law offices mba

law offices mba

The Impact of MBA Education on Law Offices

1. Introduction to the Intersection of Law and Business

Generally, issues relating to formation or maintenance of business entities and the intricacies of operational mergers and acquisitions have been—until now—matters for other attorneys. Nonetheless, given the large majority of sophisticated business clients who may be in full-time owner management roles or who act as fiduciaries of well-capitalized or institutional resources, every business attorney should, for their client’s sake, be conversant with the preparation of MBA (Master’s in Business Administration) or other tactical business strategies.

For over twenty years, I have been a quiet advocate of concurrent preparation for business and law. As a self-employed, generalist attorney who practices primarily in the area of wills, trusts, probate, and real estate, my thoughts have, not surprisingly, focused on things like estate planning, trust and company administration, structured or planned charitable giving, tax issues, real estate development, risk management, and the dispute resolution mechanism in construction agreements.

2. Benefits of MBA Education for Law Professionals

Businesses expect to get more from their hired business lawyer. So, MBA-anchored lawyers who are better in effective engagement, exert enhanced leadership, develop stronger business strategies, develop better plans for executing business strategies, and succeed in integrating better, are better able to fulfill such expectations. This is particularly important considering the modern concept of business model. While the basic reputation of all legal counselors is absolutely required to value cases, the added value of any MBA supporter comes from the additional valuation that he can bring to his own experience.

The greatest advantage for legal professionals who get MBA training is the ability to see concrete connections not only between traditional legal problems and general business issues, but also between different business sectors and contributing industries. Such specialists are able to think in different landmarks and to get a more holistic view. MBA-educated professionals are able to value the more subtle client issues; to create a more insightful and effective dispute resolution plan; and to develop a more global, case assessment and strategy.

In addition, MBA education offers certain advantages to law firms too. A number of additional services can be easily incorporated into a law firm such as mediation, project management, and others. Customers are likely to benefit from these additional services. Besides, the added combination of lawyer and business professional can deliver high-quality diagnostics, analytics, and planning for each client’s business.

There are certain benefits for lawyers to obtain an MBA education. It is becoming more common for law professionals to complete a Master of Business Administration (MBA) in addition to a law degree. This offers individuals unique opportunities for career development within a highly dynamic field. Such professionals can pursue a number of high-level jobs such as law firm administrator, legal advisor, law associate, or corporate executive. Mostly, the professionalism of a lawyer is combined with the competences obtained during the business education. This opens numerous new career paths for law graduates.

3. Challenges and Criticisms of MBA Integration in Law Offices

The charge is that, to justify their salaries, the MBA managers’ objective is to alter attorney behavior in negative ways: flattening the compensation structure, introducing formal management controls, and pushing political values and objectives. Critics stress that if law professionals adhere mantra-like to a few key principles that were valid throughout the 20th century, they would be able to withstand tremendous competitive pressure. The problem is that economic structuring principles and general business best practices are simply not as valid in the law firm environment as they are in other for-profit businesses.

The idea of integrating MBA graduates as managers into law firms is a new one, and it is not without its critics. It may be an appropriate time to consider such criticisms before too much progress is made in changing the nature of an established and usually successful business model. One of the longest-standing criticisms of this concept is that it applies a business solution in a professional environment. While law firms must generate profits to continue as viable business entities, critics emphasize that “constantly reminding professionals about the profit motive can lead to negative consequences.” They believe that MBA-qualified managers undermine morale and disrupt the unique culture of law firms.

4. Best Practices and Strategies for Implementing MBA Principles in Legal Practice

Operational level authority is essential in any initiative. However, management must clarify the limits of that authority. Any staff member who doesn’t understand the full scope of what he or she does, or of what is expected of them, will be disengaged and their full potential will never be realized. Everyone involved in the process must be on the same page and understand that management will support their authority. One of the critical elements of any successful law office is the people. The human resources—good people—are always in the office’s best interest. There should be an institutional commitment to assist skill development and provide career advancement opportunities for all employees. The firm should encourage and support mentoring programs between experienced professionals and young professionals. Everyone should participate in the process of encouraging and rewarding talent, whether it comes from administrative staff, attorneys, or capable paralegals. Staff wages should reward good work and incentives should be provided to those employees who wish to emulate the elite processes of the company. The firm should also implement a clear expectation about accomplishment with the compensation package while examining the wide range of factors that balance and support the questioning process.

To implement MBA principles in law offices, several strategies may prove effective. Shared governance, defined as the process of facilitating communication, participation, and decision-making among diverse groups who otherwise would not interact for the purpose of accomplishing a specific institutional or organizational task, will benefit law firms. Law offices should work to flatten their organizational structure—eliminate all unnecessary tiers of management and make everyone involved in the process feel more valued. With the fast pace of change a given in today’s world, law firm managers need both enhanced leadership skills and teambuilding ability. Leadership skills are important at all levels of the practice because no one person can be responsible for all firm decisions.

5. Future Trends and Opportunities for MBA-educated Legal Professionals

They also allow enhanced fee structures that represent real value added instead of the more traditional leverage of last century’s hourly billing rates. Furthermore, even the most conservative of lawyers now equate professional risk with financial risk. Thus, the personal fortunes of individual lawyers and law firms are, or should be, represented by their company’s stock performance. Hence, any MBA education of company decision-makers, including legal professionals, helps reduce the risk of making financially incorrect decisions. This progression also occurs in a context of diminishing distinctions between firm and corporate practices and clients which cause both to treat the firm no differently in the economic aspects of its business than they do nonfirm businesses.

More than just simple accountants, a law firm’s business managers have the potential to become strategic decision-makers. Tomorrow’s law offices will be influenced not only by traditional factors but also by much late-20th-century fare such as globalization, modularization, integrated service products, nonprofessionals, global competitiveness, and the information revolution. Like the rest of us, business professionals in the law office find fewer “absolutes” and more sophisticated tools in their decision-making, tools that are beginning at long last to be taught in MBA programs. These tools, premised on the concept of continuous learning and endless updating of professional and financial skills, maximize our ability to respond to clients by effectively partitioning and coordinating these resources.