Practice Management

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Practice Management: What Is It and Why Do You Need It?

By Kristin Rhodes posted 12-17-2021 16:55


Please enjoy this blog post co-authored by Kristin Rhodes, Senior Practice Manager, Paul Hastings LLP and Mike Ertel, KM Attorney, Paul Hastings LLP.


Practice management in law firms is not new. While some firms have had practice management programs for decades, many still do not. The definition and implementation of the program varies widely across firms, and even across practice groups within the same firm. This is the first in a series of blog posts designed to provide an overview practice management to help you consider whether your firm should implement or bolster its practice management efforts.

What is Practice Management?

Practice management ties the practice of law to the business of running of a law firm by helping practice leadership execute their strategy, maintain internal operations and priorities, and connect to firm-wide programs and initiatives, including other professional support groups like HR, finance, IT, knowledge management, etc. Conceptually, an embedded practice manager in a practice group acts like a chief of staff or a director of practice operations for the group.

A practice manager may run everything from strategy to internal operations to meet the business goals and objectives of the firm. For the purposes of this post, we are focused on three primary goals:

  • practice productivity, profitability, and accountability;
  • group cohesion and morale; and
  • timekeeper integration and development.

These goals should be considered within the framework of a practice-centric organization.

Practice-Centric Organization

As opposed to an office-centric model that organizes groups by physical office, the practice-centric model recognizes that relevant resources are not limited to physical proximity. With firms expanding their physical footprint and the pandemic forcing increased collaboration using technology, some firms have been moving toward the practice-centric model. Organizing groups by practice allows them to leverage their common resources by skills and knowledge—as opposed to limiting resource alignment based upon physical location.

One example is headcount. When people are managed by practice leaders and the practice manager, decisions on hiring are based on an assessment of future pipeline of work, current skill set distribution, and target practice group productivity (not office). Decisions about retention and managing people are based on those same needs, considered alongside with the individual’s development goals and performance record.

One of the benefits of practice-centric organization is that many business decisions are made and held accountable on the practice-level. These decisions fall within the aforementioned goals which will be discussed next.

Goals of Practice Management

Practice Productivity, Profitability, and Accountability

When firms are organized by practice, those practices serve as smaller business units within the larger business of the firm. This model leads to a successful firm if those smaller units are held accountable using reporting metrics. For many, this includes productivity, i.e., the assessment of hours worked by all timekeepers. Increasingly, firms also hold the practices accountable on profitability. The particulars may vary, but essentially require a valuation of the group’s incoming revenue in comparison to the cost and/or price potential of the work.

Under this model, practice groups are assessed using a standard reporting methodology. This shared understanding of productivity and (potentially) profitability targets allows practice leadership to make business decisions.

To use the previous headcount example, practice leaders know they should be weary of hiring more attorneys when overall productivity is low. A practice manager helps analyze and contextualize this data point: is the entire practice slow or just certain pockets? Can slower areas fill in the gaps of busier areas? What skills are required? Are the lower productivity pockets due to short term dips or longer terms drops in client work? Are there performance issues with select individuals?

After determining true practice need for more attorneys, the practice can go to leadership with an informed request for a new hire. In turn, effectively managing to the standard reporting metrics over time gives the practice leadership credibility when asking for additional headcount or budget. A practice manager is constantly focused on the bottom line and how the daily business of the group traces back to this number.

Group Cohesion and Morale

A successfully-run practice not only considers the outputs—the hours worked and profitability—but also the inputs—the people. Central to these goals are themes like communication, retention, and employee happiness. Happier people lead to better performing and more efficient teams.

A practice manager can facilitate these ends though information sharing and teambuilding. For example, running regular practice meetings where key client and industry updates are shared, business development initiatives are discussed, and general face time is encouraged can all go a long way in keeping people happy and tethered to the group’s goals and outputs.

Practice managers often create a practice newsletters that share business updates like the revenue brought in by the practice, new matters, or personal updates, like features on their coworker’s kids and pets, to make everyone feel connected and informed.

Perhaps most importantly, practice managers must be attuned to the needs of the individual practice members. They should spend time listening, acting as a sounding board, and consolidating feedback into larger group initiatives. For example, if they hear that attorneys feel like work isn’t being transparently distributed, they would report back to the practice leadership with the feedback and ideas for improvement (such as creating an assignment board or better reporting for staffing decisions).

Timekeeper Integration and Development

Getting even more granular, ensuring the attorneys and other timekeepers in a practice are individually well-cared for leads to the most effective teams, which in turn leads to the most productive and profitable practices. This means getting to know people on an individual basis and understanding each their development needs in relation to what the practice expects from them.

New hires are also important and the practice must be focused on them from day one; the timekeeper’s time is a valuable asset that should not be wasted. A practice manager ensures that the new timekeeper is on all the relevant distribution lists, invited to pertinent meetings, has access to the right subscriptions and resources, and knows who to go to for work and mentorship. They might also provide the new hire with a practice-specific orientation, explaining the intricacies of the practice, its subspecialty areas, who practices in what area, the client base, etc. The new hire should also have an understanding of where to go for the practice’s key reference material and templates.

The practice manager should continue to stay aware of the timekeeper’s needs. Are they getting the right opportunities for their development? Are those development goals consistent with the practice’s needs? What trainings or skills improvements may apply? Do they have an effective mentor? The practice manager doesn’t need to know how to provide the training or mentorship, but they need to understand how to connect the attorney to the firm’s people and resources.

Up Next

The next blog post will explore the nuances of practice management and how it adds value to firms.



1 comment



01-28-2022 10:35

Please enjoy the second part of this series:

Practice Management: What are the Practical Benefits?