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We spent a weekend with the US Law Firm Group, a collection of law firm leaders from around the country. Besides being one of the most welcoming and friendly groups of lawyers I’ve encountered, they were also among the most progressive and open-minded.

During Friday’s dinner, the Managing Partner of one of the largest firms in the country asked my co-founder what he thought of law firm Chief Marketing Officers reporting to law firm COOs (or dually reporting to the Managing Partner and Chief Operating Officer. Craig replied that he had experienced both extremes as a CMO. He was subject to that dual reporting structure at one BigLaw firm, whereas he reported solely to the CEO at another, and was a member of the company’s ten-member Executive Committee.

Optimally, in Craig's view, the CMO would report only to the Managing Partner and would be as integral a member of Executive Committee meetings as is the COO. He brought up an oft-repeated argument that the four P’s of Marketing (Product, Pricing, Promotion, Place [Distribution]) are often integral to Executive Committee meetings and shouldn’t be discussed without your top marketing or business development executive, but he also offered a new perspective.

While his second firm had no COO, its CFO handled many of the same duties as a law firm COO. He joked that although they were friends, they were “mortal enemies” when it came to Executive Committee meetings. Where Craig wanted to invest, she wanted to save. Where he wanted to spend, she wanted to cut. There existed a natural tension, but it was one that benefited the firm in the long run. It forced her to justify more of her proposed cuts, and forced Craig to defend his proposed expenditures and to demonstrate ROI. The existence of a natural counter-balance made them both sharper. That tension also provided clarity to the CEO, which helped inform his decisions.

Then again, none of this is possible without the right circumstances. He was a CMO whose charter and focus was client development and profitability. A CMO focused primarily on branding and advertising probably should report to the COO, as he or she is not focused on the real problem, which is revenue generation (see, below). The CMO would also need to have a voice equal to that of the COO. Each would need the full backing of the Managing Partner to speak to Executive Committee members frankly and directly, with no fear of rebuke.

In the rare firm with a strong CMO who is a peer of the COO, you generally have a person with a different mindset and perspective than that of both the COO and the partners – a mindset that is becoming more and more valuable. Now that law firm expenses are cut to the bone, and they’re all looking for ways to avoid reducing partner compensation, almost all of the opportunities (and threats) revolve around revenue generation.

The real problem is that the existing revenue generation model is inherently flawed. Law firm “sales forces” are far too small, and the mobility of those sellers (the “Rainmakers”) renders the majority of laws firms extremely vulnerable to rainmaker defection. The fates of these firms will rest on the ability to adopt a new model — one where they generate revenue via contributions from a much larger percentage of their lawyers than they do today.

Given that reality, it only makes sense that the person spending every day thinking about revenue-generating strategies should not only report solely to the Managing Partner, but should also be a fixture at Executive Committee meetings.

Mike O'Horo

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