Who should be responsible for developing management skills in lawyers?

The provision of legal education and training is under the spotlight more than ever before in the UK. The Legal Education Training Review (LETR) was finally published last summer after a series of delays and there is much discussion about what should or should not be mandatory in the education and training of lawyers.

The regulators, particularly the Solicitors Regulation Authority (SRA), are already taking steps that are largely focused on deregulation of aspects of the legal profession. There is increased competition, particularly from alternative businesses structures and owners of firms with different backgrounds, skills sets and experiences of running a business. Budgets are tight and clients are looking for more value for money.

A successful business needs good leadership and management. This includes skills such as strategic planning and development, corporate governance and financial acumen – particularly the ability to plan and manage budgets, cashflows and margins on new matters. These skills are only part of the compulsory element of legal education and training in Management Course Stage 1 and 2 – but these skills cannot possibly be taught in one or two days.

So, why should the way training and education is provided on law firm management change now?

Pressure on law firms

Historically, there was an established route to become part of the management and leadership structure of a law firm. Those skills were not required at the entry point as a trainee or newly-qualified solicitor. It was required later in a career, following progression through the classic pyramid structure.

Quite often, significant leadership or management roles were just divided up between the senior lawyers. For example, all HR responsibility was given to one senior employment lawyer “because it was her area”. She then acquired the necessary internal business skills through on-the-job experience and mentoring rather than any formal training mechanism.

Recent events illustrate the need for effective leadership and management of a law firm. Since the onset of the financial crisis, there has been a significant reduction in the number of law firms in the UK, including the collapse of established firms like Halliwells and Cobbetts.

At the end of 2013, a large number of law firms were unable to find professional indemnity insurance to continue practising. There has been recent speculation that banks are taking an increasingly hard stance on professional loans and working overdrafts.

All of these issues illustrate both the pressure and business skills required to manage these issues. Managing and leading the business cannot be juggled with ongoing responsibilities to clients and fee-earning targets.

Mandatory vs. optional

So, should training and development of leadership and management skills in lawyers be mandatory? The skills required to lead and manage a business are different from those needed to be a successful and effective fee-earner. Law firms have a responsibility to ensure that all employees receive appropriate training for the roles that they undertake and that their businesses are run in accordance with proper governance and sound financial and risk management principles.

Recommendation 9 of LETR is that learning outcomes should be developed for post-qualification, with continuing learning in the specific areas of professional conduct, governance and management. The SRA is currently consulting on the requirements, regulations, processes and contents of continuing professional development (CPD). Under outcomes-focused regulation, it is up to firms to decide how they can demonstrate compliance, rather than the regulator’s function to decide what is best.

But where should these skills be taught? Are we at a point where they should be provided in the existing education and training framework? There are an increasing number of courses and types of training available. Although it is now possible for an entrepreneurial trainee or newly qualified solicitor to be the owner or leader of a business, for most, requiring management training to be undertaken at the undergraduate or immediate postgraduate stage would mean redundant education. Indeed, skills to manage and lead the business where they work is not going to be required for most solicitors.

Change of mindset

The mindset towards business skills development needs to change. Leaders and managers of the business may be solicitors, but the driver for their appointment to those roles should be them having the skills set required, rather than them being fantastic fee earners.

Each business needs to ensure that its leaders and managers are given sufficient capacity to carry out their roles – they are not just add-ons to existing fee-earning responsibilities. Leaders and managers also need to have functional training and support to ensure that they have the most up-to-date strategic business and management skills. This will, in turn, ensure that the business has financial stability and growth.

Jackie Panter is associate head of law at Manchester Law School (www.law.mmu.ac.uk)