clients cut back on legal spend.

McDermott, with more than 950 lawyers, and Katten, with 600, are smaller than others on the list of the world’s largest law firms. Courter comes from Baker McKenzie, which staffed more than 4,600 lawyers. The largest by revenue in 2017 was Latham & Watkins, which took in more than $2.8 billion, according to The American Lawyer.

As large law firms have gotten larger, the demand for business administrators has only grown, said Victor Núñez, the chief operating officer of the Americas at White & Case.

Núñez joined White & Case as a financial analyst from his role as a business development chief at American Express in 2003.

“I really didn’t know much about law firms and how they operate,” said Núñez. “It was interesting to me.”

Núñez holds a master of international finance and business from Columbia University and took an executive program at Stanford business school. But he never went to law school. Some of his duties have entailed assessing the profitability of client matters, as well as forming strategy around and executing new office openings.

One significant project he worked on was the relocation of White & Case’s New York office, from its longtime headquarters at 1155 Avenue of Americas, to 1221 6th Avenue — a transition that saw office space reduce from 28 floors to nine, with more open space and more room for its lawyers to interact.

The office staffs just under 400 lawyers in New York, he said.

It is generally known that such moves can ruffle feathers of some veteran partners used to working in private offices. But Núñez didn’t speak to those issues.

His path from the business world is different than others, such as Courter’s, the lawyer who joined Katten as chief operating officer. But even Courter hasn’t practiced law since the 1990s.

Courter was a law clerk and then an associate at the San Diego law firm Seltzer Caplan McMahon Vitek before becoming the firm’s chief information officer. In that position, he oversaw design, implementation, training and maintenance of the firm’s technology.

In 2000, he moved over to Baker McKenzie, where he oversaw its technology for seven years. It was on to Perkins Coie for a six-year stint and then back to Baker in 2013.

At Katten, Courter will oversee marketing, finance, technology, talent management and human resources. He replaces Katten’s outgoing chief operating officer, Allan Wood, who is retiring.

He was tight-lipped about any major changes he has in store for Katten. But he mentioned something about his tenure at Baker. One of the projects he undertook there was implementing a financial management and accounting software, SAP, which is used by many corporations, such as Walmart.

He punted on saying whether he would do that at Katten.

“When you’re deciding on a system to go to, there are a lot of aspects to look at,” he said.

Contact the reporter responsible for this story: Casey Sullivan at csullivan@bloomberglaw.com.

Contact the editor responsible for this story: John Crawley at jcrawley@bna.com.